Acting IRS chief looks to cancel staff bonuses

The acting IRS chief told agency employees on Tuesday that bonuses for managers would be canceled this year, and that he was working to do the same for union staffers.

The acting IRS chief told agency employees on Tuesday that bonuses for managers would be canceled this year, and that he was working to do the same for union staffers.

Danny Werfel, who took over the reins at the IRS in May, told staffers across-the-board spending cuts had required bonuses be suspended elsewhere in the federal bureaucracy, and agency employees serving under union contracts shouldn’t be treated any differently. Werfel is seeking to stop bonuses for senior executives as well.

But while the tax-collecting agency remains under fire for its targeting of conservative groups, Werfel did not mention the current controversy and said scrapping the bonuses was not a comment on the work staffers were doing.

“This is not a reflection of the quality or performance of the work done by you and your colleagues, but rather an unfortunate byproduct of the difficult budgetary situation we find ourselves in,” Werfel wrote in his message to employees.

Congressional Republicans had sharply criticized Werfel and the IRS last month for getting ready to hand out some $70 million in bonuses.

The National Treasury Employees Union (NTEU) has said the IRS is legally bound to pay out those awards. Colleen Kelley, the union’s president, reiterated that stance on Tuesday, saying the agency should cut elsewhere before getting rid of bonuses and noting that the awards being discussed are for work starting in 2012.

A spokesman for the agency said last month it was actively negotiating with the union, but was also bound by its collective bargaining agreement. Werfel’s Tuesday message also stressed the IRS would work with NTEU on the bonuses.

Werfel did say in both a statement and his email to employees that the agency would likely be able to cancel two remaining furlough days – July 22 and Aug. 30 – put into place to deal with sequestration.

Agency employees have already missed work for three furlough days, and Werfel said restoring two more workdays would ease the sting of the lost bonuses. “Even more importantly, it would mean the IRS would remain open on those days to serve taxpayers and meet the needs of the nation’s tax system,” he said.

GOP tax writers in both chambers struck a cautious tone in discussing the potential trade of $70 million in bonuses for two work days.

“While efforts to block the bonuses are welcome news, actions speak louder than words,” Sen. Orrin Hatch (Utah), the top Republican at the Finance Committee, said in a statement. “In my view, the IRS should not be paying out bonuses especially now when it’s under multiple congressional investigations for targeting conservative groups.”

Rep. Charles Boustany (R-La.), a senior member of the Ways and Means Committee, called the move a positive step. But, he added, “to see that significant amount of bonus money went to people who are now gone, in the light of all of what we know now, it’s a real slap in the face of the American taxpayer.”

Werfel’s message came the same day that House Republicans made clear they intend to take aim at the IRS, releasing a spending bill that cuts the agency’s funding by roughly a quarter.

Majority Leader Eric Cantor (R-Va.) is also planning a series of votes to push back at the agency, including a measure that would allow staffers under investigation to be put on leave without pay and another that would boost the approval standard for conferences.

This post was updated at 7:40 p.m.