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November 4th, 2014 | Sterling

Sticking To A Screening Policy Appears To Be Taxing For The IRS

Sticking To A Screening Policy Appears To Be Taxing For The IRS | SterlingBackcheck

No one enjoys being the subject of an IRS investigation, but this time it’s the IRS that’s being put under the microscope for not following their own background screening policy. Their policy requires screening for any employees or contractors who have access to sensitive information – including confidential taxpayer details. An investigation revealed that the IRS failed to conduct checks on several contractors who fell into this category. The IRS’ background screening policy is in place to prevent identity theft and fraud – a crime that is becoming more and more prevalent in the United States.

One contractor was hired for printing work and was provided with a computer disk containing the confidential information of 1.4 million taxpayers. That sensitive information included full names, addresses, and Social Security Numbers. Background checks were never conducted on the individuals who were responsible for or handled the information.

In another example, the IRS used a courier to transport sensitive documents. The problem is that this particular courier did not undergo a background check and actually had convictions for arson and other charges for which he served 21 years in prison.

So far there are no cases of identity theft linked to the IRS contractors and the lack of background checks, but unfortunately this isn’t a case of one or two contractors slipping through the cracks. Of the 34 active contracts that were reviewed by investigators, 5 of them did not require background checks despite their handling of confidential information.

But before everyone jumps on the taxman-bashing bandwagon, situations like this actually occur in many organizations. It’s not uncommon for companies and organizations to violate their own background screening policies. Sometimes it’s an honest mistake, such as a new employee in the procurement department forgetting to note in a contract that background checks are required. Other times it may be intentional, such as a manager attempting to hire a friend or family member with a past criminal conviction and skipping the background check so the problematic past goes undetected. In any case, it’s important for businesses to create thorough policies that clearly identify how background checks should be carried out.

Here are a few dimensions and questions that your background checking policy should consider:

  • At which stage in the hiring process background checks should be conducted?
  • How often do background checks need to be renewed?
  • Which types of checks are required for each position (i.e. credit is only applicable for certain positions)?
  • What are the criteria and guidelines for adjudicating results?

You can find additional information about background screening policies by visiting SterlingBackcheck’s compliance resource on establishing and following a background screening policy.

If possible, measures to ensure compliance should be written into the policy. For example, you might require a second person to review the background check results for all new hires or contractors. Or you might require the implementation of an Applicant Tracking System (ATS) or Human Resource Information System (HRIS) to track results for future or ongoing internal auditing purposes.

Once the policy is in place, there needs to be a process for regular review to ensure compliance with legislative updates and industry best practices. The important thing for business owners and managers to remember is that the policy is the backbone of your screening program. At the end of the day, your background policy needs to be up-to-date, relevant, and most importantly – followed by all members of the organization.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.