The Internal Revenue Service has canceled one of its five furlough days planned for this year under the automatic spending cuts known as the sequester.

Acting IRS Commissioner Daniel Werfel told employees in a memo that the agency had would no longer force employees to take unpaid leave on July 22.

(J. Scott Applewhite/AP) - Acting IRS Commissioner Daniel Werfel. Acting IRS Commissioner Daniel Werfel. (J. Scott Applewhite/AP)

The IRS is one of two agencies — the other being Housing and Urban Development — that is furloughing all employees on specific dates. Most agencies have staggered the dates among workers to avoid shutting down entirely on weekdays.

Werfel said employees would be allowed to use unscheduled leave on the canceled furlough date because his announcement provided short notice. “I am emphasizing to all managers that if their employees want to take leave on July 22, they should be allowed to do so,” he said.

Last week, Werfel told employees that the IRS could reduce its furlough days by forgoing an estimated $70 million in bonuses for the agency’s workers. He said he had directed senior staff to come up with options for eliminating the performance awards despite collective bargaining agreements that guarantee them under certain conditions.

The National Treasury Employees Union, which represents IRS and other federal employees, pushed back against Werfel’s plan last week. NTEU president Colleen M. Kelley said in a statement that the agency should adjust its budget and operations before eliminating incentive awards for “high-performing frontline employees.”

The labor group said in a statement on Tuesday that it will “remain in talks about the payment of awards earned by employees for performance in 2012.”

The next IRS furlough day — also the last for this year — is scheduled for Aug. 30, giving employees a four-day weekend. The agency planned all but one its days of sequester-related unpaid leave around federal holidays.

The NTEU applauded the IRS’s decision to cancel the July 22 cancellation and said it will press the agency to eliminate its last furlough day.

“Whether you have an estate issue, want to know about filing an amended return, are dealing with the growing crime of identity theft or have any of a number of tax-related questions or issues, the IRS needs to be open for America’s taxpayers,” Kelley said.

Below is Werfel’s announcement canceling the July 22 furlough day:

On July 9, I promised to give you updates on the furloughs. Today, I want to share with you some important news. As we continue to take numerous and varied actions to address our budget situation, we have determined we are able to cancel the scheduled furlough day for next Monday, July 22.

The IRS will be open for taxpayers that day as scheduled, and all employees will be paid for that day. This step follows a lot of hard work across the Service to cut costs. I realize that this announcement comes on very short notice. Therefore, unscheduled leave will be permitted that day, and I am emphasizing to all managers that if their employees want to take leave on July 22, they should be allowed to do so. More information will be available on IRWeb.

I also wanted to share with you that my trip last week to the Atlanta campus and offices reinforced what I’m seeing across the Service and my ongoing concern about the impact that the sequester and other budget cuts would have on our people and operations. I was incredibly impressed with the talent and dedication of the IRS workforce during my visit. I was able to see in real time how the IRS is working to serve individuals, families, small businesses and others to help them meet their tax obligations. This important work, along with similar work being done by the IRS workforce across the country, must be sustained for the IRS to effectively serve taxpayers.

I appreciate your continued hard work as we finalize our 2013 budget planning, and I will keep you informed as we determine the status of the August 30 furlough day.

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