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IRS About to Pay $70M in Union-Mandated Bonuses

Despite a directive from the Obama administration, the Internal Revenue Service will pay out $70M in bonuses, according to Senator Chuck Grassley. "Sen. Chuck Grassley of Iowa says his office has learned that the IRS is executing an agreement with the employees' union on Wednesday to pay the bonuses."

The Senator said that those bonuses should have been canceled based on a directive from the White House Budget Office. 

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

The Office of Management and Budget released a statement asserting, "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."

Grassley sent a letter on Wednesday to Danny Werfel, Acting IRS director, stating that despite being notified by the IRS to reclaim $75 million in bonuses, "his office has learned that the IRS never followed up on the notice. Instead, Grassley said, the IRS negotiated a new agreement with the bargaining unit to pay about $70 million in employee bonuses."

The information about the bonuses came from a "person with knowledge of IRS budgetary procedures." 

The Senator went on to write, "While the IRS may claim that these bonuses are legally required under the original bargaining unit agreement, that claim would allegedly be inaccurate," Grassley wrote. "In fact, the original agreement allows for the re-appropriation of such award funding in the event of budgetary shortfall."


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