In Covington, Ky., a small city of 40,000 just outside Cincinnati, times could be better. Median household income is just around $35,000. Twenty percent of the population doesn’t have health care. And twenty-five percent of residents live in poverty.
But Covington has at least one reliable industry: processing tax returns filed by individuals and businesses by paper. At an Internal Revenue Service facility there, 1,800 employees, including 700 seasonal workers, deal with the glut of dead trees the agency receives daily. They sort mail. They hunt for checks. They send incorrectly completed Affordable Care Act forms back to taxpayers. And they put the analog data they get into computers.
Until now. The Internal Revenue Service said it will eliminate more than 7,000 jobs related to the processing of paper tax returns by 2024 in a move that will reduce its workforce by more than 8 percent — and Covington is the first in the firing line.
Citing the growth of electronic tax return filing, the 84,000-person agency will eliminate the jobs in what it refers to as “submission processing” in Austin, Fresno, Calif., and Covington.
By 2019, 1,800 of 4,100 jobs in the Cincinnati region will be eliminated in Covington. By 2021, 3,000 jobs will be eliminated in Fresno. And by 2024, 2,400 jobs will be eliminated in Austin.
The IRS will consolidate submission processing work in Kansas City and Ogden, Utah, it said, saving $266 million by 2029.
The agency, which employs other workers in the affected areas, said it will not be folding up shop entirely, and that “submission processing employees have been able to transition into other positions” in the past.
“The IRS emphasizes that submission processing is only part of our wider operations in these three locations, and the IRS will continue to be a major employer in these areas due to work for other parts of the agency,” the IRS said in a statement.
People in Covington, however, remain skeptical and confused about how their jobs are to be saved.
“They aren’t telling us anything,” said Ricky Riley, president of the Covington chapter of the National Treasury Employees Union (NTEU). “When they announced this… we had people in the hallways crying.”
Riley said that it wasn’t just IRS employees that would be affected. Contractors at the facility — everyone from IT guys to the “lawn guys” face an uncertain future. And Covington isn’t a boomtown.
“There’s just no jobs there,” Riley said.
Jason Sisk, president of the Fresno chapter of the NTEU, said the IRS employees in his area were looking for more to do, not less.
“This is a big impact to us here,” he said. “A lot of [workers] are seasonal and are folks are willing to work year round.”
The IRS statement offered statistics sobering to anyone who makes their living processing paper tax returns. The majority of taxpayers file electronically: e-filing rose from 58 percent in 2008 to 86 percent in 2015, the statement said.
In addition, the IRS budget has shrunk $900 million since 2010, and the agency lost 17,000 jobs in that same period.
The NTEU’s national branch, which represents about 70,000 IRS workers around the country, also said it was not consulted before the reductions were announced earlier this month, and criticized the move.
“This is distressing news for our members, many of whom have been loyal IRS employees for years,” the NTEU said in a statement. “… Their well-being is our top priority.”
Tony Reardon, the president of the NTEU, said it was difficult for the union to prepare for the announced cuts because they had no idea they were coming.
“They did not talk to us,” he said. “That makes it all the more tough for us to handle.”