E-filing’s popularity lets IRS shift resources to enforcement

The IRS is reorganizing some operations as a result of increased electronic filing by taxpayers and technology use by agency employees, IRS Commissioner Mark Everson said today.

In 2005, the IRS will lay off 2,400 employees in various internal support positions as a consequence of the changes, Everson said in a statement, which will allow the agency to hire 2,200 more enforcement staff members. Other employees affected by the initiatives will be redeployed within the agency.

“By tightening operations, we can devote more people to front-line positions and strengthen tax enforcement activities,” Everson said.

IRS will in 2005:

  • Close the Memphis, Tenn., tax return processing operations because of a big increase in e-filing and a corresponding drop in paper tax returns


  • Consolidate back-office processing for exam, collection and insolvency cases from 92 locations to four


  • Centralize much of its internal support operations, which the agency says will reduce costs and employees.


  • None of the initiatives will reduce the number of IRS employees who deal directly with taxpayers or lessen the number of office locations where taxpayers can interact directly with IRS personnel, Everson said.

    The savings from the three initiatives will let the IRS bulk up enforcement, which had experienced shrinking resources of criminal investigators, revenue agents and revenue officers from 1996 through 2002, according to the statement.

    The number of returns filed electronically has grown from 4 million in 1990 to 53 million in 2003, reducing the need for employees to enter the data manually. The IRS already stopped processing paper returns at its Brookhaven center in Holtsville, N.Y., in September. (Click for Dec. 15, 2003, GCN story)

    The Small Business/Self-Employed Division will consolidate its case-processing operations for examination, collection and lien processing. The IRS also will centralize insolvency operations, which protect the government’s interest in bankruptcy proceedings. About 1,500 employees in 92 locations currently perform these back-office duties.

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