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Washington, D.C.-October 1 marks the beginning not just of the new fiscal year, but the official start-up date of a new Internal Revenue Service (IRS), focusing on customer service in the most massive, ambitious restructuring effort in federal government history, and one conducted with unprecedented employee involvement, the president of the union representing IRS employees said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU), whose members helped design and create the restructured IRS and are now playing keys roles in the implementation of the modernization effort, said "the hard work of IRS employees over the past two years has set the stage for even greater improvements" in this agency vital to the collection of revenue needed to fund the programs and services the American public deserves and wants.

Kelley noted the design work for a restructured IRS has been undertaken on a parallel track with the past two tax-filing seasons, both of which have been completed without major problems. "Clearly, this speaks to the professionalism and dedication of IRS employees," the union president said.

Under the modernization plan, which will take at least another 18 months for full implementation, the agency is moving from the geographic structure it has used since 1952 into one in which groups of taxpayers will be serviced by organizational units devoted to their specific tax needs.

These include divisions providing Aend-to-end@ service for wage and investment earners, large and mid-size business, small business and self-employed taxpayers and government entities and tax-exempt organizations. In addition, under the plan there are agency-wide units handling certain functions and services that cross operating divisions.

"This massive undertaking has been able to move forward so well thus far because of the dedication and commitment of IRS employees," Kelley said. "The fact is that the IRS is woefully underfunded, lacking adequate staff, training and technology. Congress enacted the law creating the new IRS, and now needs to step up to the responsibility of providing adequate and stable funding to ensure the effort's ultimate success."

Work on the modernization began three years ago with the efforts of the bipartisan National Commission on Restructuring the IRS, whose 17 members studied the work processes, systems and other aspects of the agency for a year. The commission's recommendations focused on the need for improved customer service as a way to increase voluntary compliance with the nation's tax laws.

Its work was followed by enactment in 1998 of the IRS Restructuring and Reform Act (RRA), which incorporated many of the commission's suggestions. Kelley noted that 1997 Senate hearings on the agency "turned a harsh spotlight, ultimately proven to have been unfair, on IRS employees." The reality of their expertise and dedication is "clearly seen" in their contributions to the modernization effort, she said.

RRA was followed, in turn, by the efforts of several thousand NTEU members, working on design teams, subteams, research teams and joint labor-management workgroups, to bring their front-line knowledge to developing a modernized IRS. "I cannot say enough about the great work of our members in this effort," Kelley said, noting that "their work will continue as an important ingredient in the implementation phase of the modernization."

NTEU is the largest independent federal union, representing more than 155,000 employees in 25 agencies and departments, including 98,000 in the IRS.