IRS Wastes Space and Money, Audit Reveals Inefficiency in Office Use

The IRS is facing criticism for not using its office space efficiently. An audit showed that more than half of its 516 office buildings were operating at less than half capacity. The agency has made some progress in reducing its real estate but needs to work harder to consolidate its office space, according to the inspector general.

The audit also found that the IRS has not effectively implemented workstation sharing for many teleworking employees. The agency could save more than $10 million a year by putting employees into a 2-to-1 workstation sharing system. The inspector general said that the IRS is struggling to match its workforce to its office space, especially as the agency has been on a hiring spree. 


Treasury Secretary Janet Yellen has expressed frustration with the IRS labor union hindering efforts to bring employees back to the office. The IRS, in response to the audit, accepted the recommendations but defended its approach to the matter. The agency’s chief of facilities management said that right-sizing the real estate portfolio is a complex task, especially given the recent increase in hiring and the existence of temporary telework programs.

The IRS expects to spend $600 million this year on real estate and had hoped to cut 329,000 square feet in 2023, but only achieved a net reduction of 116,000 square feet. The agency is still working on a long-term plan to reduce its office space.

The report on the IRS’s office space efficiency comes at a time when federal agencies are under pressure to optimize their office needs. Lawmakers are divided on whether there should be a return to office work after the pandemic or if telework should continue. The audit highlights the challenges the IRS is facing in managing its office space while navigating the demands of a changing workforce and budget constraints.

Written by Staff Reports

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