IRS to Close Fresno Submission Processing Office, Koskinen Says

As you may know, we have been working to use our limited resources as efficiently as possible through such things as real-estate consolidation. For more than a decade, we've been working on consolidating our Submission Processing operations across the country as electronic filing continues to grow and fewer taxpayers file paper tax returns. These consolidation efforts began in 2003, leading to merging 10 processing sites into five locations.

The next step of the process involves Fresno as well as other Submission Processing sites. After a thorough review covering factors ranging from employee impact, cost savings, leases and building condition, the IRS has decided to end submission processing operations in Covington, Kentucky., after the 2019 filing season, and Fresno will follow after the 2021 filing season. To minimize the effect on employees, we will only be hiring temporary and term employees, as needed, in Fresno starting this fall to help with submission processing for the upcoming filing seasons. In addition, our review has led us to also end Submission Processing operations in Austin in 2024.

This was not an easy decision by any means, but the continuing workload changes with increased electronic filing and declining paper returns made this the appropriate choice along with other factors we assessed.

Throughout this process, a major concern of ours has been the effect on employees in Fresno. We will be working closely with NTEU as we begin to look at specific details on this, but I want you to know that we plan to do everything we can to minimize the effect on employees, and we will work to help as many people as possible to transition into other positions at the IRS. More details on this will be available in the months ahead, but I wanted to share this information with you as early as possible in the process.

There are also other employees who work in Fresno beyond Submission Processing -- nearly half of the IRS workforce there involves work in other organizations. I want to assure you that we plan to remain in Fresno, and at this time we don't anticipate other major operational closures in the area. We plan to remain a major employer in the Fresno area through 2021 and beyond.

Although today's announcement is focused on making changes to improve efficiency, I will note that I remain concerned about long-term budget challenges facing the IRS. We continue to take prudent steps to use our resources wisely and efficiently, and these long-term changes in Submission Processing will ultimately help us meet other unmet needs in taxpayer service, tax enforcement and information technology.

As part of this, I want to emphasize the continuing need the leadership team sees in our Future State efforts to have more employees serving taxpayers and the nation -- not fewer. The challenge here is that the IRS continues to face smaller budgets, with the budget decreasing $900 million since 2010, which has led to the IRS workforce already being reduced by 17,000 positions. Between 2011 and 2016, we've lost 3,700 employees across the state of California. These budget reductions continue to be a major challenge throughout the country for the IRS, and they remain a concern going forward.

I realize there will be many questions about the changes announced today, and we will share more information as it becomes available. Thank you again for your work on behalf of the nation's taxpayers.