A message from IRS commissioner John Koskinen: As Ive visited with employees across the country during my first

weeks on the job, one topic that has come up repeatedly involves the cancellation of the 2013 performance awards. Ive heard your concerns, and today I want to share with you an important update. Last year was an extremely challenging budget year with sequestration. I understand the tough decision that had to be made to eliminate performance awards last summer. No one was happy with that decision, but I also understand there were many difficult choices no matter what decision was made. I am pleased to be able to announce that, following long discussions and negotiations with NTEU, we have reached an agreement that will allow the IRS to pay Fiscal Year 2013 performance awards to Bargaining Unit employees. In light of our continuing dire budget situation, the award payouts will be about 1 percent of the BU salary base. While this is less than the 1.75 percent provided in previous years, I am happy we have been able to reach agreement with NTEU so that we can recognize our high-performing employees who have not seen pay raises for several years. We are also announcing today that FY13 performance awards of about 1 percent will be paid to other eligible qualifying employees, including management officials, managers and other NBU employees. Senior Executive Service awards are still being finalized. Like the BU awards, these will be at reduced rates from previous years. In addition, for the first time, the agreement with NTEU also puts BU employee award payouts on the same schedule as everyone else at the IRS. So now payouts will be made early in the fiscal year for work performed the previous year. Were working on timing details for when these performance award payouts will be provided. A number of system and payroll adjustments must be made, and we expect they will be completed to allow payouts in April. We will update you as more information becomes available. Eliminating the awards last year was a tough choice to make, and I personally want to thank NTEU leadership for their efforts during this very difficult situation. I have known NTEU President Colleen Kelley for years, and I look forward to a good and productive working relationship with her and the entire NTEU team. While neither side got everything they wanted with this agreement, it represents an appropriate compromise in the circumstances in which we find ourselves. I believe that this is a positive step forward, and one that makes sense for employees and the IRS at the present time. Some may ask if the award money would be better spent in other ways. Following my visits with employees in recent weeks, I believe the answer is clear: This is money best spent on our existing employees. You and your colleagues do impressive work on a wide

range of efforts across the IRS, from taxpayer service and tax enforcement to IT and operations support. The performance award payouts are in recognition of that great work done in very trying circumstances. I firmly believe that this investment in our employees will directly benefit taxpayers and the tax system. During this filing season, I know you will continue to work hard and do your best to help the nations taxpayers. I am proud to have the opportunity to join you in this work, and I will do everything I can to support your efforts. Thank you again for all you do. John Koskinen