Written by The Business Journal Staff
The IRS announced plans Wednesday to consolidate tax return processing operations, with Fresno being one of three facilities affected nationwide.
Fresno’s tax return processing operations will be phased out by 2021. Operations in Kentucky and Texas will also be eliminated by 2019 and 2024, respectively.
In Kentucky, 1,800 employees will be affected by the decision, according to published reports.
According to an IRS statement published by television station WLWT in Ohio, the growth of electronic tax filing was a major factor in the consolidation effort, which actually began in 2003.
The percentage of individual tax returns filed electronically grew from 58 percent in 2008 to 86 percent in 2015, representing 128 million 1040 forms. The IRS anticipates the trend away from paper filing to continue.
“By planning ahead, the IRS can minimize employee impact. In the past closures, many of the submission processing employees have been able to transition into other positions at the IRS,” according to the statement.
As part of the plan, the agency will be hiring temporary rather than permanent employees for processing operations in Fresno beginning with the 2017 filing season.
At the end of this process in 2024, the IRS anticipates maintaining two submission processing locations. The Kansas City site will focus on individual tax returns, and the Ogden, Utah, location will focus on business tax returns.
The IRS projects the five-year cost savings from consolidating the three sites will be about $266 million, including factors such as real-estate and rent savings. Annual savings in subsequent years are projected to top $53 million.