IRS Plans to Consolidate Paper Return Processing Operations

CCH Tax Day Report

The IRS has announced that it intends to consolidate paper return submission processing operations across the country, as electronic filing continues to grow and fewer taxpayers file paper returns. The Service has identified three locations for consolidation through the year 2024, in view of the anticipated decreases in future workload stemming from a decline in labor-intensive paper processing.

The IRS reported that it plans to cease paper return submission processing operations in Covington, Ky., in 2019, Fresno, Calif., in 2021 and Austin, Texas in 2024. The Service emphasized that submission processing was only part of its wider operations in these three location. At the end of this process in 2024, the IRS anticipates maintaining two submission processing locations: one at its Kansas City site, which would focus on individual returns; and the other at its Ogden, Utah, location, which would focus on business returns.

In response to the announcement, Tony Reardon, national president of the National Treasury Employees Union (NTEU), characterized the news as “distressing for our members, many of whom have been loyal IRS employees for years.” Reardon indicated that the NTEU will be in further discussions with the Service.

The IRS projected five-year cost savings of about $266 million due to the consolidation of the three sites and annual savings in subsequent years of more than $53 million. The savings are expected to be used to enhance taxpayer service and on tax enforcement and information technology. The IRS emphasized that, in past consolidations, many of these employees were able to get jobs elsewhere within the Service.

IRS Statement on Return Processing Consolidation

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