IRS to Shutter 43 Offices to Cut Costs
by Terri Eyden on
By Ken Berry
The IRS recently announced it will close down forty-three of its offices around the country and will consolidate space in others (IR-2012-54, 5/22/12). But this doesn't mean that the nation's tax collectors are on the verge of going out of business: It's all part of a cost-cutting initiative designed to save taxpayers a boatload of money.
The IRS estimates it will be save $40 million by slashing its total office space by more than one million square feet. These moves will take place over the next two years. Other than payroll, rent and related building costs are the IRS' largest operational expenses, running close to $800 million a year.
"Given today's tight budget environment, we have to be willing to make the tough but responsible calls to save taxpayer dollars," said IRS Commissioner Doug Shulman. "Cutting and consolidating our real estate is a responsible way we can save money. It's an important addition to our growing portfolio of cost-saving measures."
The main elements of the cost-cutting measure are as follows:
- Close forty-three small offices. These are offices without taxpayer assistance centers and currently have fewer than twenty-five employees.
- Consolidate multiple offices within the same commuting area.
- Cut space by 715,000 square feet in fiscal 2012 and 230,000 square feet in fiscal 2013. This is on top of a 105,000-square-foot reduction in fiscal 2011.
- Explore innovative ways to do more with existing space, such as desk sharing and increased telecommuting.
The IRS hasn't issued the list of offices to be closed yet, but it notes that none of the offices are walk-in taxpayer assistance centers. Thus, it doesn't anticipate that the space-reduction measures will have much direct impact on taxpayers. But it remains to be seen how the changes will play out for tax practitioners.
IRS representatives in the offices being shut down will be reassigned to nearby facilities or allowed to telecommute. No IRS employees will be losing their jobs as a result of the space reduction.
Currently, the IRS is operating more than 650 offices around the country. The latest initiative supplements space-saving projects over the past seven years that have already yielded $70 million annually in rental savings. It's part of a broader effort by the Obama administration to cut government real estate costs by more than $1.5 billion. The IRS also said that it's on track to exceed the president's directive to save $3 billion by the end of 2012.
- Taxpayer Advocate: Cuts to IRS Would Hinder Tax Collection Efforts
- IRS Discourages Tax Return Drop-offs at Taxpayer Assistance Centers
You may like these other stories...
Starting in January 2015, the IRS will limit the number of refunds that are electronically deposited into a single financial account or pre-paid debit card to three, as part of the agency’s effort to crack down on...
House proposes $10.5B, eight-month highway billThe House Ways and Means Committee proposed a transportation funding bill on Tuesday that calls for a temporary extension of current transportation funding levels until May 31,...
Swiss banks threaten freeze on US accounts over tax evasionJames Shotter of the Financial Times reported on Monday that several Swiss banks have threatened to freeze American clients’ accounts unless they prove they...
Upcoming CPE Webinars
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
FRF for SMEs Series--Statement of Cash Flows, Subsequent Events, Related Party Issues, Accounting for Investments including Consolidations, Part 4A
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.