Liability Insurance for Federal Employees and Contractors

FEDS Protection for IRS Managers

"I spent a wonderful 27 years with the IRS but never could have imagined the shocking and unexpected situation I experienced toward the end of my career. But I was lucky, I had [FEDS Protection].

I could never have afforded to hire Debra Roth who provided legal representation for me under my policy. I just want to say I don’t think I could have received better representation from any attorneys in the world. After 27 years in the IRS, my world was turned upside down, and my attorneys got it turned right side up again. I couldn’t have done it without them.

It doesn’t matter how well you are liked or how well you do your job, you need to protect yourself. I can’t thank Debra and [FEDS] enough. ” ~ Lynda Wadler, IRS

"Allow me to spend a moment of your time discussing my personal case. If you remember the public spectacle that Congress put on regarding IRS abuse back in 2000, you may remember that several Collection Senior Managers were charged and/or investigated for actions that resulted in alleged Taxpayer Abuse. (Headline News for the Wall Street Journal). After the millions spent in reviewing cases, interviewing taxpayers and employees hidden behind screens, the overall finding was 3 horrible cases where taxpayers accounts were lost in an extremely antiquated set of computer "systems". Although NO abuse or unprofessional behavior was found, (Wall Street Journal, a year or so later, somewhere around page 18), this politically-staged circus ended with procedural changes, and some drastically-needed funding toward improvement of the computer systems. It also created and reinforced protections for taxpayer rights and funded several additional watchdog organizations.

That said, not many people wondered or cared what happened to those Collection managers who were under "investigation". Those dedicated individuals who were negatively impacted by all that went on. (Collateral Damage) After over 30 years with the IRS, 25 of which were in the Collection function, and one of the 13 under investigation, I can truly say the difference in treatment I received as a Senior Manager was "politically" driven. (I guess it was deemed in the "interest of the United States" to be investigated by DOJ). By the time my case was before the Grand Jury, most of my peers had been cleared. There were no cases including my own, of Senior Managers demanding their employees suck the life and last dollar from their taxpayers. It no longer mattered whether I was considered to be taking actions "well within my job duties", but appeared they were looking to provide congress with their token wrongdoer or maybe just for something else. I was never informed of what I was being investigated for or accused of.

Professional Liability Insurance, I did not have it. I thought, as did many of the managers I worked with, that the IRS would cover me as long as I acted within the scope of my employment and direction from my leaders. Thank goodness I did belong to the Professional Managers Association, as they provided me with free initial counseling, and names of attorneys to consider. The agency who directed me in my actions took 10 steps back and basically left me hanging out there on my own…. I was "black listed" and removed from several programs I was involved with, removed from the best qualified list for an Executive Development program, and it cost me thousands of out of pocket dollars to secure representation that I thought I could afford. I was under investigation for 2 ½ years. [Although an outside governmental contractor that wrote an article dismissing the need for PLI and claimed to have "never" known where an employee was denied an attorney during an IG interview, I was denied the right to have an attorney present during my Treasury Inspector General for Tax Administration (TIGTA) interview, and as a result I refused to sign the waiver of my rights.] I was then given the Miranda warning and ultimately my case went to the Grand Jury. Later the Grand Jury, after interviewing all my direct reports, and a slew of documents (some more than once) dropped the case. It should be noted that the IRS would not give me permission to share those same documents with my attorney. I had to purchase a photocopy machine, and copy and redact all the documentation, on my own time. It took the IRS five months after the closing of the case by the Grand Jury to provide me with a closed without action letter. Note: this was not a Clearance Letter. The IRS attorney who was representing the "Government's interest" said the Service would only provide "clearance" if that was what the Grand Jury determined.

So after this long story, what would have been the difference had I had Professional Liability Insurance? I believe many things would have been different. Those of my peers whose cases closed early had PLI and early attention by Legal Counsel. I learned that having an attorney to advise you of your legal rights and your obligations in the investigative process, the powers of the investigator, whether the investigation could result in criminal charges, and the parameters of the law under which you've been accused are critical to the expediency of the case. As I mentioned I still do not know what I was actually accused of. [Contrary to the outside governmental contractor author who penned the article dismissing the need for PLI], I am also aware of several [other] frontline managers and senior managers who were dead certain they'd done nothing wrong and relied on the agency to support them. Many of them ultimately lost everything - their jobs, and homes (leveraged to pay for their attorneys). One group manager came to me for advice because he was turned into TIGTA for not authorizing an employee to take enforcement action against an "alleged friend". TIGTA "shopped" DOJ attorneys until they found one out of state who would take the case. My first question was DO You Have Professional Liability Insurance? He did not. And by the way, after losing all, his case was later thrown out by the Judge.

Had I had PLI, I would have had counsel earlier in the game and been able to afford an attorney who specialized in these types of cases. And lastly although I survived the ordeal, and eventually paid off my debts with regard to attorney costs, the stress of the process produced ulcers and unnecessary strain on my marriage. Not to say the least of lost credibility on the job. So, now I have become the poster child for PLI and have more than my own story to tell about its need. And not just for Collection managers, but anyone who Manages in a Federal Organization.

I have survived and am a few years from retirement, but the true downside is that I have lost my respect for most of the leadership in the organization and the love and pride in working for the IRS. Even though I feel I have continued to be fully engaged and supported my managers and programs, I have come to consider this a job and not a career. That motivation and confidence was lost." ~ Catherine Lunderville, IRS Manager


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