Next March, many IRS employees should expect a performance bonus of 1 percent of their base salary, Commissioner John Koskinen said in an email to employees on Monday.
"I believe that rewarding our high-performing employees is a vital investment for our nation's tax system," Koskinen said in the email obtained by The Associated Press.
"While this is below the 1.75 percent from FY 2012 and previous years, it's significant that we could work out an agreement ... to recognize our hardworking and high-performing employees."
The bonuses come at a time when the agency's budget is down $850 million below the 2010 level.
In a move "designed to protect the integrity" of the program, Koskinen proposed a new policy that rules out bonuses for those employees who willfully "fail to file any tax required under the Internal Revenue Service Code of 1986 on or before the required date (including extensions), unless the failure is due to reasonable cause and not willful neglect."
The new rule is in response to an internal report issued earlier this year that discovered the agency paid $1 million in bonuses to employees who owed back taxes, reported the Washington Examiner.
Some, like Senate Republican Orrin Hatch of Utah, didn't take the news too lightly.
"This Thanksgiving, Americans are grateful for many things, but the IRS is not one of them. The agency - rife with scandal, mismanagement and unaccountability - is awarding bonuses with the very tax dollars they collect from hardworking Americans," he said in a statement.
"It's no wonder the American people find it hard to believe the IRS needs more money when the agency fails to collect back taxes from their own employees and instead rewards them with bonuses," said Hatch, the next likely chairman of the Senate Finance Committee. "American families have been doing more with less for far too long now, and it is time the IRS do the same."
Hatch's aides told the Examiner that the new rule doesn't address those who still failed to pay their taxes after filing with the IRS.
"Meaning, an employee can file a tax return, not pay, and get an IRS bonus," an aide said. "A lot of people file without fully paying. They are eligible for bonuses."
The IRS released a statement addressing the issue, which said employees who show "willful tax noncompliance" will have bonuses withheld, but those with "legitimate unintended errors" will still receive the extra pay.
"It's important to remember that not everyone at the IRS is a tax expert. Some work in non-tax specific areas in occupations ranging from IT programmers, administrative professionals to human capital specialists. Where employees have been found to have made unintentional tax mistakes, they would generally still be eligible to receive performance awards they have earned," the statement read.
