January 01, 1999
Locations for New IRS Operating Division HQs
The Internal Revenue Service has announced the locations of the headquarters
for its four proposed operating divisions:
Operating Division Headquarters
Location (metropolitan area)
Wage and Investment Income Operating Division Atlanta, GA Small Business &
Self-Employed Operating Division Washington, DC Large & Mid-Size Business Operating
Division Central New Jersey Tax Exempt Operating Division Washington, DC
PURPOSE AND SCOPE
Each of these headquarters offices will have total responsibility for meeting
the needs of a particular group of taxpayers. By specializing on specific taxpayers, each
operating division will be able to develop programs suited to providing top quality
service to those taxpayers. The staff of these four headquarters offices will be
relatively small and will comprise less than 2 percent of the IRS workforce. They will
focus on strategic leadership, monitoring programs, and financial management.
IRS will begin planning the four headquarters offices immediately and will
establish them over the next two years.
- The Tax Exempt Operating Division headquarters and Large & Mid-Size
Business Operating Division headquarters should be set up by the middle of 1999, beginning
with recruitment for the heads of the divisions.
- The Wage and Investment Income Operating Division headquarters and Small
Business & Self-Employed Operating Division headquarters will begin to be set up later
this year or early in 2000.
The four headquarters offices are being formed as part of the overall process
of modernizing the IRS that began in January 1998.
Congress had mandated that the IRS organize in units that will meet the needs
of particular groups of taxpayers. The IRS consulted with a wide range of individuals and
groups to determine how many operating divisions to have and which taxpayers they should
The IRS has conducted a similar analysis to determine the best locations for
the headquarters of the operating divisions.
Modernization of the IRS involves more than a change in organization structure.
It also involves:
- Changing our IRS business practices to meet the needs of specific groups of
- Adopting new technologies that will allow us to give taxpayers the same
service they expect from leading private sector firms.
- Developing balanced measures to assess our performance on how well we serve
taxpayers and how well equipped our employees are to serve taxpayers, as well as on our
- Assigning clear management roles, so taxpayers know who is responsible for
meeting their needs.
The modernization of the IRS is the most far-reaching change in tax
administration in the United States since early in the Eisenhower administration.
THE PLANNED IRS ORGANIZATION
Each operating division will be responsible for planning and managing
nationwide programs that meet the needs of particular groups of taxpayers.
The four operating divisions are:
Wage and Investment Income
Individual taxpayers filing simple 1040, 1040A, and 1040EZ returns. This
operating division will serve approximately 88 million taxpayers.
Small Business & Self-Employed
Taxpayers who also file Schedules C, E, F, or Form 2106; partnerships,
S-corporations, and corporations with assets under $5 million. This operating division
will serve approximately 40 million taxpayers.
Large & Mid-Size Business
Mid-size business are those corporations, S corporations and partnerships with
assets between $5 million and $250 million. Large businesses are those with assets greater
than $250 million. This operating division will serve approximately 170,000 taxpayers.
Includes tax exempt organizations, employee plans, and state and local
governments. This operating division will serve approximately 1.5 million taxpayers.
Assumed in the site selection process is that most IRS activities and most
employees will continue to be located in field offices close to the taxpayers they serve.
The guiding principles used to determine the locations of the four headquarters
sites were as follows:
- Minimize disruption caused by relocation.
- Minimize costs associated with setting up new headquarters.
- Minimize ongoing operating costs of the headquarters.
- Select locations that would be attractive to employees to relocate.
- Select locations that can readily provide an appropriately trained labor pool to staff headquarters activities.
Additional criteria used to evaluate potential headquarters sites were:
- Number of executives and managers in that location.
- Availability of IRS staff with the necessary skills.
- Proximity of customers.
- Proximity to Washington, DC.
- Operating costs of current facilities.
- Cost of relocating employees.
- Cost of setting up and running the headquarters.
APPLICATION OF SELECTION CRITERIA
The sites selected as headquarters cities ranked high on particular selection
Wage and Investment Income Operating Division
- The Atlanta, GA, area ranks high on availability of skills among IRS staff
and attractiveness for IRS employees. The Atlanta area is the current location of the
Customer Service Command Center, a Service Center, a customer service call site, and
current regional and district offices.
Small Business & Self-Employed Operating Division
- The Washington, DC, area ranks high on availability of skills among IRS staff
and number of senior executives and mid-level managers. Washington, DC, is also the
headquarters for many national organizations representing this group of taxpayers.
Large & Mid-Size Business Operating Division
- Central New Jersey currently has the largest concentration of employees with
the skills needed to do this work, due to the large-case work located there. This location
also provides easy access to Washington, DC.
Tax Exempt Operating Division
- The Washington, DC, area ranks highest on availability of skills among IRS
staff. One of the four Employee Plans/Exempt Organizations key districts nationwide is
located within the commuting area.
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