Starting Oct. 1, the agency's old standard of dividing the nation's taxpayers by geographic boundaries will be replaced with a new system built around specific groups of taxpayers with common needs.

The new structure will reduce the number of management layers and points of entry for taxpayers, the IRS said. Instead of 33 Districts and ten Service Centers, there will now be four operating divisions. The four new divisions which form the backbone of the new IRS are: Wage and Investment, which serves individual taxpayers; Small Business/Self-Employed; Large and Mid-Size Business; and Tax-Exempt/Government Entities.

According to the agency, some changes will emerge during the 2001 filing season. Individual taxpayers in 12 states will send their tax returns to a new address next year. The new addresses will be printed on envelopes in tax packages, listed in the instructions for tax returns and contained in software used to prepare electronic returns. Down the road, taxpayers will see even more changes.

According to the IRS, it relied on more than 1,600 employees to redesign and realign the agency. In addition, the IRS worked closely with the National Treasury Employees Union, tax practitioners, other external stakeholders and outside groups to build the new structure.

-- SmartPros News Staff

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