The Washington Post

IRS reinstates employee bonuses, ending sequester-related hold on awards


The Internal Revenue Service has reinstated its employee bonuses for fiscal 2013, avoiding litigation with an employees’ union but drawing criticism from at least one prominent Republican lawmaker.

The payouts are expected to reach $62.5 million, compared to $89.1 million for fiscal 2012, according to the agency.

The IRS put a hold on its financial awards in July because of the government-wide budget cuts known as the sequester, saying the move would help avoid two additional days of furloughs. Agency spokeswoman Michelle Eldridge said the decision proved to be unpopular, adding that it “significantly affected employee morale.”

The deal, announced Monday, limits IRS payouts to 1 percent of salaries instead of the 1.75 percent allowed under the agency’s collective-bargaining agreement. The National Treasury Employees Union, which represents most of the affected employees, said it reluctantly agreed to the reduction to prevent a protracted fight.

“Payment of these earned awards to employees is an important step in recognizing their valuable contributions to the IRS and the nation,” said NTEU president Colleen M. Kelley. “The awards are a relatively small amount of money, but they go a long way toward acknowledging the hard work of employees who exceed their performance expectations for the year.”

IRS Commissioner John Koskinen. (AP Photo/J. Scott Applewhite) IRS Commissioner John Koskinen. (AP Photo/J. Scott Applewhite)

IRS Commissioner John Koskinen, whom the Senate confirmed in December, said in an announcement to employees on Monday that neither side received everything they wanted in the agreement, adding that it represents “an appropriate compromise in the circumstances in which we find ourselves.”

Sen. Orrin Hatch (R-Utah), ranking member of the Senate Finance Committee, criticized the deal on Monday, questioning why the IRS would reinstate performance awards for an agency that last year acknowledged inappropriate behavior toward advocacy groups seeking tax-exempt status.

“It’s hard to think of a group of people less deserving of bonuses than IRS employees,” Hatch said in a statement. “Frankly, this is outrageous. I understand that not every IRS worker was responsible, but this just is the wrong signal to send the American people who were rightly outraged by how this agency treated people for their political views.”

An inspector general’s audit released last year found that the IRS had targeted certain advocacy groups for additional scrutiny based on their policy positions and names. The actions largely affected conservative and tea party groups, the report said.

Koskinen answered critics of the bonus agreement in his statement on Monday, saying the decision became clear to him after visiting with employees during his first weeks on the job. “This is money best spent on our existing employees,” he said. “I firmly believe that this investment in our employees will directly benefit taxpayers and the tax system.”

The deal came as agencies are finalizing their new budgets under the $1.1 trillion appropriations bill Congress and President Obama approved last month. The legislation provides some departments with limited relief from the sequester.

At least one other agency, the Labor Department, announced on Monday that it would reinstate performance awards for fiscal 2013. Labor Secretary Thomas Perez sent a message to employees saying the agency would maximize the awards “within the current restraints.”

“While we all must continue to be careful stewards of the taxpayer’s funds, we are in a much better place financially as a department than we were a year ago,” Perez said.

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks@washpost.comVisit The Federal Eye, The Fed Page and Post Politics for more federal news. E-mail with news tips and other suggestions.

Josh Hicks covers Maryland politics and government. He previously anchored the Post’s Federal Eye blog, focusing on federal accountability and workforce issues.

The Freddie Gray case

Please provide a valid email address.

You’re all set!

Campaign 2016 Email Updates

Please provide a valid email address.

You’re all set!

Get Zika news by email

Please provide a valid email address.

You’re all set!
Show Comments
Republicans debated Saturday night. The South Carolina GOP primary and the Nevada Democratic caucuses are next on Feb. 20. Get caught up on the race.
The Post's Dan Balz says...
Rarely has the division between Trump and party elites been more apparent. Trump trashed one of the most revered families in Republican politics and made a bet that standing his ground is better than backing down. Drawing boos from the audience, Trump did not flinch. But whether he will be punished or rewarded by voters was the unanswerable question.
GOP candidates react to Justice Scalia's death
I don't know how he knows what I said on Univision because he doesn't speak Spanish.
Sen. Marco Rubio, attacking Sen. Ted Cruz in Saturday night's very heated GOP debate in South Carolina. Soon after, Cruz went on a tirade in Spanish.
The Fix asks The State's political reporter where the most important region of the state is.
The State's Andy Shain says he could talk about Charleston, which represents a little bit of everything the state has to offer from evangelicals to libertarians, and where Ted Cruz is raising more money than anywhere else. In a twist, Marco Rubio is drawing strong financial support from more socially conservative Upstate. That said, Donald Trump is bursting all the conventional wisdom in the state. So maybe the better answer to this question is, "Wherever Trump is."
Past South Carolina GOP primary winners
South Carolina polling averages
Donald Trump leads in the first state in the South to vote, where he faces rivals Ted Cruz and Marco Rubio.
South Carolina polling averages
The S.C. Democratic primary is Feb. 27. Clinton has a significant lead in the state, whose primary falls one week after the party's Nevada caucuses.
67% 22%
The complicated upcoming voting schedule
Feb. 20

Democrats caucus in Nevada; Republicans hold a primary in South Carolina.

Feb. 23

Republicans caucus in Nevada.

Feb. 27

Democrats hold a primary in South Carolina.

Upcoming debates
Feb 25: GOP debate

on CNN, in Houston, Texas

March 3: GOP debate

on Fox News, in Detroit, Mich.

March 6: Democratic debate

on CNN, in Flint, Mich.

Campaign 2016
Where the race stands
Most Read



Success! Check your inbox for details.

See all newsletters

Close video player
Now Playing

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.