IRS to Overhaul Operations in Efficiency Move
The Internal Revenue Service on Wednesday announced plans for a fundamental reorganization of the agency that will affect as many as 20,000 workers and could sharply increase the agency’s effectiveness in tracking down tax cheats.
The reorganization fits with the Clinton Administration’s “reinventing government” initiative but primarily is an outgrowth of the IRS’ $12-billion replacement of its computer systems. The new systems will reduce by about 34% the number of people needed to process tax returns and do other manual chores, officials said.
The agency expects to “reinvest” these savings by retraining workers to be auditors, revenue agents and other types of tax enforcers. IRS officials said the combination of the more sophisticated computer systems and the use of more employees to check up on taxpayers is designed to increase tax collections.
In addition, IRS managers and the union that represents workers at the agency said the retraining will help IRS employees qualify for more interesting and better-paying jobs. Currently, many of these workers perform such repetitious and monotonous tasks as sorting forms from the 115 million tax returns the IRS receives every year.
The IRS’ goal is to increase the rate at which taxpayers voluntarily pay their taxes from the current 82.3% to 90% by 2001. Each percentage point of increase would mean an extra $7 billion in revenue for the Treasury, officials said.
In terms of the way the IRS does business, “this is the most important announcement . . . in 40 years,” said Larry Westfall, IRS modernization executive.
He and other officials were quick to insist that the agency does not expect to lay off workers.
In a televised address to IRS workers Tuesday, Commissioner Margaret Milner Richardson gave “my personal commitment” that career workers “will be guaranteed a job” and will be offered training to qualify them for new posts.
Officials said they expect some workers to leave through attrition, early retirement or buyouts if Congress authorizes them. But overall, they expect the IRS work force to be the same size in 2001 as it is today.
In addition to beefing up enforcement activities, the agency will redeploy some workers into taxpayer assistance efforts. The goal is to get 95% of taxpayer problems resolved with a single telephone call.
To accomplish these ends, the agency will:
* Reduce from 10 to five the service centers around the country that receive and process tax returns. The five will be renamed “submission processing centers” and will continue to receive and process paper returns. They are in Austin, Tex.; Cincinnati; Kansas City; Memphis, and Ogden, Utah. The other centers--in Fresno; Philadelphia; Atlanta; Andover, Mass., and Brookhaven, N.Y.--will remain open as “customer service centers,” although their staffs will shrink.
* Consolidate 70 toll-free telephone and taxpayer correspondence sites into 23, including sites in Baltimore and Richmond.
* Reduce central computerized record-keeping centers from 12 to three.
