With mandatory government spending cuts looming, Acting IRS Commissioner Steven Miller sent a Memo to all IRS employees on Thursday (See Below), outlining the agency’s plans in the event sequestration occurs as planned on Friday.
He outlined spending cuts the IRS plans to make, including employee furloughs, but emphasized that the furloughs would not affect tax season. IRS employees have been informed of potential furloughs of potential furloughs of five to seven days, according to the National Treasury Employees Union. The union plans to bargain with the IRS to find enough cost savings that would spare IRS employees from the prospect of unpaid workdays.
The Internal Revenue Service says those across-the-board automatic spending cuts will not delay processing of individual income tax refunds, and may mean fewer audits.
The agency has warned its more than 100,000 employees to expect furloughs of one day per pay period — but not until this summer, after tax filing season ends.
“At this point, we expect that every one of us would take no more than one furlough day per pay period… for a total of between five to seven furlough days,” IRS Commissioner Steven Miller wrote to staff in a memo obtained by ABC News.
“The IRS is projecting between five and seven furlough days beginning sometime this summer,” NTEU president Colleen Kelley said in a statement. “We have had informal discussions with the agency about this matter and we will engage in bargaining when the formal notice of furlough is provided.”
Staffing shortages at the agency could have an impact on tax administration, taxpayer service and tax enforcement if the budget cuts go through, as well as efforts at combating identity theft-related tax fraud, in addition to the IRS’s interactions with the tax practitioner community.
Miller listed three other ways in which the IRS will cut spending: 1. Continue a hiring freeze; 2. Reduce funding for grants and other expenditures and 3. Cut costs for travel, training, facilities, and supplies.
On Thursday, the Senate rejected two bills that would have averted the sequestration, thereby almost assuring that the automatic spending cuts will occur, as required by the Budget Control Act of 2011, P.L. 112-25.
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MEMORANDUM FOR ALL IRS EMPLOYEES
FROM: Steven T. Miller /s/
SUBJECT: Information on potential sequestration on March 1
This Friday, March 1, marks the effective date of across-the-board spending cuts for nearly all federal agencies, also known as sequestration. Should sequestration occur, we will still be able to operate, but our overall funding for the remainder of the fiscal year will be reduced. Therefore, it is essential that we prepare for whatever events may unfold and continue to look for opportunities to reduce expenses so we can minimize the impact on IRS’ mission to serve the American public and the impact on your lives as well.
If sequestration occurs, we will continue to operate under a hiring freeze, reduce funding for grants and other expenditures, and cut costs in areas such as travel, training, facilities and supplies. In addition, we will need to review contract spending to ensure only the most critical and mandatory requirements are fully funded. Despite our current and planned efforts to cut expenses, the reality is that our greatest expense, by far, is employee pay.
As a result, if sequestration occurs and our budget is reduced for the remainder of the fiscal year, it appears that a number of furlough days will be necessary given the size of the anticipated budget cut to the IRS. Let me be clear: We know that asking you to take even one furlough day is difficult. That’s why we’ve spent so much time and energy trying to minimize the impact on our employees as much as possible while carrying out our mission. We will continue to look for cost savings in the coming weeks and months.
At this point, we expect that every one of us would take no more than one furlough day per pay period, beginning sometime in the summer, after the filing season ends, and possibly through the remainder of the fiscal year, for a total of between five to seven furlough days. We will provide you with at least 30 days’ notice prior to starting furlough. We will also engage with NTEU as appropriate to ensure that any necessary furloughs are applied in a fair and appropriate manner and consistent with our collective bargaining agreements. If you have questions on this issue, we encourage you to go to the
Office of Personnel Management website, which has helpful information and answers to frequently asked questions regarding furloughs. We will provide more details regarding our sequestration contingency plans as details become available. We recognize how distracting and difficult this news may be, but we know that you and your colleagues are dedicated public servants who will continue to deliver
Journal of Accountancy
Read more at: Tax Times blog
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