published Wednesday, June 19th, 2013

Senator says IRS to pay $70 million in employee bonuses

By STEPHEN OHLEMACHER

Associated Press

WASHINGTON — The Internal Revenue Service is about to pay $70 million in employee bonuses despite an Obama administration directive to cancel discretionary bonuses because of automatic spending cuts enacted this year, according to a GOP senator.

Sen. Chuck Grassley of Iowa says his office has learned that the IRS is executing an agreement with the employees’ union today to pay the bonuses. Grassley says the bonuses should be canceled under an April directive from the White House budget office.

The directive was written by Danny Werfel, a former budget official who has since been appointed acting IRS commissioner.

“The IRS always claims to be short on resources,” Grassley said. “But it appears to have $70 million for union bonuses. And it appears to be making an extra effort to give the bonuses despite opportunities to renegotiate with the union and federal instruction to cease discretionary bonuses during sequestration.”

The IRS said it is negotiating with the union over the matter but did not dispute Grassley’s claim that the bonuses are imminent.

Office of Management and Budget “guidance directs that agencies should not pay discretionary monetary awards at this time, unless legally required,” IRS spokeswoman Michelle Eldridge said in a statement. “IRS is under a legal obligation to comply with its collective bargaining agreement, which specifies the terms by which awards are paid to bargaining-unit employees.”

Eldridge, however, would not say whether the IRS believes it is contractually obligated to pay the bonuses.

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