IRS to shut 68 customer service centers

The Internal Revenue Service on Friday announced that it will close nearly a fifth of its taxpayer assistance centers this fall, at a cost of about 430 jobs.

The move comes as more taxpayers are turning to the Internet and a toll-free number for information, and will allow the IRS to deliver the same quality of service more efficiently, said Richard Morgante, deputy commissioner of the agency's wage and investment division. But Colleen Kelley, president of the National Treasury Employees Union, which represents the affected employees, was quick to criticize the decision as "rushed" and "not well thought-out or planned."

IRS officials face budget constraints on the service side if Congress grants President Bush's fiscal 2006 request. The White House proposal calls for a 1 percent decrease in spending on customer service, along with an 8 percent increase in money devoted to enforcement of tax laws.

"While we continue to rebuild our enforcement program in these difficult budgetary times, we must make some hard choices to be able to provide the best possible service at the lowest possible cost," said IRS Commissioner Mark Everson in a statement. Noncompliance costs the government more than $25 trillion in revenues a year, he said, and enforcement has "dropped to unacceptable levels."

By shutting down 68 of 400 assistance centers, the IRS expects to save around $45 million next year, Morgante said.

The IRS will offer early retirements, buyouts and a priority placement program to help the 434 employees who will lose their jobs when the assistance centers shut in October. Many of those employees have "the technical requirements that would qualify them for compliance positions as we increase our enforcement staffing," Everson said.

For example, some of the affected assistance center employees would likely be qualified for tax compliance officer or revenue agent jobs, Morgante said. Details of the priority placement program haven't yet been finalized because the agency just announced the locations of the 68 centers that will close.

The Office of Personnel Management has granted the IRS permission to offer buyouts and early retirement incentives, but the agency still has to complete negotiations with NTEU on such offers, Morgante said. "Our intention is to offer as wide a mitigation [package] as we can," he added.

Employees at taxpayer assistance centers provide in-person help interpreting tax laws. The assistance workers also can prepare returns for taxpayers who earn less than $36,000 a year or qualify for the Earned Income Tax Credit.

But demand for assistance center services is falling as more people file returns electronically and turn to the agency's Web site or toll-free helpline for guidance, according to IRS statistics. Visits to customer assistance centers fell by about 1.8 million between fiscal 2002 and fiscal 2004, a 19 percent decrease, while visits to IRS.gov rose by 128 percent.

These statistics are skewed, Kelley said, because some customer assistance centers cut back their hours significantly in the past year. Customers may not have visited because the centers were closed, she said.

Kelley also questioned the IRS' method of determining which locations to close. Agency officials arrived at the decision after analyzing data on each center's workload, demographics and operating expenses. But Kelley said she hasn't seen the numbers used and is skeptical, especially of choices to close assistance facilities in urban areas such as Brooklyn, New York.

The closings are happening in such "a ridiculously short time frame" that employees will have little chance to find new jobs, Kelley added. She is trying to convince lawmakers to attach an amendment to the fiscal 2006 Transportation-Treasury appropriations bill that would bar the IRS from closing the assistance centers.

Kelley is concerned that Friday's announcement marks the beginning of a massive IRS effort to scale back services. "This is not a budget issue," she argued. "They have the money. What they want to do is spend the money differently."

Morgante said the closures simply signal an attempt to boost efficiency.

If taxpayers are unable to visit one of the remaining assistance centers, they can call the IRS' toll-free help line or visit the agency's Web site, Everson stated. Local libraries and post offices offer paper forms, and the IRS operates 14,000 Volunteer Income Tax Assistance sites across the country.