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IRS to close operations in California, Kentucky & Texas

The Internal Revenue Service is pushing via its Future State plan a transition to digital tax systems. That's life in the modern world to which all of us, in doing our taxes and other transactions, are adjusting.

Flying-PapersUnless paperwork suddenly becomes this magical (don't hold your breath), electronic tax transactions will continue to advance.

But the down side of moving more tasks online is that current paper-intensive operations -- and the jobs for people who shuffle those actual documents -- are becoming obsolete.

That's the fate awaiting around 7,200 IRS workers.

E-filing advances kill paper jobs: The IRS announced last week that because of the growing trend of electronic tax filing, the agency will by 2024 close paper-return processing operations in California, Kentucky and Texas.

In 2008, around 58 percent of returns were filed electronically. Last year, snail mailing taxpayers fell even further behind electronic filers, who accounted for 85 percent of 1040s the IRS received.

The shutdowns will start in 2019 at the Covington, Kentucky, facility, where 1,800 jobs will be eliminated.

In 2021, another 3,000 IRS workers at the IRS' Fresno, California, campus will no longer be dealing with paper 1040s.

The paper-only ops will stop in 2024 here in Austin, Texas, meaning that around 2,400 of my Central Texas neighbors will see their jobs disappear.

In advance memoriam of those lost jobs, the latest By the Numbers figure is 7,200.

Not the first, not the last: Such moves are not unusual, even for the IRS.

Based on budget realities and operational needs, the IRS is always looking for ways to do its job more efficiently. Similar office consolidations took place in 2003, when 10 IRS campuses across the country were merged into five. 

In 2012, the IRS also announced a sweeping office space and rent reduction initiative in which it aimed to close 43 smaller offices and reduce space in many larger facilities to save money.

When this latest round of office closures is completed in eight years, the IRS will be left with just two paper return processing sites: Kansas City, Missouri, and Ogden, Utah.

Not to be the bearer/seer of more IRS employee bad news, but don't be surprised when one of those remaining paper intensive facilities eventually closes, too.

Unhappy IRS union: The one tiny bit of silver lining in this dark electronic tax cloud is that the IRS says it "will work to help as many people as possible to transition into other positions" with the federal tax collector.

But that will mean that folks will have to move. Yes, those relocating folks might be able to take a move-related tax deduction. I suspect, however, that many of them will opt for, if eligible, early retirement.

Such difficult choices that thousands of IRS workers will face are the focus, naturally, of the National Treasury Employees Union (NTEU), which represents those employees.

"This is distressing news for our members, many of whom have been loyal IRS employees for years," NTEU President Tony Reardon said in a written statement, who also lamented that the IRS did not alert or talk with the union before making the closure decision.

"We need a great deal more information to evaluate this plan and its potential impact on employees, taxpayers and these communities," Reardon said. "NTEU will aggressively pursue all available measures to avoid or mitigate the impact of these closings on affected employees in these three locations. Their well-being is our top priority. We want to make sure our members are treated fairly and that all steps are taken to avoid actions that may harm them."

Not a total abandonment: Also, noted IRS Commissioner John Koskinen in a message sent to Austin employees that was reported by the Austin American-Statesman, the agency isn't leaving the Lone Star State capital completely.

"There are also many other employees who work in Austin beyond submission processing; well over half of the IRS workforce there involves work in other organizations," Koskinen said. "I do want to assure you that we plan to remain in Austin, and at this time we don’t anticipate other major operational closures in the area. We plan to remain a major employer in the Austin area through 2024 and beyond."

Similarly, Koskinen told his workers in Fresno and that city's leaders that more than half of the IRS workforce there has duties beyond paper tax return processing.

"I want to assure you that we plan to remain in Fresno, and at this time we don't anticipate any other major operational closures in the area," Koskinen said in a statement reported by the Fresno Bee.

New use for old IRS space: I couldn't find any such IRS employee job duty breakdowns in reports of the Covington, Kentucky, campus closing. But officials in that community just across the Ohio River from Cincinnati are trying to remain positive about the impending IRS personnel losses.

Covington has for decades tried to convince the IRS build a tower at its current location so it would take up less valuable real estate, according to a report at

The IRS office's closure, say city officials, now will open up prime riverfront property along the Licking River, which feeds into the Ohio River, for redevelopment.

And that should produce new, albeit different, jobs, as well as, you got it, new tax revenue for Covington.

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