The IRS is set to pay $70 million in employee bonuses, according to Senator Chuck Grassley (R-Iowa), ignoring a White House policy enacted by President Obama, which cancelled all discretionary bonuses due to automatic cuts that started this year.
The Senator's office has revealed that the IRS reached an agreement with the employees' union to pay the bonuses in direct contradiction of an April directive from the White House Budget office.
Yahoo reports that the directive was written by Danny Werfel, a former budget official who has been appointed acting IRS Commissioner.
The IRS has acknowledged the fact that the employee bonuses are in the process of being paid and said it has a contractual obligation to do so.
"The IRS always claims to be short on resources," Grassley said. "But it appears to have $70 million for union (employee) 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."
"Guidance directs that agencies should not pay discretionary monetary awards at this time, unless legally required," IRS spokeswoman Michelle Eldridge said in a statement. "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."
According to Yahoo!, the National Treasury Employees Union did not respond to requests for comment.
The tax agency has been under fire ever since it was uncovered that it had wrongly targeted conservatives groups applying for tax-exempt status during the 2010-2012 elections.
Following that scandal, the IRS inspector general issued a report documenting extravagant employee conference expenses during the same time period.
Three congressional committees and the Justice Department are investigating the targeting of conservative groups. Much of the agency's top leadership has been replaced since the scandals broke.
In a letter to Werfel on Tuesday, Grassley said the IRS notified the employee union March 25 that it intended to reclaim about $75 million that had been set aside for discretionary employee bonuses.
The Senator said his office has learned that the IRS never followed up on the notice. Grassley said that, instead, the IRS negotiated a new agreement with the bargaining unit to pay about $70 million in employee bonuses.