IRS to Lay Off as Many as 2,400 Workers

adding nearly as many new jobs to go after tax cheats

Jan 7, 2003
By JENNIFER C. KERR, Associated Press Writer

WASHINGTON - The Internal Revenue Service announced plans Wednesday to cut around 2,400 jobs, mostly clerical, but said it would add nearly as many new positions to go after tax cheats.  

IRS Commissioner Mark Everson said a dramatic increase in the number of electronic tax returns means fewer data entry workers are needed to process them.

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

The job cuts will be made early next year. Savings from them will go toward hiring 2,200 criminal investigators, revenue agents and revenue officers to pursue tax scofflaws.

"Our efforts are focused on assuring compliance by high-income taxpayers and corporations, and addressing and attacking abusive tax shelters, and holding accountable those who engage in criminal activities that violate the tax law," he said.

The changes follow a period of about five years in which the agency made customer service its main priority, but during that time the number of investigators and agents declined sharply, leading to a decrease in enforcement.

The National Treasury Employees Union, which represents IRS workers, criticized the agency's job shifts.

"They should not be moving these jobs, and I don't think they're going to experience the savings that they think they're going to," said Colleen Kelley, the union's national president. "It will just be a matter of time before they realize they need those jobs back."

The IRS service center in Memphis will take the biggest hit.

The agency will cease tax return processing operations at the Memphis office in October 2005, affecting about 2,200 employees who help process paper returns. Other operations at the center, which employs about 4,800 people, will continue.

The IRS has 115,000 employees.

The number of electronically-filed returns has more than quadrupled in the last decade to 53 million in 2003, according to the IRS.

But Kelley says that's not nearly as high as the agency has previously predicted.

"I think it's premature for them to be shutting down Memphis, or any other place as a paper processing site," said Kelley.

The IRS also plans to consolidate audit processing and collection work being done at 92 different locations to four centers in Memphis, Philadelphia, Cincinnati and Ogden, Utah. The move will create about 350 enforcement positions, the IRS said.

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