IRS reform plan includes pay changes, buyouts

letters@govexec.com

Under the Senate-passed IRS reform bill, the agency would be able to offer employee buyouts, adjust pay scales and import up to several dozen new executives from the private sector.

The bill gives the IRS buyout authority until the end of 2002. It also modifies rules reserving many positions at the IRS for career employees, allowing more senior-level IRS positions to go to outside appointees. Executives could be granted bonuses for strong performance, though their annual compensation could not exceed the Vice President's salary ($175,400). In addition, the IRS could create a personnel demonstration project that could include broad-banding pay scales and new performance measurement systems.

The IRS will also undergo a major restructuring under the bill, shifting from a geographically focused organization centered around 33 regional offices to a customer-focused structure, organized around four business lines--individual taxpayers, small businesses and the self-employed, medium and large businesses, and tax-exempt organizations. As part of the reorganization, IRS Commissioner Charles Rossotti says he plans to "flatten" the agency, which has as many as eight layers of management between headquarters brass and front-line employees.

At a Council for Excellence in Government briefing Monday, Rossotti said middle managers at the tax agency have little power to deal effectively with problems.

"Being a middle manager at the IRS is not an easy job," Rossotti said, because the stovepipe structure of the agency leaves them with little authority. In surveys, IRS employees frequently blame middle managers for the agency's problems, but Rossotti said the real problem is that managers are stuck in the middle of complex organizational structures with too much administrative work and not enough control over their programs. "It's gotten to be so stacked," he lamented.

The commissioner also pledged more training for IRS employees. Rossotti said employees' biggest complaint is not about pay or benefits, but about their inability to help customers because training materials are out of date. On top of downsizing at the agency, Congress has continued to make tax laws more complex. This year, for example, between 700 and 800 tax law changes were made, Rossotti said.

"It's really almost a miracle what the people in the IRS do with the tax code they have to work with and the technology they have to work with," Rossotti said.

Rossotti described information technology at the IRS as "chaotic," explaining that for the next two years, the agency will be consumed by a $1 billion year 2000 computer conversion project. Simultaneously, the agency will be gearing up for a massive computer upgrade effort, to be headed by a prime contractor with project management responsibilities to make sure the IRS does not repeat its Tax System Modernization failures.

Meanwhile, debate continues about a proposed new IRS oversight board, which would include six private-sector members with management experience, along with the Treasury Secretary, the IRS commissioner and a representative of the IRS employees' union. The board would have oversight authority over IRS operations.

During debate in the Senate about the IRS bill, some Republicans tried to remove the Treasury Secretary and the union representative from the board, saying they would have conflicts of interest. But those efforts failed in Senate votes, and Democrats have vowed to oppose changing the board's membership in conference committee. The conference is expected to begin soon.

Rossotti said he was optimistic that the oversight board will not take an adversarial stance, suggesting that the board "could be very constructive."

"If we get a good board, it will be helpful," Rossotti said.

Many of the management proposals included in the IRS reform bill are being considered for governmentwide reforms. The Office of Personnel Management has proposed an overhaul of the Senior Executive Service this year, while the Defense Department is crafting changes to the department's entire civilian personnel system.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.