IRS announces major overhaul, layoffs

IRS officials announced a massive restructuring plan Wednesday, which will result in 2,400 layoffs at the tax agency.

The IRS plans to close its Memphis, Tenn., tax return processing facility in October 2005, and will significantly streamline collections procedures, Commissioner Mark Everson said. In 2005, the agency will shift collection and insolvency caseworkers currently spread among 92 different offices into four locations. These changes, made possible by a substantial growth in electronic tax filing, are "fiscally responsible" and will allow the agency to hire new investigators, Everson said.

"Consolidation of back-office case processing is the kind of thing done years ago in the private sector," Everson said. He added that services to taxpayers would not suffer from the restructuring.

But the IRS overhaul would affect 6,700 of the agency's employees, about 6 percent of its 115,000-member workforce. Of these, 2,400 employees should expect to face involuntary separations after January 2005, Everson said. Most of those employees work at the Memphis center, and nearly 2,000 are seasonal or contract workers.

The National Treasury Employees Union, which represents IRS employees, vowed to fight the layoffs. "Most of the employees targeted by these actions are women and minorities who have probably worked for the IRS for most of their careers," NTEU President Colleen Kelley said.

Rates of electronic filing may have actually leveled off, Kelley explained, rendering the IRS' decision "premature." About 4 million taxpayers filed their returns electronically in 1990, according to the IRS. By 2003, that number jumped to 53 million.

But the General Accounting Office recently concluded that only 61 percent of individual taxpayers will file returns electronically by 2007, nearly 20 percentage points below the IRS' goal for online return rates. "It is premature to start talking about eliminating workers that taxpayers depend upon to process their tax payments and tax returns in a timely manner," Kelley said.

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.