New bill would restore IRS critical pay for IT hires

A new bill by Sens. Rob Portman (R-Ohio) and Ben Cardin (D-Md.) would reinstate a key hiring tool to boost IT talent at the Internal Revenue Service.

The draft bill, called the Taxpayer Protection Act, would implement wide-ranging reforms to the organizational structure of the IRS, its enforcement procedures, customer service and other areas.

One section would reauthorize the agency’s streamlined critical pay authority until 2023 to help it recruit better IT talent. The program would give IRS the ability to sidestep the laborious federal hiring protocols, quickly make new hires and offer substantially higher pay -- as much as $240,000, according to the Treasury Department's inspector general -- than it would under the normal federal hiring process.

“It has been 20 years since the last significant IRS reform, and it is time to update the agency once again,” Portman said in a statement. “The bipartisan Protecting Taxpayers Act will restructure and reform the IRS to make it more responsive and accountable to the needs of taxpayers and help restore Americans’ faith in this agency.” 

IRS officials have been keen for Congress to renew the critical pay authority since it last expired in 2013. Former Commissioner John Koskinen said the agency had seen its total workforce shrink by more than 17,000 between 2010 and 2016, while a separate analysis by the Treasury IG found that the loss of human capital was “a serious underlying issue with wide-ranging implications” and included “many employees with substantial institutional knowledge and technical expertise.” An annual audit by the Treasury IG last year found that most of the 93 hires IRS made through the now-expired streamlined critical pay authority between 1998 and 2013 were placed within the agency’s IT organization.

Portman and Cardin’s bill would codify that trend, re-casting the purpose of the program to ensure “the functionality of the information technology operations of the Internal Revenue Service” rather than one used to facilitate “the successful accomplishment of an important mission.”

Both acting Commissioner David Kautter as well as the Charles Rettig, the Trump administration’s nominee to fill the post full time, have tied restoration of critical pay authority to larger goals pushed by Congress to modernize IRS systems and better protect taxpayer data.

“Under streamlined critical pay, the IRS would be able to bring someone on in six weeks instead of six months, and they could pay someone … probably up to a third more than they could otherwise pay if they brought them on the general government pay scale,” Kautter told the Senate Finance Committee in February. “And when you get into the areas of technology and cybersecurity, having that ability to hire somebody in a hurry [is crucial]. I’ve seen the IRS lose people because of the amount of time it takes to get them on board.”

Four months later, Rettig told those same lawmakers that if he is confirmed, he will need the program to entice top IT and cybersecurity talent and carry out his overhaul of the agency’s data security policies.

"I think its publicly known that the IRS system gets attacked between 2 and 3 million times a day and [that pay authority is] critical to the success of this country and to the appearance and trust that the American taxpayers have in the IRS that we have a system that can defend taxpayer data better than any system in the planet," he said.

Earlier this month, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) introduced their own IRS reform bill, which also includes a provision to re-establish critical pay authority for IT positions.