INTERNAL REVENUE SERVICE

Each year the IRS processes approximately 240 million tax returns and collects about $3 trillion. This is a huge amount of money, constituting more than 90 percent of all receipts to the United State. This fact is not lost to IRS employees, who find great satisfaction in knowing that their efforts help keep the country running. At the same time, however, being an IRS employee is difficult, in part, because the public doesn't appreciate the agency's mission. To most people, the IRS is responsible for the cost and hassle of filing and paying taxes, time-consuming audits, and seizures of homes and businesses. In fact, although IRS employees feel their jobs are personally meaningful, they are often unwilling to tell acquaintances who they work for.

There are several reasons why working at the IRS has been made even more difficult over the last several years. First, in an attempt to make the IRS more efficient, the agency was reorganized from a decentralized structure with 33 regions responsible for different functions (collections, customer service, audits, and criminal investigations) to a centralized structure with four national units that serve different customers (individuals, small businesses, large corporations, and nonprofits). This change reduced interaction among team members, and along with it, camaraderie and social support. Second, there have been significant budget cuts, and as consequence, there are fewer employees and resources available to accomplish the work. Employees not only have to perform the responsibilities of multiple jobs, but they also have to spend their own money on basic supplies like pens, paper, and staples. Finally, a number of well-publicized scandals have worsened the public's perception of the agency. You may remember the well-publicized video of IRS executives dressed as Star Trek characters, the new clip of the IRS employees staying in lavish presidential suites at a conference, and the new story of employees being rehired by the agency after they were fired for not paying their taxes. Although these incidents were a function of a few bad apples, they reflected poorly on the agency and were demoralizing to employees.

To make matters worse, there are signs that the agency's effectiveness is declining. For example, only 40 percent of all people who call the IRS for help get through to someone, and in many cases, those who get through are simply told to refer to the IRS website or hire an accountant. The number of criminal investigations and audits is down sharply as well. Although this might sound like a good thing from a taxpayer's perspective, the system depends on voluntary compliance, and if enough people think it's worth the risk not to pay their taxes, a real crisis may unfold. All this is leading to pressure on the government to make significant changes to the IRS. Although the potential for change may provide a ray of hope for stressed-out employees, it also creates an air of uncertainty, which may be adding to their stress.

1. In your own view, how did the reorganization of the internal Revenue Service influence employee stress? What recommendations do you have for the Agency to address the unintended consequence of the reorganization?
2. As a leader in this organization (Tom Morgan), how can leaders help employees deal with uncertainty in the organization moving forward? What recommendations could you provide the Internal Revenue Service to manage the stress of its employees?