Fighting a red-hot job market, the IRS struggles to rebuild

 Four months had passed since the Internal Revenue Service warned that during the coronavirus pandemic it had built up a staggering pile of unprocessed tax returns, and finally, the day had arrived to try to do something about it.

The Ogden IRS campus was hosting the agency’s first major job fair in Utah in decades, after a rush of departures that had helped cause the backlog. The marketing department had blitzed the area with help-wanted ads and sent postcards to homes with incomes under $50,000. The head of human resources was on the way from Washington. Shrink-wrapped pallets of bottled water were ready, and recruiting teams had set up chairs inside a building in Clearfield, near the IRS campus. A stack of forms on a table listed résumé-writing tips, federal government benefits, and the open positions: clerk and tax examiner, with starting pay at $15.61 an hour.

About 400 people had registered for the event in the three weeks since the Biden administration announced plans to hire 5,000 people this year in Ogden and at the IRS’s two other paper-processing centers, in Austin and Kansas City, Mo., through a system that bypasses normal federal hiring rules and allows instant job offers. But the organizers knew that no-show rates could run as high as 40 percent. All morning it had been raining hard.

The IRS’s unprecedented backlog last winter of 24 million returns and pieces of taxpayer correspondence for the 2020 tax year was propelled by colliding crises: The pandemic decimated its workforce after years of budget cuts and attrition; new stimulus measures added to the workload, and the agency remained crippled by its way of doing business, processing the millions of returns it still receives on paper each filing season with red-pen edits, manual data entry and clunky computer software that dates to the 1960s.

With technology upgrades on hold, the men and women who gathered here off Interstate 15 represented one agency’s effort to reboot after a public health crisis that left major functions of the federal government in disarray, with uncertainty about when they would return to a pre-pandemic normal.

Scott Wallace, acting field director for submission processing, hoped that any recruits would fill some of the 700 openings on his staff of 3,400.

Examiners work through a backlog of paper tax returns and correspondence that reached a nationwide count of 24 million this winter, in Ogden on March 31. (Alex Goodlett/For The Washington Post )

“It’s a lot of empty seats, isn’t it?” Wallace said as he led a tour of the campus, where rolling carts stuffed with unprocessed returns lined the hallways. “Literally, I don’t have enough people to fill them. These are blue-collar $16- and $17-an-hour jobs.” His workforce is aging, as is the IRS broadly, with an average age of 55, and more than half the employees are eligible to retire. Commissioner Charles Rettig told Congress in March that the agency will need to hire 52,000 employees in the next six years just to tread water.

The rebuilding effort across the nation and in Ogden has collided with a new obstacle: the country’s heated competition for workers. Utah’s unemployment rate of 2.1 percent in February is tied with Nebraska’s for the lowest in the country. The jobless rate around Ogden was 2.3 percent, according to the U.S. Bureau of Labor Statistics. The total of 6,000 employees on the Ogden campus makes it the city’s largest employer, but the government is competing with a nearby Air Force base, an automotive supplier paying entry-level air-bag assembly workers $17.82 an hour, a kidney dialysis company — and a just-completed Amazon distribution center down the street that’s hiring for 500 jobs, some starting at $17 an hour.

In Ogden, at the sprawling, low-slung brick campus built in the 1950s to process returns from eight Western states, Wallace needs to fill weekend shifts and swing shifts that go until at least 1 a.m. and often as late as 3 a.m. Ogden used to furlough employees hired for tax season for as long as six months each year, but it’s now a 12-month, 22-hour-a-day operation, the lights and computers turning off just two hours a day for the indefinite future.

To buck up everyone’s spirits, Amanda Walters, a 29-year-old tax examiner hired 18 months ago at the height of the pandemic, joined with a colleague to create a giant collage of a mountain with climbers at various levels. “Together we rise … to the top!” they wrote, adding targets inside white clouds around the mountaintop, which they’ll reach when they’ve processed 1.3 million returns by, they hope, July.

“I don’t know how many times I’ve heard, ‘This is not the norm,’ ” Walters said. “This is my norm.”

Two workers at the Ogden campus created a collage showing their team's inventory targets as they plow through the backlog of paper tax returns. (Alex Goodlett/For The Washington Post )

She works as a backup line supervisor in the code and edit division, where paper returns are marked by hand before the information is entered into a computer by the next team, keystroke by keystroke. The paper takes a mind-numbing path from room to room to be sorted, retyped, and filed, sometimes with a stop at a team devoted to discovering errors. They’re not all that rare: The error rate for paper returns was 22 percent last year, according to the Taxpayer Advocate Service. Along the way, a paper return is touched by humans at least a dozen times.

All of these paper returns — which make up 10 percent of the IRS’s work, with the rest electronic filings — are marked with ink and old-fashioned rubber stamps to give them locator numbers before they go into storage. Just one company is still in business to service the stamps, which must be advanced to the next day with a wooden stylus.

“We’re probably the only place that even uses something like this anymore,” Wallace mused as the thrum of 30 employees stamping at once echoed in the hallway. “Is it time to look at modernization?” he added, his lips curling into a smile.

The IRS has hunted for money from Congress for decades to update its antiquated systems. For now, the priority is getting the government caught up on the 2020 tax year.

“We feel the pressure, but we are taxpayers as well,” said Michelle Thatcher, 41, a lead, in IRS parlance, in the error resolution department.

“If the rest of the country could understand we’re doing the best to help them,” Thatcher said. Then she issued a plea: “Please, honestly, if they could e-file, they wouldn’t have to wait for us to touch their return 15 times. If they would just do that, they wouldn’t be so angry at us.”

The IRS shut down relatively briefly during the pandemic, sending its employees home from early April to June 2020. In-person work ramped up gradually over several months. Everyone saw colleagues disappear, and the causes varied: retirement; resignation over fears of getting sick in a crowded workplace; anger at the government’s vaccine mandate; loss of child care; the stress of wearing a mask for eight hours, plus mandatory overtime, which could add up to dozens of extra hours a week.

“With all the unknowns, it made a lot of people nervous,” said Brett Bemenderfer, a program manager in submission processing. “They pay for some of our positions comes in below the poverty line,” he noted, “and then we bring them in and hand them a red pen and some don’t find that too appealing.”

The pandemic had a big upside, though. The departures opened opportunities, with many employees finding themselves quickly promoted. McKenzie Holland, hired as a clerk right before the pandemic, soon was moved up to lead a team of 34 employees. “I know people who’ve gotten a management position from a clerk just during the pandemic,” she said.

What the IRS can’t offer, though, is telework. Amy Hussey, a manager, recalled how she tried to talk a waitress at a local restaurant into applying to the agency. But the woman wanted to work from home — an option for some IRS jobs, but not the ones that directly handle returns.

“We’re a paper-driven organization,” Hussey said. “We have companies all over Utah that opened their doors to working from home, and I think it’s impacted us.”

By 3 p.m. on the Thursday of the job fair, the sky had cleared and an overloaded computer system that had caused brief pandemonium in the morning had new power. The crowd was substantial, a mix of high school students in T-shirts, people in their 30s and 40s in jeans and in suits, and even retirees waiting patiently with folders on their laps, their résumés inside, and pink tickets to present when their numbers were called.

Job seekers wait to be interviewed for entry-level positions at an IRS job fair in Clearfield, near Ogden, on March 31. (Alex Goodlett/For The Washington Post )

Wendy Jenkins, a recruitment analyst with 35 years of service at the Ogden campus, was moving down the line of seated applicants with her pitch.

“Once you get your foot in the door, the sky’s the limit, honestly!” she shouted, her voice hoarse. “A lot of your private-sector jobs don’t have pensions anymore, but we have an awesome retirement system!” There was more, Jenkins said: flexible schedules, two-thirds of health insurance paid by the government, a child-care subsidy in the works, paid parental leave when a baby comes. Anyone with unpaid taxes would need to pay them. “But that’s okay! We want you to join our IRS family. We’re working for the nation.”

The staff was starting to feel optimistic that, just maybe, workers would trade up from their retail jobs.

“I’m on my feet all day, and I’m looking for something with benefits,” Angela Fronk, 51, said as she waited. She was making $12 an hour as an assistant manager at a 7-Eleven 25 miles north in Brigham City, with no paid vacation. She had worked through the pandemic and never gotten the virus. “I heard the IRS was hiring on the spot, and I want to see if that’s true,” she said.

A few chairs down, Mike Gerdes 60, had tried to get hired by the IRS several times but had gotten nowhere on the federal government’s cumbersome job portal, which can take six months or more to work through — if it responds at all. Gerdes was now unloading trucks for a local grocery store, but the work was unsteady, he said. “I can unload crockpots all night into a trailer, but this sounds a lot better.”

Like Gerdes, many waiting in line sensed new possibilities.

After 14 years as a produce associate at Walmart, Cory Farley, 37, was making $14.95 an hour and felt underappreciated at a job he had no passion for, he said. It was time for a change.

His wife, hired by the IRS last year as a tax examiner, had convinced him to apply. “She said, ‘This is completely different. You’re going to like it,’ ” he said.

The job fair was full of people like Farley, with family and friends who’d referred them — and would get a $500 bonus if the recruits stayed on a year. Ogden, with its large Mormon population, is a community that tends to stay put, and IRS employees can span generations of families.

The candidates presented their résumés and took part in interviews that were not really interviewed at all, the assumption being that as long as an applicant had six months of full-time work, a year of education out of high school or a combination, a job offer would be made.

Job candidates interview for entry-level positions at the IRS job fair in Clearfield on March 31. (Alex Goodlett/For The Washington Post )

The offers, pending background checks, started rolling in. A deaf woman, assisted by a sign-language interpreter, burst into tears when hers came. Another woman in a suit cried, too.

“Keep watching your email!” Christopher White told an overnight stocker at Sam’s Club as he typed the man’s information into his laptop computer. “In about five minutes, I’m going to send you a temporary job offer.” White and Becky Stevens formed a tag team, with Stevens asking if anyone had questions she could answer. If not, she volunteered what she thought they needed to know, including that their health insurance would start on their first day of work.

“These are seasonal positions,” she said and explained that if applicants were furloughed, they would be eligible for unemployment insurance. “But we haven’t furloughed in two or three years, so I wouldn’t worry.”

A man asked if he could work from home. “We just have to keep control of those documents,” Stevens said, explaining why he couldn’t.

The recruits would start May 9 if they passed background checks and accepted final job offers, but after orientation and training, it would be another five to six weeks before they would be helping to cut the backlog.

Farley would be the last person of the day to get an offer.

He chose the swing shift so that his wife could use the couple’s car for her day shift. He would get a 10 percent night differential after 6 p.m. “Congratulations!” said the recruiter, Amber Bemenderfer, whom Farley recognized from years ago in high school and the wife of program manager Brett. “We’re so excited to have you!”

“I’m feeling pretty excited!” he said, though he still had to return to be fingerprinted. “Like this is the right step for me.”

By the time the job fair closed on Friday, 653 people had tentative offers in Ogden. It was a start. But unknowns loomed, the biggest being whether the IRS could keep the new employees on board and avoid another staffing crisis.

“They’re coming through the door and that’s fantastic,” said Brett Bemenderfer. “We just have to keep them in the door.”

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