The Internal Revenue Service is finding itself once again being accused of impropriety as the tax collection agency is planning on paying out $70 million in employee bonuses, according to the Associated Press.
Despite the Obama administration ordering agencies to suspend bonuses because of the budget cuts known as the sequestration the IRS still plans on honoring what they say are legal obligations from a union contract by paying the bonuses, Fox News reports.
Sen. Chuck Grassley, R-Iowa, the senior Republican on the Senate Finance Committee, believes that a directive written by Danny Werfel, a former budget official who was recently appointed acting IRS commissioner, should force the IRS to not make the payment.
"The IRS always claims to be short on resources," Grassley said in a statement. "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."
A statement from the IRS defended the expected payment of the bonuses by saying that the agency has no choice because of an agreement they made with the National Treasury Employees Union, according to Politico.
"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," the statement said.
A message on the website of the NTEU gave the impression that the union believes that the bonuses are deserved and will be paid.
"NTEU fought hard for these awards programs," the message read. "They are an important part of compensation at the IRS and it is unfair to suspend these awards when employees have worked hard to earn them."
Grassley wrote a letter to Werfel in which he argued that the IRS's claim that they are legally obligated to pay the bonuses out because of their agreement with the NTEU is false.
"While the IRS may claim that these bonuses are legally required under original bargaining unit agreement, that claim would allegedly be inaccurate," Grassley said. "In fact, the original agreement allows for the re-appropriation of such award funding in the event of budgetary shortfall."
Sen. Orrin Hatch, R-Utah, thinks that given the current budgetary situation the government is in that paying the bonuses would be improper.
"[Paying the bonuses] looks like a payoff to union workers at a time when we're drowning in a sea of red ink," Hatch said. "Given the government guidelines on sequestration, this is certainly an issue that demands further scrutiny."
The previously mentioned memorandum from Werfel was issued April 4 and seems to back up the position of the IRS, according to the Associated Press.
"Until further notice, agencies should not issue such monetary awards from sequestered accounts unless agency counsel determines the awards are legally required," the memorandum read. "Legal requirements include compliance with provisions in collective bargaining agreements governing awards."
