IRS' Field Office Restructuring in Ohio

GGD-97-125R: Published: Jul 3, 1997. Publicly Released: Jul 3, 1997.

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Pursuant to a congressional request, GAO provided information on the Internal Revenue Service's (IRS) most recent field office restructuring effort, especially as it relates to Ohio, focusing on: (1) how IRS' field office restructuring plans affect Ohio; (2) some of the operational impacts in Ohio as IRS transitions to its new structure and whether they are likely to continue after the consolidation is complete; and (3) what savings, if any, IRS will achieve from its field office restructuring.

GAO noted that: (1) as a result of field office restructuring, Ohio is expected to lose 98 positions-the net of 154 positions to be eliminated (all of which are to be in Cleveland) and 56 positions to be added (all but one of which is to be in Cincinnati); (2) the district office consolidation accounts for most of the positions that are to be eliminated in Ohio; (3) as a result of that consolidation, Cleveland is to lose 96 positions, most of which are in compliance support functions that are responsible for such tasks as closing examination cases, assessing the quality of audits, and processing liens; (4) Cincinnati is to gain positions so that it can do the work that is to be transferred from Cleveland; (5) according to Ohio District officials, the district was experiencing some backlogs, delays in processing work and increases in inventories, in some compliance support functions; (6) according to Cleveland examination managers, delays were occurring in processing the paperwork to close certain audits; (7) these managers said the backlogs stemmed from a decline in staff productivity resulting from low morale and attrition; (8) Cleveland's collection support manager said that backlogs were occurring in processing the paperwork needed to substantiate that taxpayers had paid assessed taxes so that liens against their assets could be released; (9) some Ohio District officials said that these backlogs could continue or increase if needed positions in Cincinnati are not staffed with trained employees; (10) however, according to district officials, after all the work is transferred to Cincinnati and all needed positions are filled with fully trained staff, backlogs will diminish or disappear; (11) in its March 27, 1997, report to Congress on the restructuring of its field support functions, IRS said that it expects to save $138 million in personnel costs as a result of eliminating 1,059 field office jobs; (12) for the most part, IRS' methodology for computing the savings is consistent with the methodology that GAO has used in computing personnel savings associated with buyouts versus reductions in force; and (13) GAO recognizes that if: (a) the redirection of resources allows IRS to process more frontline work (e.g., examine more tax returns, collect more delinquent taxes, and answer more telephone calls) than is currently the case; and (b) staff in the headquarters of consolidated districts can handle all of the consolidated workload without adversely affecting cycle time or work quality, IRS could achieve some efficiencies from its field office restructuring.

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