The Internal Revenue Service (IRS) adopted the practice of the Tennessee Valley Authority’s (TVA) best practice 03-PRA-018, Strategic Facility Plan, in developing its Comprehensive Real Estate Master Program (CREMP). The IRS modernization, both in business and facilities, became a priority with the Congressional passage of the IRS Restructuring and Reform Act of 1998. The ten IRS campuses, which occupy approximately 10 million square feet in over 80 buildings across the country, form the backbone of the nation’s tax processing infrastructure. An extensive analysis of the existing campus portfolio underscored how critical upgrades were needed to revamp and realign the agency’s real estate portfolio with its new business vision.
Published in 2003, CREMP provides a new, holistic approach to the entire campus planning process. It captures the assessments and recommendations of a comprehensive, collaborative study undertaken by the IRS and the General Services Administration (GSA). The key features of CREMP include:
- Accommodating the impact of electronic filing, projected to account for 80 percent of all individual tax returns filed in 2017
- Integrating the business vision of making each campus a Center of Expertise to increase IRS customer service capabilities
- Translating gains from new IRS operational realignments into optimized space requirements
- Improving the workplace environment by using space and modern technology more effectively, and creating a safe work environment for IRS employees
CREMP addresses the transformation in operational requirements of IRS business units that have led to dramatic changes in the quantity and nature of space requirements at the campuses. These include:
- A reduction in total portfolio space requirements by 16 percent over 15 years. The reduction in space requirements from 9.7 million rentable square feet (RSF) to 8.1 million RSF will be achieved despite a projected growth in returns filed. A potential savings of up to $40 million is expected in rent over 15 years.
- A substantial decrease in paper-based tax processing space requirements due to the penetration of electronic filing of tax returns, and an increase in customer-service oriented office space.
- The reduction or “right-sizing” of support and ancillary spaces translating into substantial rent savings.
- Consolidation and co-location of campus functions, leading to increased operational efficiency and productivity.
- Resource optimization by focusing on the long-term cost benefits of renovation versus replacement.
CREMP recommends the renovation, upgrade, or replacement strategies for the ten campuses to support the IRS’s long-term modernization initiatives and also provides strategies for optimizing interim decisions regarding the campus portfolio:
- Renovation/Upgrade Campuses: Five campuses are to be renovated and upgraded where the main buildings are in workable condition, and their current sites allow for facility consolidation and programmed growth. Significant upgrades for building equipment systems, new electronic applications, and on-site expansion will be carried out at these campuses.
- Replacement Campuses: Five campuses are to be replaced by new, consolidated state-of-the-art facilities. Economic analysis substantiates the benefit of replacing these campuses since the recurring costs associated with continuing to operate them in their current state will cost the government more over time.
The total cost for IRS Campus Modernization is $2.32 billion, which will be distributed over a 10-15 year period to ease the allocation of capital funding, and to minimize the disruption in tax-collection during implementation. CREMP empowers IRS with a pro-active, long-range facilities planning practice that makes real estate an integral part of the agency’s business planning strategy, enabling IRS to complete its business system modernization and the reinvention of the American tax service.
For more information, contact Mr. Rob Hewell at (215) 446-4640 or via e-mail at rob.hewell@gsa.gov
