IRS buyouts — lightning strikes twice

The Internal Revenue Service has decided to offer a limited number of buyouts to many of the same employees who were asked if they would take $25,000 to retire ...

(Editor’s note: This column originally appeared Thursday afternoon. Federal News Radio posted the Federal Report early because the announcement of more IRS buyouts was breaking news and had not been reported elsewhere).

The Internal Revenue Service, Uncle Sam’s top moneymaker, advised employees Thursday it will have a very limited buyout program that will pay up to 400 workers to take regular or early-retirement no later than March.

The limited number of buyouts has been offered to many of the same employees who were asked if they would take $25,000 to retire last year. The agency has around 100,000 employees.

The maximum buyout payment before deductions will be $25,000. Employees who get offer letters can also take early retirement under the CSRS program, which covers most of those eligible. That allows them to get an immediate annuity if they are 50 with at least 20 years service, or at any age if they have 25 years of federal-military service. Annuities will be reduced 2 percent for each year the retiree is under age 55.

IRS officials said the new round of buyouts will be similar to those announced last November. They were generally limited to analysts, people in communications and outreach jobs, and embedded support operations.

The IRS collected $2.3 trillion in fiscal 2010, spending 53 cents for every $100 it brought in. It processed about 230 million returns.

Although Congress makes all the tax laws, — some splendid, some incredibly stupid and short-sighted — the revenue collecting agency takes most of the heat from the public. Many IRS offices were high-security long before the 9/11 attacks. In February 2010, an “angry” taxpayer crashed an airplane into a building with IRS offices in Austin, Texas. The pilot and a career IRS worker, who had a reputation for helping taxpayers work through problems, both died.

Politicians also find the IRS a convenient whipping boy. One presidential contender, Rep. Ron Paul (R-Tex.) has said he would abolish the agency altogether.

IRS made the call for a second round of limited buyouts after analyzing its budget situation. Many other agencies are going through the same process. The General Services Administration announced this week it has asked for buyout authority. It expects/hopes to downsize by 5 percent.

Air Force is having a second round of buyouts this year. When the numbers shake out, the 2011 and 2012 buyouts could impact as many as 13,000 civilians.

More buyout/early out offers are expected as agencies figure out their fiscal year 2012 budgets from Congress. IRS, for example, got $305 million less than in the previous year. In an email to workers, the agency said “…cost-cutting measures remain in place, but we do not see an immediate need for a second, expanded round of buyouts…”

The unknown in the buyout operation is how many people will take them. The government has a huge number of people already eligible to retire, and that almost doubles when people with the age and service to take early retirement are included. But in the past, officials have found that few people take early-retirement unless it is accompanied with a buyout, and that the number of buyout takers is usually less than projected in times — like now — when the economy is bad and the outside job market is weak.


Report: Shortchanging IRS budget hurts ability to collect revenue

2012 Buyout Guide


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