New criticism for IRS: $70M in bonuses

WASHINGTON -- Already reeling from a pair of scandals, the Internal Revenue Service is drawing new criticism over plans to hand out millions of dollars in employee bonuses.

The Obama administration has ordered agencies to cancel discretionary bonuses because of automatic spending cuts. An IRS spokeswoman, Michelle Eldridge, said the agency is following legal obligations for "awards" under a union contract.

The agency is about to pay $70 million in employee bonuses, said Sen. Chuck Grassley of Iowa, a senior Republican on the Senate Finance Committee, which has jurisdiction over the IRS. He said his office has learned that the IRS was to execute an agreement with the employees' union yesterday to pay the bonuses.

"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 IRS said it is negotiating with the National Treasury Employees Union over the matter "in recognition of our current budgetary constraints" but did not dispute Grassley's claim that the bonuses are imminent.

Eldridge, however, would not say whether the IRS believes it is contractually obligated to pay the bonuses.

The union did not respond to requests for comment. -- AP