The effect of the IRS district office reorganization on corporate taxpayers.

• Author: O'Hanlon, George A.

Introduction

Much has been said and written about the Internal Revenue Service reorganization since it was announced in May 1995. In 30 of the current 63 districts, the positions of District Director, Assistant District Director, and Division Chiefs, as well as some Branch Chief positions, will be eliminated. In some districts this has occurred already, but in all of the affected districts it must happen by no later than October 1, 1996. According to the Service, 'these changes are intended to streamline the management and management support of field operations," reduce overhead, and provide the flexibility to make better use of [the IRS'S] resources and to better serve [its] customers and address non-compliance."

It will take initiative and effort on the part of professional organizations such as Tax Executives Institute to create new relationships with the district management in the reconfigured districts after their existing local management-level contacts are gone. Access to the District Director in the new districts may prove to be difficult. Distance and time become obstacles. Professional groups may find it difficult to make their voices heard at the high level within the IRS to which such organizations have become accustomed. It also seems clear that some TEI chapters will no longer align with IRS districts.

The reconfigured districts will, of course, have a District Director, but he or she may be located hundreds of miles farther away from a particular taxpayer than is currently the case. The District Director's attention can become spread thin over many new and, perhaps, unfamiliar problems. For example, the current Milwaukee, Des Moines, and Omaha districts will constitute the new Midwest District. The District Director will be located in Milwaukee, which is almost 400 miles from Des Moines and more than 500 miles from Omaha. Similarly, the St. Paul, Fargo (North Dakota), and Aberdeen (South Dakota) districts will be combined to form the North Central District, with its headquarters in St. Paul. The most glaring example is the new Rocky Mountain District, headquartered in Denver, which will encompass, in addition to the Denver District, the present-day Boise, Helena, Salt Lake City, and Cheyenne districts.

The Roles of TEI and its Members

District Directors are continuously striving to improve communications and relationships between the IRS and tax professionals. With many districts doubling or even tripling in size, however...