Saying more taxpayers are using better, more cost-effective ways to get tax help, the IRS has announced it will close 68 of its 400 nationwide walk-in Taxpayer Assistance Centers (TAC) in the fall of 2005. IRS officials say the closures represent the agency's continuing efforts to create efficiencies, modernize operations and reduce costs while maintaining its commitment to taxpayer service.
The closures, say the IRS, reflect a growing tendency by taxpayers to rely on the Agency's online tax services like IRS.gov and e-filing. In a press release, the IRS noted that face-to-face interactions with taxpayers are declining. This year, for example, the majority of tax returns were filed electronically, marking the first time in history that e-filing outpaced paper returns.
Weve made significant improvements in service in recent years. The walk-in sites are our most costly service vehicle, and we find taxpayers prefer to use our toll-free phone lines where their questions can be routed to subject matter experts, said IRS Commissioner Mark W. Everson in a press release. Like most other federal agencies, were being asked to create efficiencies and be responsible with taxpayers dollars. Using objective criteria, were creating these efficiencies where theyll have the least impact on good service.
In recent testimony assessing the IRS FY 2006 budget request, the Government Accountability Office stated: In light of the current budget environment and IRSs improvements in taxpayer service over the last several years, this is an opportune time to reconsider the menu of services it provides. Further, in its testimony dated May 19, 2005, GAO credited IRS for identifying savings, including closing walk-in offices, noting that demand for walk-in services has continued to decrease. They also recognized that savings could be used to help maintain the quality of other services.
IRS figures show that key taxpayer services cost far more when provided at the walk-in centers than when provided electronically. For example, downloading tax forms from the IRS website costs less than one dollar, while distributing a form at a TAC costs $9. Tax law questions can also be answered much less expensively ($11) and with more accuracy and a higher customer satisfaction rate through the toll-free phone lines than at a TAC ($22).
Face-to-face contact is the most expensive method of customer service, and the number of visitors to TACs has dropped as use of the IRS web site has dramatically increased. In Fiscal Year 2004, visitors to TACs were down 1.26 million from the prior year, and down nearly 2 million from Fiscal Year 2002. At the same time, the number of visits to IRS.gov and the number of web page views climbed 128 percent and 155 percent, respectively, between fiscal 2002 and 2004.
The use of Wheres My Refund, an on-line service that provides refund status information formerly available only by calling the toll-free line or visiting a TAC, was up 1,316 percent from FY 2002 to FY 2004. Internet based services such as Wheres My Refund enable taxpayers to get answers without going to an IRS office.
The continued growth of e-filing also is a factor, with 66.5 million tax returns e-filed this year. There are fewer taxpayer errors with electronic filing, which means fewer calls and visits to the IRS following up on tax return issues.
The IRS based its decision of which TACs to close on five criteria, including workload considerations, geographic factors, demographics, employee costs and facility costs.
About 450 IRS employees nationwide will be effected by the TAC closures. The IRS expects to be able to help most of the displaced employees find other jobs within the IRS or other Treasury Bureaus.