US Treasury dept cancels union contracts for IRS, Bureau of Fiscal Service staff — What changes? Are taxpayers affected?

In a move that could be viewed as a violation of a United States federal court order, the government's Treasury Department on 27 February terminated its collective bargaining agreements (CBAs) with union-tied employees at the Internal Revenue Service, as per an AP report.

Agreements with the National Treasury Employees Union (NTEU) at the IRS and the Bureau of the Fiscal Service have been scrapped and comes amid US President Donald Trump's push for more control over the federal workforce, the report added, citing two sources.

What is the IRS and Bureau of Fiscal Service?

The IRS is the government's revenue service, responsible for administering the Internal Revenue Code, collecting federal taxes, overseeing benefit programs i.e. the Affordable Care Act, providing tax assistance to taxpayers, and pursuing and resolving instances of erroneous or fraudulent tax filings.

Also, a part of the Treasury Department, the Bureau of the Fiscal Service, is known as the US government's “checking account”. It manages the government's accounting, bookkeeping, cash disbursements for activities, central payment systems, loans, and public debt, and acts as the payment rail for every federal agency.

Union contract terminations: What happened?

Workers at both agencies were told the CBA terminations have been initiated under an executive order signed by Trump in March last year. Scott Kupor, director of the Office of Personnel Management, had earlier this month sent a memo asking leaders to comply with the order and inform employees that “any applicable CBAs, whether with the NTEU or other labour unions” would be terminated.

AP reported that a letter was sent to IRS workers on Friday, where HR chief Alex Kweskin claimed the development “deepens our commitment of operating as one IRS, a collaborative team focused on serving American taxpayers.”

How has the union responded?

In a statement, Treasury employees union president Doreen Greenwald said the IRS “cannot unilaterally end” its contract with the labor union. She pointed to the federal sector's labour statute, which mandates that the agency have CBAs “with the exclusive representative of its bargaining unit employees”, the AP report added.

NTEU represents around 1,50,000 employees covering 37 agencies and departments, as per the report.

What has the court order stated?

Notably, NTEU had last year taken the government to court over Trump's executive order and the Washington DC based bench had issued a preliminary injunction. This injunction was later stayed on appeal.

More recently, on 26 February, a three-judge US Court of Appeals for the 9th Circuit in a separate hearing, cleared the way for the order to be implemented.

Notably, with one ruling cleared, but another still pending, the department risks violating the court order “at least in spirit”, according to a report by the US-based Government Executive publication.

What changes for Treasury Department employees now?

According to the Government Executive report, Friday's notice to employees included FAQs, which stated the following rules are now imposed:

• Employees may no longer elect a union official to help represent them in disciplinary or EEO cases.
• Representation can be sought by non-union affiliated officials.
• The email also warned employees that no statements are to be made to the press unless they are “explicitly authorized” to do so.

Are taxpayers likely to be impacted?

Not directly. But after the Trump administration laid off around 7,000 probationary employees (employed for less than a year) last February, experts warned this could have long-term consequences for federal finances.

They also warned that taxpayers seeking assistance could see longer wait times and delayed customer service. Katie Brewer told CBS MoneyWatch that she is advising people to “do their taxes as early” as possible in order to avoid long lines.

Like many other tax professionals, Terrance Hutchins of Logos Financial Group, told the publication he recommends electronic filing to receive timely refunds.