Background Reinvestigations for Employees with Access to Federal Tax Information
On September 29, 2026, UPE met with Sacramento County over the creation of a new policy relating to background checks for employees with access to Federal Tax Information (FTI). IRS rules require that all employees with direct or indirect access to protected FTI must undergo a background check every five years to identify any arrests or convictions that may impact an employee's 'suitability' for access to FTI. This requirement applies to all classifications, including supervisors and managers if they have access to FTI.
The IRS requires these background checks to include local and Department of Justice fingerprinting, a background review with local law enforcement of any place the employee lived, worked, and/or attended school within the last five years, and a check of the employee's eligibility to work within the United States legally. Not all arrests or convictions would be flagged during such a background check. The focus would be on arrests or convictions for crimes such as fraud, theft, and misuse of authority. The County would not flag or consider things like DUIs or crimes not directly related to the employees' work with FTI as potentially disqualifying. If something is identified, the County would notify the Department, which would conduct an individualized assessment of the employee to determine whether whatever was flagged on the background check could impact the ability of the employee to maintain access to FTI. Employees would be involved in this process and have a chance to clarify and explain any adverse findings.
Under IRS rules, if an adverse finding is found and cannot be satisfactorily explained, the Department would have to change the employee's duties or, if necessary, transfer the employee to a different classification. If that was not possible, then the employee could face a non-punitive termination of employment.
Both DHA and DCSS already have background check policies in place, and those policies will not be superseded by this new policy. This policy will apply to any other Department where employees have access to FTI. Right now, the County has only identified the Department of Revenue and Recovery. UPE will meet again with the County and DRR once they have worked out all the policies, procedures, and timelines for implementing background reinvestigations in that Department. The parties have agreed to meet prior to any implementation.
UPE thanks Deanna Green, Jim Ostrowski, Sylvia Gracia, Debbie Tellez, and Jennifer Avalo for their participation and advocacy.
