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IRS Cancels Plan to Close Austin, Texas, Processing Center

Posted on Feb. 18, 2022

The IRS, faced with an epic backlog of unprocessed paper returns and other submissions, has announced that its Austin, Texas, processing center will remain open, reversing prior plans to consolidate all paper processing to two sites nationwide.

The agency will also be adding a second “surge team,” in addition to the 1,200 employees recently announced by IRS Commissioner Charles Rettig, to provide assistance with the inventory challenges, National Taxpayer Advocate Erin Collins said at a February 17 Senate Finance Committee hearing.

In its February 17 announcement, the IRS noted that its 2016 consolidation plan called for the closure of three of the five paper submission processing facilities then in operation. Two of those, located in Kentucky and California, were closed in 2019 and 2021, respectively; the center in Austin was slated for closure in 2024. That would have left in operation just the sites in Kansas City, Missouri, and Ogden, Utah.

Lawmakers and the National Treasury Employees Union had called on the IRS to reverse course on the planned closure of the Austin center. The Treasury Inspector General for Tax Administration had also advised keeping that location open.

Earlier in the day February 17, a letter signed by more than 20 lawmakers, including House Ways and Means Oversight Subcommittee Chair Bill Pascrell Jr., D-N.J., and Senate Finance Committee Chair Ron Wyden, D-Ore., asked the IRS to “announce that it is no longer considering closing the Austin Tax Processing Center until the current processing issues are addressed, as TIGTA has recommended.”

‘A Helpful Start’

Pascrell praised the IRS for acting “expeditiously” to cancel the planned Austin closure. “The IRS is already racked by delays, and this closure would have added further dysfunction and chaos for millions of taxpayers,” he said. “The IRS must do all it can to make the process better. This is a helpful start.”

NTEU President Tony Reardon welcomed the IRS announcement as a recognition “that those employees in Austin are essential to the agency’s ability to dig out from the backlog of returns and correspondence.” He expressed hope that the action would be followed by further action to “alleviate the backlog and improve customer service.”

Retaining the processing capabilities of the Texas facility will affect not only the estimated backlog of 17.6 million unprocessed paper returns but also the nearly 8 million items of correspondence and other filings that must be filed in paper form. Those submissions include requests for filing extensions and applications for individual taxpayer identification numbers.

Extension requests by fiscal-year taxpayers must be filed on paper, so those taxpayers don’t have the option to avoid paper filing and processing. ITINs are necessary for taxpayers without Social Security numbers to pay their taxes and to receive child tax credits for their eligible children, and ITIN applications are currently processed only at the Austin facility.

Benjamin Guggenheim contributed to this article.

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