ANDOVER - Nearly 2,000 people - most of whom handle paper tax returns - will lose jobs at the Internal Revenue Service Center by 2009 as the federal agency streamlines its operations due to a sharp increase in the electronic filing of tax returns.
The people most affected by the changes are seasonal employees who work at the agency's Andover tax return center during the busiest time of year, roughly January to June.
These workers make anywhere from $10 to $14 an hour, depending on their employment level, said IRS spokeswoman Peggy Riley, and some of them work during tax season year after year.
Ron Carbonneau, vice president of the union that represents 4,000 workers at the Andover, Fitchburg, Lowell and Methuen IRS offices, said a drive to centralize IRS functions is what's causing most of the job cuts.
For years, the IRS collected paper returns in 10 facilities across the country, Riley said. Now, just seven locations are used, including the one in Andover. The IRS has decided to consolidate paper return collections even further, to just three cities: Fresno, Calif.; Austin, Texas; and Kansas City, Mo.
Riley said that nationally, paper filings have dropped from nearly 80 million in 2003 to about 60 million last year. Meanwhile, electronic returns have jumped from 52 million in 2003 to more than 72 million last year. That upward trend for so-called e-filers is expected to continue this year.
Carbonneau said IRS leaders are making unnecessary, and unwise, cuts in staffing.
"The way the IRS is doing this makes no sense," he said. "They are taking jobs away from Andover, where they have experienced people who have dedicated their working lives to the IRS, and will hire people off the streets" in the other three cities to do the same work.
Meanwhile, another change is taking place at the IRS that will affect workers across the country as well as those in the Merrimack Valley: A private company, IAP Worldwide Services, is taking over filing work done by agency employees. IAP bid against the union for the right to do the work and won the $103 million contract in 2005.
The transition to a private company could mean the loss of about 85 jobs in the agency's Methuen warehouse, where tax returns are filed and stored for several years. IAP will begin working in Methuen this August.
In a statement, IAP said it is trying to offer jobs to existing IRS employees.
"IAP is working diligently to make sure that all eligible incumbent IRS employees who apply, satisfy mandatory IAP employment requirements and meet IRS security clearance requirements are able to continue to work at this facility once IAP assumes responsibility for files management," said the statement.
Carbonneau said he is skeptical. He noted that when private contractors take over government functions, they give current employees the right of first refusal for jobs, "but they can get around it by saying they have their own employees."
He also criticized the effort to privatize federal jobs and the amount of time it has taken to implement the change.
IAP was supposed to take over the filing work last June, he said, but has requested a series of extensions because the company has been unable to hire the staff it needs nationwide to undertake the effort.
"It is ridiculous to allow these contractors to bid and win these contracts but then not hold them accountable" to any deadlines, he said.
Further, he said he is concerned that employees working for a private company will have access to the nation's tax records.
"They are putting tax returns and return information in the hands of nonfederal employees, who will not be held to the same standards of disclosure as federal employees," he said.
Riley said the move to IAP is the result of changes in federal law to encourage privatization. "A lot of processes in government are being contracted out," she said. "This is part of that."
Jobs will also be lost in Fitchburg ,where 350 to 400 are employed at an IRS facility due to be closed.
Riley said that while the paper return processing is moving away and the filing is being taken over by IAP, the agency's other functions will continue. For example, the criminal and examinations departments located in the Methuen warehouse on Milk Street will remain there.
Other functions at the Andover facility will also remain, including accounts management and compliance services.
About 5,000 people work in the Andover facility, and some 4,000 of them are unionized, Carbonneau said.
TAB CHARTS:
Paper or electronic?
More people are sending in electronic tax returns every year.
Nationwide
Year Paper E-File
2003 77,783,598 52,944,762
2004 69,794,862 61,506,835
2005 63,811,990 68,463,840
2006 61,147,562 72,769,506
as of 3/30/07 23,806,000 56,994,000
Massachusetts
Year Paper E-File
2003 1,996,263 1,081,239
2004 1,845,342 1,202,455
2005 1,520,810 1,539,780
2006 1,367,148 1,695,306
as of 3/30/07 575,391 1,205,822
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