In the recent budget deal struck between Congress and President Barack Obama, the Internal Revenue Service (IRS) budget will be cut by $346 million to $10.9 billion — $1.5 billion less than the Obama administration asked for.
As the result of a budget cuts, the IRS is facing a temporary shutdown and furloughs said IRS Commissioner John Koskinen earlier this week.
The furloughs, which are forced unpaid days off for employees during an IRS closure, is under reluctant consideration to save money which Koskinen estimated at approximately
$29 million a day. Koskinen continued: “I view it as: Are we going to have to shut the place down? There is no way we can say right now that that won’t happen.”
The news comes a day after Koskinen put IRS employees on notice that the IRS would eliminate overtime and that a hiring freeze would be imposed on the agency – a tough situation to be in when IRS managers sit down to negotiate with the National Treasury Employees Union. Union member salaries and benefits make up about 75 percent of the IRS costs.
These cuts will have an even greater impact this coming year as the IRS prepares to implement Obamacare tax credits and penalties for the first time while instituting a one percent federal employee pay increase passed by Congress in the recent fiscal year.
“It’s not just the $350 million cut in the budget; it’s the fact that we have $250 million in new expenses for a government-wide pay raise… So we really have a $600 million hole this year,” he said.
Members of Congress justified the cuts by reminding detractors that the IRS paid out bonuses to IRS employees involved in the enforcement scandal against conservative organizations and Tea Party groups and the lavish conferences the IRS has hosted in recent years.
