Opens in a new tab

IRS wants to trade bonuses for furlough days as House appropriations subcommittee cuts IRS’ fiscal 2014 funds

July 10, 2013

If the acting Internal Revenue Service chief has his way, all tax agency employees will be working — and getting paid — on the previously announced furlough days of July 22 and Aug. 30.

AFGE members march in San Antonio to protest sequestration furloughs
American Federation of Government Employees members in San Antonio, Texas, were among those who participated in 100 rallies across the country as a part
of AFGE's National Day of Action on March 20 to protest sequestration and
furloughs. Photo courtesy AFGE via Flickr Creative Commons.

But in exchange for putting all of the IRS' almost 98,000 employees back to work as usual, some of those workers would not get their expected bonuses.

That was the word from IRS Principal Deputy Commissioner Daniel Werfel via a July 9 agency-wide email to agency staff. Werfel wrote:

"While we have made significant progress in cutting costs, we
must be committed to doing more. To that end, and in this unprecedented
budget situation, I do not believe the IRS should pay performance awards
this year to employees, managers or executives. 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."

The budgetary situation is sequestration's automatic spending cuts, which led to the IRS closing all its offices and some of its automated services for three days this summer.

By not paying almost $98 million in employee bonuses
this year — $76 million for union workers; $19.3 million for nonunion
workers, including managers; and $2.5 million for executives — Werfel said the IRS could afford to keep all workers at their jobs the remainder of this fiscal year.

Congress happy, but still cuts IRS money: Werfel's decision is welcomed by many in Congress, that is, Republicans in control of the House, who raised the question of bonus payments during several hearings on IRS troubles this year.

The possibility that Lois Lerner, the former head of the IRS' tax-exempt division, might receive a bonus was particularly irksome to many members of Congress. Lerner is on paid leave while the IRS, the Treasury Inspector General for Tax Administration (TIGTA) and the Department of Justice continue to investigate charges that the IRS used inappropriate search criteria in reviewing organizations' requests for tax-exempt status.

And today (July 10), the House Appropriations Financial Services and General Government
Subcommittee voted to cut the IRS' fiscal year 2014 budget by 24 percent from 2013 levels, in part because of the bonus payment issue.

The funding bill includes specific spending restrictions that read like a table of contents in the book of the IRS' recent missteps.


The appropriations subcommittee would:

  • Withhold 10 percent of funds for IRS enforcement activities
    until all recommendations from TIGTA to prevent future inappropriate targeting are
    implemented.
  • Prohibit funding for conferences until all of TIGTA's recommendations regarding such meetings have been implemented.
  • Prohibit funding for employee bonuses and awards until a
    review of the effectiveness of bonus and award programs is completed.
  • Prohibit funding for the making of videos that have not been reviewed or certified to be appropriate.


The funding bill that leaves the IRS with a budget of $9 billion, about $4 billion less that requested in the President's annual budget, also would increase the fiscal 2014 budget for TIGTA by $5.5 million more than requested.

Subcommittee Chairman Ander Crenshaw (R-Fla.) justified the cuts to the IRS' budget and increase of the investigating office as necessary "to help the IRS regain Americans' trust."

The subcommittee' ranking minority member
José E. Serrano (D-N.Y.), however, disagreed.

Noting that the IRS has been in the news lately
for the wrong reasons, Serrano said a multi-billion
dollar cut to the agency will do nothing to solve the agency's problems. Rather, he said, "This funding
level is something that will make tax cheats everywhere smile."

You also might find these items of interest:

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
How to avoid being haunted by ghost tax return preparers

October 28, 2026

Some ghosts this Halloween are cool trick-or-treaters. But when it comes to taxes, beware of…

Read More
TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
Leave the first comment