House approves pay increase for IRS employees

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As part of a general government appropriations bill, the House approved a 3.1 percent pay hike for federal employees, including workers at the Internal Revenue Service.

The bill would give a 2.6 percent raise across the board to federal employees, plus 0.5 percent toward “locality pay,” for an average increase of 3.1 percent. The raise would equal what is currently proposed for members of the military.

The bill would also provide the IRS with $12 billion in fiscal year 2020, an increase of nearly $700 million over its budget in the current fiscal year. It also boosts funding for IRS enforcement by $297 million, taxpayer services by $67 million, and business systems modernization by $140 million.

“For an agency that has lost 23,000 full-time employees over the last nine years, the renewed investment is a welcome sign that Congress is ready to reverse the decline and rebuild the IRS’ workforce, enforcement activity, technology and customer service to even higher levels,” National Treasury Employees Union national president Tony Reardon in a statement Wednesday.

The NTEU, which represents IRS employees, praised the pay boost, which still needs to be passed by the Senate.

“This legislation is a breakthrough for federal employees,” said Reardon. “It is a strong rebuke of the constant drumbeat of pay freezes proposed by this administration and a recognition that it is time to restore funding to government agencies that have been devastated by repeated budget cuts, especially the IRS. NTEU will now concentrate our efforts on urging the Senate to be as supportive of federal employees and pass this bill into law.”

The IRS has been working on boosting its hiring to meet the labor shortages from years of budget and staffing cuts, combined with retirements and the demoralizing impact of a series of government shutdowns in recent years (see IRS faces hiring shortages amid workforce attrition). IRS Chief Counsel Michael Desmond discussed his plans for the chief counsel’s office at Bloomberg Tax’s Leadership Forum in New York on Thursday, noting that developing guidance for the Tax Cuts and Jobs Act is his main priority.

“Over the last five or 10 years, we’ve had what I would call a pause in hiring,” he said at the forum. “I speak only for Counsel, but this is parallel on the commissioner’s side as well. We’ve had a decline of about 15 or 20 percent in our attorney count over the five or 10 years, and the attorneys that we’re losing are mostly to retirements, so we’re losing some very valuable talent there.”

The Senate confirmed Desmond four months ago for the chief counsel post. “It’s been a great time for me to arrive at Counsel because we are for the first time in a number of years able to hire behind 100 percent attrition, which has been a great opportunity,” he said. “We also got some good funding as part of the Tax Cuts and Jobs Act to bring on some lateral hires who have been instrumental in getting out the TCJA guidance. So over the last year or so, we’ve been in a very positive position with respect to hiring. We anticipate by the end of December hiring behind 100 percent of attrition this year and having a number of new honors attorneys come on board, so that’s a great thing for us."

"The challenge going forward will be to take the younger attorneys and bring them up to speed and replacing folks who have been at the agency for decades in many cases," he explained. "That’s going to be a challenge. But I’ve been very encouraged to see the TCJA hires come in and really hit the ground running. Many of those were lateral hires who have been able to come into the agency at a time when we’ve got brand-new provisions, the first real fundamental tax reform in almost a generation. We’ve got a lot of energized attorneys who are embracing the work they are doing on the TCJA provisions, so that’s been great to see.”

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