After attending the June 2, 2011 IRS Practitioner Liaison meeting, I toured the IRS Kansas City Campus (formerly “Service Center”), which is not generally accessible to the public. It was late in the season so that processing activity was only a portion of its peak, but it was still interesting to see the effort required to process each individual return out of the huge volume of returns.
The KC Campus is one of ten IRS campuses (soon nine with the Atlanta Campus closing), and one of five campuses processing returns. Campus activity includes return processing, audit, collection, criminal investigation, a Taxpayer Advocate’s office, and administration. Campus audits are generally limited to returns with only a few issues susceptible to being resolved through correspondence, with taxpayers answering questions or providing a limited amount of paper substantiation. More complex or document intensive audits are conducted in the field at local IRS offices.
Because the KC Campus is a federal facility and also deals with money and confidential returns, it is a “level 4” secured facility. The former drive up to the Post Office front door is fenced off and has barriers to provide a 50 foot vehicle setback, and entry to the facility is strictly controlled. I was issued a “guest” badge, scanned, logged in by security guards, passed through a security portal by an employee with a security device, and always escorted everywhere throughout the Campus by an IRS employee. There are also safety procedures in place to protect from terrorist actions.
The current KC Campus consolidated the previous eight separate facilities in the Kansas City area of Missouri and Kansas, and resulted with the cooperation of private developers, and the Kansas City, federal, and two state governments. The Campus is located in a $330MM Leed certified facility sited on 27 acres in the downtown Kansas City, Missouri area and was occupied by the IRS starting in 2006. It incorporates 400,000 square feet from the historic US Post Office, built in 1933, plus a recent 700,000 square foot addition. By the time planning for the project was first started, the post office had almost entirely moved out and there were only 100 post office employees occupying the immense facility.
The project included some historic preservation. The Post Office exterior, ornate marble lobby and staircase, lobby items including ornate brass post office boxes and brass tables moved many years ago from a bank and ornate ceiling, and sixth floor halls and offices, were maintained in their historic condition with decor dating to the early 1930’s. The sixth floor office suites include original terrazzo floors, ornate ceiling plasterwork, marble wainscot and molding in the halls, and original cherry paneled walls and safe in the very large Post Master’s office, which now used as a conference room. Historic preservation restrictions are strict, e.g., brass cannot be polished and shined with Brasso, and can only be cleaned by soap and water. Federal office restrictions also limited the facility design and infill in the sixth floor, e.g., the maximum size permitted for senior manager’s offices is 250 square feet.
The facility is like a small city, with approximately 2,600
permanent and 4,000 seasonal employees, and includes a cafeteria, coffee
cart and the sundry store, Credit union, career resource center,
outdoor walking trail, health unit, and fitness center, as well as free
parking for all employees. The workforce is eclectic with generally
flexible working conditions. Dress code is relaxed and hours can be
flexible within job requirements, e.g., some positions have two shifts
to be worked around or require availability to “customers” (as the IRS
refers to taxpayers) during set hours such as telephone assistance.
The IRS is progressing to electronic return filing and away from paper filing, which makes the process more efficient and reduces processing errors. There were still 9.3MM paper returns out of the 50.5MM total returns processed at the KC Campus through early May 2011 for the 2010 return filing season, with 41.2MM electronic returns processed. That is slightly more than one-third of the total 134.4MM returns processed by all IRS service centers during that same period.
Return processing starts with post office trucks delivering paper returns to the loading dock. Then three “SCAMPS” machines each opens 30,000 envelopes per hour by sanding off one envelop edge (avoiding damage to contents). Returns move out of the separate receiving area to a series of very large rooms for actual processing. Individual workers who sit at numerous rows of “Tingle” tables (named after the inventor) remove the envelope contents, “candle” the envelope by passing it over a lighted panel inset in the desktop surface to ensure all pages are removed and the envelope is empty. Envelopes for returns filed early in the season are not saved with the return because filing date is not an issue, but the empty envelopes are sent to another area to be candled again to ensure all contents have been removed. Envelopes for returns filed near or after the due date are kept with the returns in case proof of mailing date later becomes an issue.
Checks are separated from the return and sent to the payment
processing group. If a payment voucher is attached, processing payment
to the correct account is eased. Otherwise, research may be required to
determine what account (taxpayer and year) payment should be credited
to. This can be complicated when the taxpayer identification number
(“TIN”), return form (e.g., 1040) and tax year are not written on the
check memo line, and even more so if the check is from a “third party”
Workers sort the remaining envelope contents (the return) into one of a series of trays on several shelves above their desk. Other workers roll carts down aisles between the back sides of two adjacent rows of Tingle tables to collect the sorted items for the next processing step. The sorted returns are queued on rows of carts waiting for the next set of employees to review the returns for errors. Some errors can easily be corrected and the returns moved on, and others require the returns to be held for more research or communication with taxpayer, e.g., to obtain a missing signature.
Once corrected, other employees check and mark specific line items on returns for data entry into IRS computers by another set of employees. The next group of employees hand stamps a document locater ID on every page of each return (no reliable machine has been invented to do this job). All staples and paper clips are removed, the returns are scanned to electronic image files, and then put in another queue to be sent to central storage where they remain for at least a year. It should now be apparent how electronic filing streamlines return processing.
The IRS has an on-line video of its return processing operations.