A family feud triggered the review that ended a revenue officer's career
An Internal Revenue Service (IRS) supervisor lost her job over her own tax problems - and a federal appeals court just upheld the firing.
On August 20, 2026, the US Court of Appeals for the Federal Circuit affirmed the removal of a Supervisory Revenue Officer at the Internal Revenue Service, closing an appeal that traced back to her 2021 firing.
The trouble started with a family fallout. The employee had served as trustee for her goddaughter's trust since 2011. By early 2015, that relationship had broken down, and the goddaughter reported her to the IRS for preparing other people's tax returns for pay - conduct the court called "undisputedly prohibited" for agency staff.
The employee flagged the threat to her manager, who told her to get ahead of it and contact the Treasury Inspector General for Tax Administration. That disclosure triggered an investigation, which turned up more than the original complaint.
Investigators found she had improperly claimed her goddaughter and her goddaughter's son as dependents across several tax years, and had placed both on her federal employee health insurance plan. She acknowledged to investigators that "she knew that her actions were technically illegal," according to the decision. An IRS audit found she owed back taxes, interest, and penalties, plus a separate sum the agency tied to "the health insurance fraud."
She challenged the tax bill in US Tax Court and settled in 2020 for roughly half of what the IRS first assessed. Two travel-card incidents - a disputed hotel charge and two bounced payments - added prior discipline to her file.
In March 2021, the IRS proposed removing her, citing understated tax liability, unpaid taxes she owed, and improper dependent claims on her health insurance. The agency said the misconduct showed "a severe lack of integrity," a quality it called essential to her position and to keeping taxpayers' trust. She was removed that August.
Her appeal split the Merit Systems Protection Board. An administrative judge first reversed the firing. The full Board then reversed that ruling and sustained the removal, faulting the judge for discounting her Tax Court records.
On appeal, the former supervisor, who had represented herself before the Board, argued it wrongly leaned on her tax settlement, which she said federal evidence rules bar as proof of liability. The court disagreed, holding the Board used the records only to establish the amount she owed - an underlying fact, not a fresh finding of wrongdoing.
The court affirmed. Each side pays its own costs.
