IRS Defies Obama Directive, Awards $70M in Bonuses
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Kedar Pavgi
Government Executive
June 19, 2013

Internal Revenue Service employees are set to receive $70 million in bonuses, despite a White House directive to cancel the awards while sequestration is in place, the Associated Press reported.

News about the bonuses came from the office of Sen. Chuck Grassley, R-Iowa, according to AP. The agency is following through with an agreement with unions to pay millions in bonuses, Grassley said, even as the agency clamors for budget relief.

"The IRS always claims to be short on resources," Grassley told AP. "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."

An Office of Management and Budget memo from April—signed by former OMB Controller, and current acting IRS commissioner Danny Werfel—directed agencies to hold off on bonuses during sequestration “unless agency counsel determines the awards are legally required.” Federal employee groups were unhappy with the directive, saying that it interfered with the performance-based pay system necessary to retain senior executives.

Union representatives declined comment, according to AP.

An IRS spokeswoman told AP that the agency was complying with OMB directives, but was “under a legal obligation to comply with its collective bargaining agreement, which specifies the terms by which awards are paid to bargaining-unit employees."

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