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