The Internal Revenue Service (IRS) has announced plans to close more processing sites around the country.
The most recent sites targeted for closures are those that process paper tax returns in Covington, Kentucky/Cincinnati (2019); Fresno, California (2021); and Austin, Texas (2024). According to the IRS, the result would be a loss of 1,800 employees in Covington; 3,000 employees in Fresno; and 2,400 employees in Austin. The reason for the closures are largely economic: the percentage of individual tax returns filed electronically has grown from 58% in 2008 to 86% in 2015. The IRS anticipates that the numbers of taxpayers filing paper returns will continue in future years.
The National Treasury Employees Union (NTEU), the nation’s largest independent union of federal employees, representing 150,000 workers in 31 departments and agencies including the IRS, responded to the proposed changes, saying:
NTEU will aggressively pursue all available measures to avoid or mitigate the impact of these closings on affected employees in these three locations. Their well-being is our top priority. We want to make sure our members are treated fairly and that all steps are taken to avoid actions that may harm them.
As part of its next steps, the NTEU has asked for a detailed briefing from the IRS.
The closures are a part of consolidation efforts which began in 2003 under then serving IRS Commissioner Mark W. Everson. Those efforts led to a consolidation of ten sites into five locations that process paper tax returns: locations were Covington, Kentucky/Cincinnati; Fresno, California; Austin, Texas; Kansas City, Missouri; and Ogden, Utah. Following the closures announced this fall, only two sites that process paper returns would remain open after 2024: Kansas City, Missouri, and Ogden, Utah.
The IRS indicated that, in the past, many IRS employees at consolidated sites were relocated within the IRS. The IRS suggested that it would again work to reassign some of those willing to move to another center, saying:
Following a detailed review over several months covering factors ranging from employee impact, cost savings and building conditions, the IRS plans to continue the site consolidations by ending submission processing operations in Covington, Ky., in 2019, Fresno, Calif., in 2021 and Austin, Texas in 2024. By planning ahead, the IRS can minimize employee impact. In the past closures, many of the submission processing employees have been able to transition into other positions at the IRS.
The IRS emphasizes that submission processing is only part of our wider operations in these three locations, and the IRS will continue to be a major employer in these areas due to work for other parts of the agency. To minimize employee impact moving forward, the IRS will be hiring temporary employees, as needed, for the 2017 filing season in the Covington and Fresno submission processing operations rather than hiring permanent employees. The IRS will be working with NTEU during this process to offer mitigation strategies and provide new opportunities to affected employees.
Smaller spaces and fewer rents will, according to IRS, save taxpayer dollars: the IRS projects that the five-year cost savings from consolidating the three sites will be about $266 million. This should also result in annual savings in subsequent years of more than $53 million.
Where will those dollars go? The IRS anticipates these savings will be used to focus on continuing IRS needs for taxpayer service, tax enforcement, and information technology.
Budget cuts at IRS have topped $900 million since 2010. Since that time, the IRS workforce has been reduced by 17,000 positions.
