Employees at the Internal Revenue Service’s massive tax-return processing center in southeast Fresno were notified Wednesday that the IRS will discontinue its return-processing operations there following the 2021 tax-filing season.
Workers at the center on Butler Avenue learned of the decision in an email from IRS Commissioner John Koskinen.
The IRS said around 3,000 center employees will lose their jobs. The IRS will work to reassign some of those willing to move to one of the nation’s two surviving processing centers. It did not say when the first round of layoffs would take place.
The layoffs will not affect its other 2,700 Fresno-area employees, the IRS said. Many of those people work in the IRS service center in downtown Fresno.
The Fresno center opened in 1972. It occupies 528,000 square feet. The IRS signed a 10-year lease for the complex in 2012.
The growing popularity of electronic tax filing was cited by Koskinen as one reason for the IRS to continue consolidating its tax-processing operations. In addition to the Fresno site, the IRS is planning to cease processing tax returns at two other centers in the coming years: in Covington, Ky., in 2019, and in Austin, Texas, in 2024. The five-year savings from these closures will be around $266 million.
There are some realities we are facing nationwide, and it’s probably pretty difficult to justify keeping the positions.
Fresno Mayor Ashley Swearengin
The remaining IRS centers will be in Ogden, Utah, and Kansas City, Mo.
Fresno Mayor Ashley Swearengin said she believes her administration has made the inroads necessary to bring in jobs to counter the upcoming losses.
“Fresno is on the radar for companies needing a West Coast presence,” she said. “We have repaired our brand. I think we’re going to start seeing some wins in Fresno.”
Swearengin said she will contact Rep. Jim Costa, the Fresno Democrat, but she believes the layoffs are likely to stick given the rise in electronic filings.
“I am not afraid of a good fight or a stiff challenge, but in this situation, it’s hard to imagine that there’s going to be a path to keep jobs in Fresno that are literally going away,” Swearengin said. “There are some realities we are facing nationwide, and it’s probably pretty difficult to justify keeping the positions.”
Swearengin added that she was grateful for the five-year notice and the retention of 2,700 employees.
Costa released a statement via email: “My first priority is to ensure a fair outcome for my constituents who will be affected and make certain that the loyal hard working employees at the IRS are treated properly during this consolidation process. The IRS and National Treasury Employees Union must handle the consolidation appropriately.”
The layoffs are a proactive response to a continuing state trend, the IRS said. In the last five years, Koskinen said, California has lost 3,700 IRS positions. He also noted budget cuts to the IRS as a reason for the consolidation.
“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,” Koskinen said in his message to employees. Those factors, he added, included impact on employees, cost savings, leases and building conditions.
We plan to remain a major employer in the Fresno area through 2021 and beyond.
IRS Commissioner John Koskinen
The commissioner said the agency will only be hiring temporary employees on an as-needed basis in Fresno starting this fall.
“Throughout this process, a major concern of ours has been the effect on employees in Fresno,” Koskinen said. “I want you to know 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.”
Koskinen added that more than half of the IRS workforce in Fresno works in other parts of the operation besides processing tax returns.
“I want to assure you that we plan to remain in Fresno, and at this time we don’t anticipate any other major operational closures in the area,” Koskinen said. “We plan to remain a major employer in the Fresno area through 2021 and beyond.”
Fresno Chamber of Commerce CEO Nathan Ahle called the news unfortunate and said the chamber will try to work with other local employers to connect them with those let go from the IRS.
The National Treasury Employees Union, which represents IRS and various other federal workers, released a statement saying it would “aggressively pursue all available measures to avoid or mitigate the impact of these closings.” The union said it was not notified of the closure and has requested a detailed briefing from the IRS on how the phasing out will work.
Timeline: IRS Fresno data center
June 1969: President Richard Nixon OKs Fresno as the location of the IRS Western data center. Selma, west Fresno and Los Banos made plays to locate the center in their communities. They lost.
Oct. 5, 1970: After Fresno annexed the Butler and Willow avenues site to the city, and following legal challenges by some residents, work begins on construction of the 522,837-square-foot center.
October 1971: The first Internal Revenue Service employees move into the Fresno center.
January 1972: Workers begin processing their first tax returns. The trickle grows to a flood by the April 15 filing deadline.
March-April 1983: Eighteen people are arrested at the center on drug-trafficking charges.
April 15, 1983: Eight social activists are arrested after they block the entrance to the center’s parking area to protest federal expenditures on the military.
April 1991: A group calling itself Up the IRS Inc. claims credit for launching more than a dozen homemade bombs at the Fresno center. Nine of the bombs explode during the lunch hour as some employees head to their cars. Explosions damaged the building’s roof and some cars. The FBI labels the attack “domestic terrorism.”
April 2000: An unknown substance apparently delivered in the mail twice in a week disrupts center operations. One worker is exposed in the initial incident, and more than a dozen are exposed in the second incident, including six taken to two Fresno hospitals for treatment.
December 2003: A six-story IRS building is completed in downtown Fresno.
April 17, 2005: Ten IRS workers are taken to hospitals after an envelope containing a suspicious powdery substance is opened. About 140 other mailroom workers are evacuated for about 90 minutes as a precaution.
Sept. 14, 2016: IRS announces it will phase out tax return processing work in Fresno, Texas and Kentucky, citing the increased use of electronic filing by taxpayers.