NTEU has been involved in many discussions with IRS with regard to reorganization efforts we were taken completely by surprise by IRS's proposal in May of 1996 to RIF field personnel.

In fact, NTEU was relying on the same information that IRS sent to Members of Congress in May of 1995, (See attachment 4.) in which IRS states: "As of October 1, 1995, the IRS will streamline the management of its field operations to reduce executive, managerial, and some management support positions in regional and This reduction will be accomplished through

district offices.

attrition or by redirecting staff to front-line operations.

Our

problem Resolution Officers, with whom your local office staff

interact, will remain in their current locations to assure that

taxpayers continue to receive expeditious treatment in instances District office personnel will

where problems are encountered.

continue to perform their full range of activities."

As to NTEU's ability to negotiate the terms of a reorganization or RIF, no one knows better than the Members of this Committee, that federal labor unions are limited to negotiating the "impact and implementation"

of

management

decisions.

In a

reorganization or RIF we are extremely limited in what we can

negotiate. For example, we cannot negotiate the number or timing of RIF's, who will be RIF'ed, or whether other alternatives to

RIF's exist. So, to say that NTEU will have its say on this reorganization at the bargaining table is very misleading.

Mr. Chairman, I would like to thank you again for inviting me here today and also to thank you and Senator Glenn and the other Members of the Committee for the good work you do on behalf of federal employees. I would be happy to answer any questions.

Benefits and Costs

ATTACHMENT 1

Benefits accrue from closing 3 regional offices, consolidating 63 district headquarters offices into 33, consolidating 80 administrative support offices into 24, and eliminating staff overhead positions in the National Office.

The IRS, through its restructuring and overhead reduction efforts, will eliminate a
net of more than 1000 field office positions without decreasing customer service or
reducing enforcement and compliance programs. (Total field positions eliminated
are 2490, critical vacancies to fill in new locations are 1480.)

By consolidating offices and operations, the redundant infrastructure costs such as
space, telecommunications, toll-free call distributing systems and management
. overhead are reduced or avoided altogether.

In the National Office, the IRS will eliminate 800 non-Information Systems staff
positions, and an estimated 1500 Information Systems. (The actual Information
Systems reductions are dependent on the outcome of the FY 1997 Budget.)

Salary Savings from Reduction-in-Force

Budget Costs and Savings From Eliminating Positions and Filling Needs

ATTACHMENT 2

NTEU used the numbers supplied by IRS and broke them out into Field and Headquarter components.

*1. The costs include severance pay, lump sum leave, unemployment
and outplacement services. The $35.6M and $8.2 M are based
on $19,060 for each of the 2,300 positions eliminated in Headquarters.

*2. The savings are based on an average cost of $69,608 per
position for Headquarters employees.

*3. The "cost of filling needs is -0- because, unlike the field,
IRS will not be filling vacant positions.

ATTACHMENT 3

NTEU used the numbers supplied by IRS and broke them out into Field and Headquarter components.

*1. The costs include severance pay, lump sum leave, unemployment
and outplacement services. The $38.6M and $8.9M are based on
$19,060 for each of the 2,490 positions eliminated in the field.

*2. Since the vast majority of the new positions to be filled are
equivalent to those being RIF'd, the "savings" are calculated
at $38,108 which is based on the equivalent FTE cost used
by IRS as a "cost of filling needs."

*3. Cost identified by the IRS which equals $38,108 for each of
the 1,490 positions to be filled.