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Part 1. Organization, Finance, and Management

Chapter 1. Organization and Staffing

Section 4. Organizational Planning

1.1.4 Organizational Planning

Manual Transmittal

August 28, 2026

Purpose

(1) This transmits revised IRM 1.1.4, Organizational Planning.

Material Changes

(1) Throughout the IRM, all terms “diversity,” “equity,” “inclusion,” the acronym “DEI”, and links to the DEI Office or content promoting diversity, equity, and inclusion if used in the context of the DEI program to align with Executive Order (EO) 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, were removed.

(2) Throughout the IRM, all language relating to bargaining units, unions, or union agreements to align with Executive Order (EO) 14251, Exclusions from Federal Labor-Management Relations Program and EO 14343, Further Exclusions from the Federal Labor-Management Relations Program was removed.

(3) IRM 1.1.4.1 Updated Management and Internal Controls, Program Scope and Objectives, to comply with IRM 1.11.2.2.4. Reorganized information, added missing subsections (Acronyms, Authority, Program Management and Review, Primary Stakeholders, and Contact Information). Moved Background from the Manual Transmittal to Program Scope and Objectives, changed Policy subsection to Program Controls. Updated Policy Owner to the CHCO.

(4) Updated IRM 1.1.4.2, to remove restrictions instituted to the six-month rule that froze subsequent transitions affecting the same employees for reorganizational changes.

(5) IRM 1.1.4.2.1, Exceptions to the Six-Month Rule, removed to comply with reorganizational changes.

(6) The IRS reorganized and implemented a new executive structure to be better positioned to meet our strategic goals. As part of this transformation and reorganization, all business units updated their IRMs to reflect valid organizational titles. The following updates have been incorporated throughout IRM 1.1.4:

  • There is one Deputy Commissioner position, instead of two, reporting directly to the Commissioner.
  • Four new IRS Chief positions will oversee taxpayer services, tax compliance, information technology, and operations, and report directly to the Deputy Commissioner:
  • Chief Operating Officer
  • Chief Tax Compliance Officer
  • Chief Taxpayer Services
  • Chief Information Technology

 

(7) Throughout the IRM, organization names, internal controls, and hyperlinks have been updated.

Effect on Other Documents

This supersedes IRM 1.1.4, Organizational Planning, dated May 26, 2021. HCO-06-0226-0003, Interim Guidance (IG) on IRM Language Related to Collective Bargaining Agreements, dated March 3, 2026, and HCO-06-0925-0015, Interim Guidance on Removing DEI Language/Practices from Staffing Policies, dated September 30, 2025, are incorporated herein.

Audience

All business units

Effective Date

(08-28-2026)


Alex Kweskin
Chief Human Capital Officer
Internal Revenue Service

1.1.4.1 (08-28-2026)

Program Scope and Objectives

  1. Purpose: This IRM provides IRS policy, standards, requirements and guidance relating to Organizational Planning

    1. Each business unit has the discretion of supplementing this guidance to add additional internal levels of review and/or approval deemed necessary or required to support their business operations.

     

  2. Audience: Unless otherwise indicated, the policies, authorities, procedures, and instructions in this IRM apply to all business units.
  3. Policy Owner: The IRS Chief Human Capital Officer (CHCO) is the policy owner for this IRM.
  4. Program Owner: The Human Capital Office (HCO), Talent Acquisition (TA), Program Execution Office (PEO) is the program owner for this IRM.
  5. Primary Stakeholders: The HCO, TA, PEO, Compliance and Communications (C&C) are primary stakeholders for this IRM.
  6. Program Contact: The HCO, TA, and PEO are the program contacts for this IRM.
1.1.4.1.1 (08-28-2026)

Background

  1. On April 29, 2016, the Department of Treasury initiated Treasury Directive 21-01, establishing policy, procedures, scope, and requirements for approval of significant organizational changes within the Department of Treasury and bureaus.
1.1.4.1.2 (08-28-2026)

Authority

  1. This IRM supplements policies and requirements and must be read in conjunction with cited authorities:

  2. United States Code (USC):

    1. 5 USC 3521, Definitions
    2. 5 USC 3522, Agency plans; approval
    3. 5 USC 3523, Authority to provide voluntary separation incentive payments
    4. 5 USC 3524, Effect of subsequent employment with the Government
    5. 5 USC 3525, Regulations
    6. 26 USC 7802, Internal Revenue Service Oversight Board

     

  3. Code of Federal Regulations (CFR)

    1. 5 CFR 576.102, Voluntary Separation Incentive Payment implementation plans

     

  4. Other:

    1. Treasury Directive 21-01, Organizational Changes
    2. Treasury Directive 102-01, Delegation of Authority Concerning Personnel Management
    3. IRM 6.10.1, Agency Accountability Systems, IRS Personnel Staffing Accountability

     

1.1.4.1.3 (08-28-2026)

Roles and Responsibilities

  1. The Commissioner of Internal Revenue is responsible for the sound organizational structure of the IRS. Per 26 USC 7802, the Commissioner of Internal Revenue consults with the IRS Oversight Board, if applicable, on plans for any major reorganization of the IRS.
  2. The Chief Executive Officer (CEO) of Internal Revenue is responsible for the sound organizational structure of the subordinate organizations including Taxpayer Services, Communications & Liaison, Tax Compliance Office, Criminal Investigation, HCO, Chief Financial Office, Data and Analytics Office, Risk and Control Office, Information Office, and Internal Consulting.

  3. The Approving Official has authority to approve or disapprove implementation of proposed changes to an organization. With this, the Approving Official is responsible for ensuring:

    1. Proposed organizational changes support the goals and strategies of the IRS.
    2. Organizational change proposals follow all regulatory requirements, directives, executive orders, and all other policies and relevant guidance.
    3. Treasury, IRS Oversight Board, and/or Executive Resources Board are informed and concur with, if applicable, proposed organizational changes.
    4. The CEO is informed of and concurs with all levels of proposed organizational changes.
    5. The CHCO is informed of and concurs with proposed organizational changes requiring CEO or above approval, and affirms the initiative complies with Treasury Directive 21-01, including concurrence with organizations within HCO, as appropriate.
    6. The HCO, TA, PEO serve as technical subject matter experts and reviewers on proposed organizational changes for all request for organizational changes (ROCs).
    7. Organizational change efforts for all ROCs are coordinated with the CFO or business unit finance function. The necessary concurrence must be obtained confirming the change is within the IRS budgetary authorities, complies with the Office of Management and Budget Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Controls, and that the proper data elements are established within the IRS financial system to track budget and expenditures.
    8. Organizational changes are shared with the Human Capital Board (HCB), when the CHCO deems it necessary due to potential impact to other business units, and addresses any concerns raised by the HCB.

     

  4. The Proposing Official is responsible for ensuring, where applicable, the following:

    1. A workforce analysis is conducted affirming that the organizational change is in line with the organization’s strategic direction (workforce planning).
    2. Planning, proposing, and obtaining the review(s) and approval(s) of organizational changes as required.
    3. Coordination with the appropriate business representatives, HCO, CEO, Finance organizations, and all other internal IRS stakeholders.
    4. All changes affecting other business units are coordinated with those business units.
    5. Organizational change proposals follow all regulatory requirements, directives, executive orders, and all other policies and relevant guidance.
    6. All budgetary implications are addressed, Office of Management and Budget Circular A-123, are considered, and the proper data elements, including Work Planning & Control (WP&C) and Form 3081, Employee Time Report, data is established within the IRS financial system to track budget and expenditures.
    7. Appropriate coordination has occurred with Communications and Liaison (C&L), Legislative Affairs, congressional and external stakeholder implications are identified, and a plan is established to ensure the necessary communications occur and/or are underway (only if approval is required by the CEO or above).
    8. Organizational changes are inclusive of a process for tracking and monitoring affected employee movement from the current organization to the end state organization, and that the Personnel Action Requests (PAR) and/or Mass Update Modules (MUMs) necessary to implement the organization change are initiated.
    9. Organizational changes are evaluated with results on how they relate to stated business case goals.
    10. The necessary reviews, concurrences, and/or certifications of the organizational change request within the HCO, C&L (Legislative Affairs), CFO, Information Technology (IT), and Facilities Management and Security Services (FMSS) occurred prior to effecting any changes.

     

  5. The PEO is responsible for the following:

    1. Providing Service-wide organizational change guidance.
    2. Providing guidance and direction in the development of business case, organizational change initiative implementation, tracking, monitoring and evaluation.
    3. Ensuring the necessary coordination occurs with all responsible areas of the HCO to support the business units throughout the design/development and implementation of the restructuring initiative; in addition to the PEO technical SME team, this includes Employee Relations (ER), PMC, Office of Executive Services (OES), Hiring Operations, Human Resources Shared Services (HROSS), and the Policy Office, where applicable.
    4. Ensuring organizational changes are shared with the HCB where it is determined the initiative will affect other business units.
    5. Ensuring the necessary reviews and concurrences of the organizational change request within the HCO, C&L (Legislative Affairs), CFO, IT, and FMSS occur prior to effecting any changes.
    6. Providing expert advice, guidance, and support for changes resulting in a Reduction in Force (RIF), directed reassignments, transfer of function, position abolishment, use of mitigation strategies, and employee separation policy and implementation.
    7. Providing expert advice, guidance, and support for requesting, obtaining, and monitoring Voluntary Early Retirement Authority (VERA)/Voluntary Separation Incentive Payment (VSIP) authority as deemed appropriate.
    8. Overseeing all aspects of reorganizations that result in a RIF, to include facilitating preparation of the business case, determining use of mitigation strategies, obtaining VERA/VSIP authority, delivering RIF briefings, preparation for all notices and letters (i.e., Reassignment Preference Notice (RPN), VERA/VSIP offers, Certificate of Expected Separation (CES), RIF, etc.), and responsible for ensuring all regulatory requirements are adhered to.
    9. Ensuring the necessary coordination occurred with HROSS to certify an accounting of all employees and PARs associated with the final implementation of any restructuring initiative, and generating a final report for the business unit that confirms the accounting of all employees and PARs, if necessary, to include that PARs and/or MUM requests are initiated and/or submitted to implement the organizational change.
    10. Ensuring organizational changes are documented, updated, and tracked through a centralized tracking system.
    11. Ensuring the organizational change package is prepared for the Treasury Assistant Secretary (ASM) for management approval when it is determined that the change met the criteria outlined in Treasury Directive 21-01.
    12. Assisting business units with their final report, evaluating, and documenting the results of the organizational change, as appropriate.
    13. Providing support and advice for organizations undergoing transformations.
    14. Ensuring all packages are shared with and/or concurred by the CEO (or delegated authority).
    15. Ensuring coordination with the appropriate business representatives, HCO, Finance organizations, and all other internal IRS stakeholders.
    16. Ensuring all changes affecting other business units are coordinated with those units.
    17. Ensuring coordination occurred with C&L, Legislative Affairs.
    18. Ensuring congressional and external stakeholder implications are identified.
    19. Ensuring a plan is established for necessary communications to occur or are underway (only if CEO or above approval is required).
    20. Ensuring the necessary coordination occurs with all responsible areas, including coordination of signature packages when the Deputy Commissioner or Commissioner of Internal Revenue must approve.

     

  6. The Facilities Management and Security Services (FMSS) is responsible for the following:

    1. Providing support and services in the areas of real estate and equipment, and facilities management.
    2. Providing guidance, support, and direction to the business units regarding any architecture, engineering and relocation planning, furniture and equipment, logistics management, real estate management, and/or any other facilities management or physical security services needed to achieve the initiative.

     

  7. The Communication and Liaison (C&L), Legislative Affairs is responsible, if applicable, for the following:

    1. Ensuring organizational changes are communicated with the appropriate audiences and stakeholders, such as employees, business units, OMB, Treasury, the American Public, Congress, the IRS Oversight Board, public interest groups, tax practitioner groups, Treasury Inspector General for Tax Administration (TIGTA), etc.
    2. Providing consultative services to the initiating organization, evaluating each request to determine, develop, and manage communications relative to the specific initiative.

     

  8. Information Technology (IT) is responsible, if applicable, for assessing the effect of the proposed change on Enterprise and/or IT applications and providing support during implementation.

  9. The Chief Financial Officer (CFO) is responsible for:

    1. Informing business units of potential effects on the operating budget and assisting with implementation plans to address budget concerns.
    2. Coordinating with business units for the establishment of identifiers or codes required by IRS financial systems to track budgetary and financial activities and/or relevant appropriations.
    3. Ensuring the new financial coding structure aligns to the proper appropriation code.
    4. Ensuring the identifiers and codes are available for budget authority when the organizational change is implemented.
    5. Coordinating with business units on the establishment of cost allocations in the IRS accounting system in time for the start of the fiscal year in which the organizational change is implemented.
    6. Ensuring details on planned reorganizations, job reductions, or increases in offices and activities are reported in the IRS Operating Plan so congressional appropriations committees can be properly notified.
    7. Ensuring compliance with Office of Management and Budget Circular A-123, identifying deficiencies and overseeing development of a corrective action plan to address deficiencies identified.

     

  10. The Human Capital Board (HCB) is responsible for the following:

    1. Reviewing and providing support for organizational change initiatives impacting services provided to taxpayers, impacting services to other business units, and results of impacted employees requiring the use of mitigation strategies potentially affecting other business units.
    2. Providing a forum for all business units to jointly address issues and challenges emerging during the development and implementation of organizational change initiatives.
    3. Identifying and addressing issues requiring cross-functional or Servicewide resolution.

    Note:

    As a general guiding principle, if the outcome from the use of the available mitigation tools results in anything other than impacted employees placed voluntarily, the initiative must be brought before the HCB for vetting and concurrence.

     

1.1.4.1.4 (08-28-2026)

Program Management and Review

  1. Program Reports: The Business Case, as detailed in IRM 1.1.4.2, is the memorandum that outlines the justification for the organizational change. Other required documents include current and proposed organizational charts for all affected organizations, certification from Chief Financial Officer (CFO), current communications plans, and Form 14074, Action Routing Sheet.
  2. Program Effectiveness: Workforce Planning is the systematic process for identifying and addressing gaps between the workforce of today and the human capital needs of tomorrow. The data collected is used to align, budget, and shape the workforce to the mission, develop targeted hiring and development plans, anticipate contingencies, and better allocate resources.
1.1.4.1.5 (08-28-2026)

Program Controls

  1. When management identifies a need to undergo an organizational change, discussions within the business unit and with executives must occur prior to submitting a ROC for approval. The ROC must clearly describe why the change is needed (e.g., result of process re-engineering, balance Span of Control (SOC)) and the benefits derived. The objective of the organizational change is to enhance productivity and effectiveness in accomplishing the current and long-range goals of the IRS. Once a decision is made to change a business unit’s current structure, it should be communicated and implemented in a manner that:

    • Supports the Strategic Vision
    • Minimizes disruption to business operations
    • Promotes efficiencies within the IRS
    • Ensures continuity of essential employee services

     

1.1.4.1.6 (08-28-2026)

Terms

  1. Approving Official - The executive or designee (via redelegation order) authorized to approve or disapprove implementation of an organizational change proposal.
  2. Business Case - This is the memorandum included in the ROC package that outlines the justification for the organizational change as required in this policy. The business case includes the desired outcome, and other facts (e.g., workforce plan) essential for the approving official to make a well-informed decision.
  3. Business Units - The organizations responsible for providing services, support, direction and oversight of all compliance, taxpayer services, and enforcement programs and activities.
  4. Competitive Area - The definition of competitive area, for Reduction in Force (RIF), has two components: organizational and geographic. Organizational is separated by administrative area and geographic is defined by the local commuting area.
  5. Directed Reassignment - An involuntary action initiated by the agency to direct the movement of an employee from one position to another without promotion or change to lower grade (CLG) (e.g., movement to a new occupational series, or to another position in the same series and grade level), where an employee and their position is realigned to a location outside of the commuting area.
  6. Job Abolishment - The termination of a position, with the duties eliminated entirely or combined with duties of another position or positions.
  7. Local Commuting Area - A geographic area that usually constitutes one area for employment purposes. It includes any population center (or two or more neighboring areas) and the surrounding localities in which people live, and can reasonably be expected to travel back and forth daily to their usual employment.
  8. Mitigation Strategies - Strategies used to avoid or lessen the number and/or severity of involuntary personnel actions that result from an organizational change. Mitigation strategies include Career Transition Assistance Plan (CTAP), Interagency Career Transition Assistance Plan (ICTAP), Reassignment Preference Notice (RPN), Grade or Pay Retention, Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payment (VSIP), Job Swaps, Outplacement Services, etc.
  9. Organizational Change - Any change to an organization’s structure, geographic boundaries, management structures, organizational mission or function, or business processes that may or may not result in a change in the workforce. The change may involve realignment, reorganization, or restructuring, and may result in abolishment of current positions, creating new positions that did not previously exist in the IRS, changes to position titles, series and grades, and/or excess employees.
  10. Proposing Official - The Tier 3 executive (or designee) authorized to facilitate the design and development of a proposed ROC.
  11. Realignment - The movement of an employee from one organization to another. A realignment does not result in any impact to employees’ current position or status (e.g., series or grade, work schedule, and/or pay (including locality pay)).
  12. Reassignment - A change of an employee from one position to another without promotion or CLG (e.g., movement to a new occupational series, or to another position in the same series and grade level).
  13. Reduction in Force (RIF) - An agency is required to use RIF procedures when an employee is faced with separation or downgrading for a reason such as reorganization, lack of work, shortage of funds, insufficient personnel ceiling, or the exercise of certain reemployment or restoration rights. A furlough of more than 30 calendar days, or of more than 22 discontinuous workdays, is also a RIF action. A furlough of 30 or fewer calendar days, or of 22 or fewer discontinuous workdays, is an adverse action.
  14. Reorganization/Restructuring - An organizational change, which eliminates, adds, or redistributes the functions or duties of an organization. A reorganization may include the movement of employees from one work unit to another.
  15. Request for Organizational Change (ROC) - The package submitted for approval for every reorganization, which includes: the memorandum/business case request, current and proposed organizational charts for all affected organizations, certifications from Chief Financial Officer (CFO), current communications plan, and Form 14074, Action Routing Sheet.
  16. Transfer of Function - A transfer of function takes place when a function ceases in one competitive area and moves to one or more other competitive areas that do not perform the function at the time of transfer. This covers the rights of non-temporary employees who have the rights to move with their work to another organization if the alternative is separation or downgrading by a RIF.
  17. Workforce Planning - The systematic process for identifying and addressing gaps between the workforce of today and the human capital needs of tomorrow. The data collected is used to align, budget, and shape the workforce to the mission, develop targeted hiring and development plans, anticipate contingencies, and better allocate resources.
     
1.1.4.1.7 (08-28-2026)

Acronyms

  1. The following is a list of acronyms and/or abbreviations used in this IRM:

    AcronymDefinition of Acronyms
    CFOChief Financial Officer
    C&LCommunications and Liaison
    ITInformation Technology
    MUMMass Update Module
    RIFReduction in Force
    ROCRequest for Organizational Change
    SETSenior Executive Team
    SOCSpan of Control
    VERAVoluntary Early Retirement Authority
    VSIPVoluntary Separation Incentive Payment
    WGWage Grade

     

1.1.4.2 (08-28-2026)

Organizational Change Request

  1. Request for Organizational Change

    1. Regardless of scope, all organizational changes begin with an identified need for change, gathering and analyzing data, consideration of alternatives, and preparing a business case to fully inform the approving official.
    2. The review and concurrence of a business case depends on the scope and effect of the organizational change. All ROCs are documented and approved as outlined in the chart below.
    3. To accomplish this, a business case must comply with, and address, specific criteria and contain all information and attachments as outlined in the ROC Template, Exhibit A.

     

  2. Authorities to Approve IRS Organizational Change. Any questions concerning approval authority should be directed to PEO.

    1. Authority to approve organizational changes at the Business-Owner level/Business Unit Commissioner, unless otherwise indicated, is whomever has the authority to affect a reorganization. This should be done in consultation with the appropriate official(s) within the business unit.
    2. The actions in Approval Table A, below, require approval at the Business Unit (BU) level, Tier 3 Executive or delegated official.

    3. Approval Table A:

      ActionOrganizational ImpactRequired Review and Approval/Authority to Approve
      Reassignment - Non-RIFChange of an employee(s) from one position to another, when an Organizational Change (such as a reorganization) occurs without promotion or CLGConsultation/Review ER, TA, PMC,
      Certification: CFO Approval: BU Tier 3 Executive
      Realignment

      Movement of employee(s) and employee’s position when an Organizational Change (such as a reorganization) occurs, the employee stays in the same agency, and there is no change in the employee’s position, grade or pay:

      • Realigning an employee or group of employees to other groups or territories within the same business unit, POD, series, grade, and position description (PD).
      • Renaming a department.
      • Create new permanent or temporary groups to accommodate new hires or employees where funding was previously authorized by the appropriate Finance office.
      		Consultation/Review: ER, TA, Commissioner, PMC

      Certification: CFO Approval: BU Tier 3 Executive
      Job Abolishment (of vacant position only)Eliminating or abolishing a vacant/unoccupied position. (Note: Requires consultation with PM/C)Consultation/Review: ER; TA; PEO, PMC

      Certification: CFO Approval: BU Tier 3 Executive

      Note:

      Business units ensure all organizational changes are well documented, monitored, and evaluated. The organizational changes are documented and tracked through to completion, if appropriate. All impacted business units keep results and documentation.
       

       

    4. The actions in Approval Table B, below, require approval at the IRS Chief level (COO, CTCO, TS, IT)

    5. Approval Table B:

      ActionOrganizational ImpactRequired Review and Approval/Authority to Approve
      Directed Reassignment (Outside the Commuting Area) - Non-RIFChange in a position, with duties eliminated in one geographical area or combined with duties of another position or positions in another geographical area. May result in Job Abolishment. See Job Abolishment definition above.Initiator: Business Unit Tier 3 Executive

      Review/Approval: ER; TA; C&L, IRS CHCO

      Certification: CFO

      Approval: IRS Chief(s)
      Reorganization/ Restructuring of IRS Chief(s) Functions

      An organizational change, which eliminates, adds, or redistributes the functions or duties of an organization. The change may affect the organization's mission, function, structure, geographic boundaries, jurisdiction, and reporting lines. The change does not impact executives. The change may result in excess employees. Examples may include:

      • Create new positions that did not previously exist in the specific business unit.
      • Changes to position titles, series, and grades, and/or excess employees.
      • Changes that affect service provided to taxpayers, or other business units as part of a formal reorganization.
      		Initiator: Business Unit Tier 3 Executive

      Review/Approval: ER; TA 

      Certification: CFO

      Approval: IRS Chief(s)
      Transfer of FunctionTransfer management (excluding executive(s)) and program responsibility from one organization (competitive area) to another organization (different competitive area) within the same functional area of the IRS.Initiator: Business Unit Tier 3 Executive Commissioner/Designee

      Review/Approval: ER; TA, PMC. 

      Certification: CFO

      Approval: IRS Chief(s).

       

    6. The actions in Approval Table C, below, require approval at the IRS Commissioner level.

    7. Approval Table C:

      ActionOrganizational ImpactRequired Review and Approval/Authority to Approve
      Reorganization/ Restructuring 

      CEO Functions
      • Significant organizational changes in which the scope and impact directly affect other business units and/or internal or external stakeholders (e.g., adding positions, grade/series, program activities, work processes, or geographic locations)
      • Creation, abolishment, or substantial change in the organization at a level that reports to the CEO.
      • Create new positions that did not previously exist in the IRS.
      • Changes to position titles, series, and grades, and/or excess employees.
      • Changes that affect service provided to taxpayers, or other business units as part of a formal reorganization
      • Changes in IRS management of senior executive service (SES) and/or critical pay positions as part of a formal reorganization.
      		Initiator: Business Unit Commissioner/Designee

      Review/Concurrence: ER; TA; CEO; CHCO; Chief, Technology Officer; Chief, FMSS; HCB; SET

      Certification: CFO

      Review: The IRS four Chiefs and the CEO

      Approval: Commissioner of Internal Revenue
      Transfer of FunctionTransfer management and program responsibility from one Deputy Commissioner directorate to the other.Initiator: Business Unit Commissioner/Designee 

      Review/Concurrence: ER; TA; IRS Human Capital Officer; Chief, Technology Officer; Chief, FMSS; HCB; SET

      Certification: CFO

      Review: The IRS 4 Chiefs, as appropriate, and the CEO

      Approval: The Commissioner of Internal Revenue

       

    8. The actions in Approval Table D, below, require approval by the Treasury ASM level.

    9. Approval Table D:

      ActionOrganizational ImpactRequired Review and Approval/Authority to Approve
      Reorganization/ Restructuring Commissioner’s Direct Reports, major changes
      • The Commissioner’s Office.
      • The IRS Servicewide changes in authority, function or scope of activities.
      • Highly visible and/or controversial changes affecting internal or external customers (e.g., closing or moving an IRS office that assists taxpayers).
      • Creation, abolishment, or substantial change in the organization at the level that reports to a bureau head (Commissioner of Internal Revenue) or deputy bureau head (Deputy Commissioner).
      • Changes in Mission Critical programs.
      • Major change in field structures.
      • Changes that will cause controversy or have a major impact on the organization’s budget, personnel, stakeholders, or Congress.
      • Changes involving involuntary actions, the use of mitigation strategies, or resulting in RIF.
      		Initiator: Business Unit Commissioner/Designee, or Commissioner of Internal Revenue

      Review/Concurrence: ER; TA (PEO, PMC); IRS CHCO; Chief, Technology Officer; Chief, FMSS; HCB; SET; four Chiefs and Deputy Commissioner

      Certification: CFO 

      Approval: The Commissioner of Internal Revenue, Treasury’s ASM, IRS Oversight Board

       

     

  3. Business Case Requirements/Justification: Organizational changes that meet criteria for approval above the business owner level must adhere to the following guidance:

    1. The initiating office must develop the appropriate level business case and/or documentation to substantiate the need for the proposed change(s) and identify potential effects. As part of the business case development, the initiating office consults with their respective Finance office and other internal business stakeholders, as appropriate.
    2. The business unit designates a Business Representative to consult and coordinate with HCO and CFO, as applicable.

    3. All organizational change proposals must address the following factors/criteria or explain why they are not applicable:

      Factors/CriteriaExplanation of Applicability
      Description of InitiativeState the purpose of the proposed organizational change. This must include description of how the proposal enhances the mission of the organization, improves alignment with the strategic plan and organizational goals, improves customer service, and improves efficiencies, use of resources, and/or saves money. The business need and expected outcomes must be clearly articulated.
      Justification of Proposed ChangesDescribe the proposed changes. Explain the differences between the proposed new structure and present structure. Present the advantages resulting from the change. Address impact on SOC, position management, and/or authorized staffing pattern or allocations. Clearly articulate advantages of the change as it relates to alignment with interdependent organization(s), improved accountability, elimination of duplication, and impact on customers and/or internal or external stakeholder
      Current StructureDescribe the current structure(s) of the organization(s) affected by the proposed change. Include the current number of positions, including vacancies, within the impacted organization(s) and the number of employees.
      Proposed StructureDescribe the proposed structure(s) of the organization(s) affected by the proposed change. This section must clearly describe the new and/or impacted organizational structures, and provide a comprehensive overview of the types of positions, changes in SOC, any impact on authorized staffing patterns, any increases or decreases in employee, manager or executive positions, changes in reporting requirements, etc.
      Realigned Organization (if applicable)Describe the new and/or restructured organization(s). If approved, how will the organization benefit? Focus on the benefits to internal or external stakeholders and customers. Identify products, programs, or services that benefit or change because of the organizational change. Who is accountable and what they are accountable for? The goal is to convey the benefits resulting from the change, should it be approved.
      Impact on Employees, Managers, Executives, Authorized Personnel Ceilings, Grades, and Span of ControlSpecifically address any implementation or mitigation strategies used to address staffing implications (i.e., use of directed reassignments, transfer of function, job swaps, grade or pay retention, RIF). Statements would be needed regarding any changes to position descriptions, critical job elements (CJEs), telework eligibility, tour of duty (TOD), POD, alternative work schedules.
      Challenges and RisksIdentify the effect of the organizational change on other organizations or agencies, and describe any coordination planned or completed. Identify associated risks (e.g., disruption of workforce, duplication of service, scheduling, transfer of work, etc.) and proposed strategies for addressing risk. Summarize any stakeholder engagement already taken place and any additional required stakeholder engagement and identify the appropriate point in the process for that engagement.
      Functional StatementsFunctional Statements are required for new or revised areas in the proposed changes.
      Possible Controversies with Members of Congress, Employee Unions, the Public, other Agencies, or other Special Interest GroupsIdentify possible controversies and what the IRS intends to do to address and/or mitigate the controversies.
      Cost/Benefit Analysis (if applicable)Using an accepted format, identify and analyze costs, savings, and benefits. Consider costs and savings, such as personnel (including costs of mitigation strategies (e.g., VERA/VSIP, relocation allowances, etc.) and support costs (e.g., space, equipment, telecommunications, supplies). Separate costs by budget line items. Explain or propose how additional costs will be funded and the points in time when funds are required.
      CommunicationsDescribe the communications strategy, to include any communications already issued, and/or scheduled for release relative to the proposed change. Include a brief explanation, including a copy of the formal communications plan and draft notice), if applicable, and/or any other critical communications. Describe coordination with C&L, Legislative Affairs; ensure congressional and external stakeholder implications are identified and establish a plan to ensure the necessary communications occur.
      Legal Requirements or Conditions Applicable to the ChangeDescribe any legal requirements, or compliance obligations, mandating or influencing the need for the proposed change. Identify any changes to delegations of authority, IRMs, etc., that may result from the proposed change. In addition, address compliance with OMB Circular No. A-123, Management’s Responsibility for Enterprise Risk Management and Internal Controls, IRS Operating Plan, and budgetary and financial activities planned and/or underway. Any deficiencies identified must be addressed and corrective actions provided that are planned and/or underway. Include a brief explanation, to include financial and organizational crosswalks, and the MUM that will affect the organizational change in the personnel and related systems, as applicable.
      ConclusionDescribe the timeline for completion and how the organizational change will be evaluated and/or tracked (if applicable). Any tracking system or process used should ensure that all financial and employee systems, PARs, IRMs, etc., are processed and accounted for promptly. All mitigation strategies will be tracked using PeopleTrak and/or other equivalent tool approved by the HCO.

       

    4. All organizational change proposals must address and include the following attachments:

      Attachment/TitleDescription
      Attachment #X - Current Organizational Chart(s)High level organizational chart(s) for ROCs that require TSM approval only, and detailed organization chart(s) up to the first executive level. Must reflect permanent position of record for employees and identify: employee names, position titles, PDs, pay plans (e.g., General Schedule (GS), Wage Grade (WG), IR, etc., series, grade, number of positions for each organizational segment (including vacant funded positions), clearly reflect direct lines of supervision, enough detail to clearly identify SOC.
      Attachment #X - Proposed Organizational Chart(s)Provide proposed organizational chart(s). A signature line will be added to the proposed organizational chart to include the Treasury approving official, if applicable.
      Attachment #X - Proposed TimelineProvide a timeline for implementation illustrating when the proposed organization will go into effect and highlighting critical milestones. Timeline must identify critical deadlines that if not met will significantly affect the IRS’s ability to implement the organizational change initiative
      Attachment #X - CFO CertificationProvide information as to certification and date in the business case.
      Attachment #X - Cost/Benefit Analysis (if applicable)Identify and analyze costs, savings, and benefits. Consider costs and savings, such as personnel and support costs (e.g., space, equipment, telecommunications, supplies). Separate costs by budget line items. Explain or propose how additional costs will be funded and the points in time when funds are required.
      Attachment #X - Treasury/HCO Checklist (if applicable)Attachment needed for ROC that requires Treasury approval
      Attachment #X - Mass Update Module (MUM) Organizational Alignment Timeline (if applicable)Note: Inadequate coordination/timing could affect personnel salary.
      Attachment #X - Change ReportA spreadsheet of change from and change to information.

       

     

  4. Review and Approval Process of ROC:

    1. The Associate Director, PEO facilitated the review and coordination of all parties in the concurrence process, as applicable. All proposals are reviewed for staffing (voluntary or involuntary) implications, workforce related issues, impact on position management and SOC, mitigation strategies, impact on workforce planning, succession planning, and employee development concerns, and to ensure all other applicable regulatory, policy, and/or procedure requirements are met. A determination is made as to whether the initiative needs to go the SET, HCB, and/or any other oversight or organizational boards in advance of the initiative implementation. A determination is also made as to whether Treasury approval is required. All concurrences are tracked, concerns are documented and addressed, and a final package is submitted to the appropriate Approving Official for review and signature. If the IRS offers separation incentives under any other statutory authority, a description of how the IRS is using that authority is included.
    2. Organizational changes requiring approval from the four IRS Chiefs, or above, also require the approval and/or concurrence of the CFO, IRS CHCO, Chief Technology Officer, Chief FMSS (if space implication), and Deputy Commissioner, if applicable, based on the type and scope of the ROC. These reviewers will analyze aspects of the proposal specific to their responsibilities.
    3. A proposal requiring approval of the Commissioner of Internal Revenue must include the concurrence of the Business Owner (e.g., Business Unit Commissioner/Director) who initiated the proposed change and their respective Deputy Commissioner. When the proposed change affects multiple business units, the other Business Owners and their respective Deputy Commissioner must concur in advance of submission to the Commissioner of Internal Revenue. All proposals must adhere to the approving authorities in the Authorities chart.

     

  5. Implementation of ROC Initiative (if applicable)

    1. The business unit will implement a plan(s) to track and monitor pre- and post-implementation activities. Pre-activities may include detailed timelines identifying major milestones, including financial and system changes, processing PARs, mitigation strategies, etc. Post activities may include detailed timelines identifying major milestones, system changes, updating IRMs, delegation orders, permissions on mailboxes and SharePoint sites, migrating Leadership Succession Review (LSR) records, etc. Defined roles and responsibilities for business unit functions including embedded human resources (if applicable), major stakeholders, and support functions. Identified risks and planned responses and contingencies. A communication plan addressing information needs of project team members, affected employees, and customers.
    2. Business unit specific initiatives, without involuntary actions and/or the use of mitigation strategies, are coordinated and implemented through routine support channels. For example, business units ensure all PARs reflecting placement action and/or change in data element(s) are submitted timely, and all other systems are updated to reflect the new organizational structure.
    3. The business unit is responsible for reporting the organizational change to the CFO. Budgetary and financial issues are coordinated with the CFO, as outlined under Responsibilities.
    4. Any new organization or reorganization request for establishing identifiers/codes in the IRS financial and accounting systems meeting the following criteria must be submitted to the CFO by the annual master data call deadline in the year prior to the fiscal year the organizational change is to be implemented. Criteria includes Deputy Commissioner approval or above; Establishment of a new Financial Plan; Moving established cost offices (centers) from one budget office (fund center) to another budget office.
    5. Changes in identifiers/codes in the IRS financial accounting systems that do not meet any of the criteria listed above may be submitted to the CFO anytime during the fiscal year, but at least 45 days in advance of the reorganization’s effective date.
    6. The business unit is responsible for ensuring that all IRMs, delegation orders and organization charts are updated to reflect changes in the organization. Changes to competitive areas must also be reported and documented on the annual request for updates.

     

  6. Evaluation of Completed Initiative (if applicable).

    1. As part of the organizational change process, the business unit is responsible for evaluating the effectiveness of the implemented organizational change.
    2. For initiatives with impact beyond the initiating business unit, the initiator is responsible for preparing a final report addressing the completed organizational change.
    3. Evaluation criteria should be consistent with those identified in the business case proposal.
    4. The completed evaluation is shared with HCO, CFO, C&L, and Legislative Affairs.
    5. Evaluation should include a final reconciliation of all employee/position movements.
    6. The HCO will assist the business unit with the final evaluation.
    7. Business unit specific organizational changes should include a final report documenting implementation and completion, if appropriate. This report is maintained by the business unit with the original business case for change.

     

1.1.4.3 (08-28-2026)

VERA and/or VSIP Requests (if applicable)

  1. Requests for use of VERA and/or VSIP. Organizational change requests that include the use of VERA and/or VSIP authority.

    1. Business units should begin planning for VERA/VSIP as soon as it appears likely that the organizational change cannot be accomplished through less severe methods (e.g., hiring freeze, normal attrition, reassignments).
    2. Requests for use of VERA/VSIP is required when a RIF is anticipated and subject to Office of Personnel Management Agreement (OPM) approval.
    3. Early planning by the business unit in partnership with ER ensures that the VERA/VSIP authority is available in time to make the most effective use of the option. Lead-time is necessary to develop the data to support the VERA/VSIP request, submit the request through required IRS and Treasury approval levels, and formally request OPM approval.
    4. The VERA/VSIP package, which is different than the ROC, must outline the intended use of the VSIP incentive payments, and must include identification of the specific positions and functions to be reduced or eliminated, identified by organization, geographic location (city/state), pay plan, occupational series, grade, and any other factors related to the position. A description of the categories of employees offered separation incentives identified by organization, geographic location, occupational series, grade and any other factors, such as skills, knowledge, or retirement eligibility. The timeframe during which separation incentives are paid and date by which employees will be off the roles. The number and maximum dollar amounts of the separation incentives offered. A description of how the organization will operate without the eliminated or restructured positions and functions (i.e., strategic workforce plan). A proposed organizational chart displaying the expected changes in the organizational structure after the organization completes the incentive payments as well as a current organizational chart must be included. An explanation of how the IRS will use VERA (if used) in combination with separation incentives. Lastly, a description of how the IRS is using separation incentives under any other statutory authority (if used).

     

  2. Review and Approval Process of VERA and/or VSIP Request

    1. Once the ROC is reviewed and approved, and if the use of VERA/VSIP is requested, ER facilitates the creation of a VERA/VSIP request and business case which is reviewed and coordinated with all parties.
    2. All proposals include concurrence of the IRS CHCO and Treasury.
    3. Final approval authority falls with OPM.

     

Exhibit 1.1.4-1 

Request for Organizational Change Template - Exhibit A

MEMORANDUM FOR [APPROVING OFFICIAL TITLE]
 

THRU: Name, if applicable
 

FROM: Name

Title

SUBJECT: Reorganization Request - Proposal to Restructure or Realign

[Business Unit or Title of Initiative(s)]

Description of Initiative: State the purpose of the proposed organizational change. This must include description of how the proposal enhances the mission of the organization, improves alignment with the strategic plan and organizational goals, improve customer service, and improve efficiencies, use of resources, and/or saves money. The business need and expected outcomes must be clearly articulated.
 

Justification of Proposed Changes: Describe the proposed changes. Explain the differences between the proposed new structure and present structure. Present the advantages resulting from the change. Address impact on SOC, position management, and/or authorized staffing pattern or allocations. Clearly articulate advantages of the proposed change as it relates to alignment with interdependent organization(s), improved accountability, elimination of duplication, and impact on customers and/or internal or external stakeholders.
 

Current Structure(s): Describe the current structure(s) of the organization(s) affected by the proposed change. Include the current number of positions, including vacancies, within the affected organization(s). Note: This section must clearly describe the current organizational structure(s) and comprehensive position listing(s) included as Attachments.


Example: The current XYZ (business unit) high-level organizational structure is outlined in Attachment A. There are currently a total of XXX positions, including XXX vacancies, within the XYZ organization. A detailed organizational structure, which includes a comprehensive listing of the occupations and grade levels currently within the XYZ organization is outlined in Attachment B.
 

Proposed Structure(s): Describe the proposed structure(s) of the organization(s) affected by the proposed change. This section must clearly describe the new and/or affected organizational structure(s) and provide a comprehensive overview of the types of positions, changes in SOC, any impact on authorized staffing patterns, any increases or decreases in employee, manager, or executive positions, changes in reporting requirements, etc.


Example: The proposed ABC structure, with the XYZ realignment added, is outlined in Attachment C. The detailed XYZ organizational structure, which includes a comprehensive listing of the occupations and grade levels in the proposed organization, is outlined in Attachment D. The proposed organizational structure increases the number of positions reporting directly to Manager/Executive A by # positions, for a total of ## positions. In addition, the change results in a title change for the Manager/Executive A, from Current Title to New Title. With this, ### employees are realigned intact, # frontline management positions will be eliminated, and # new senior management positions are established.
 

Realigned Organizations (if applicable): Describe the new and/or restructured organization(s). If approved, how will the organization benefit? Focus on the benefits to internal or external stakeholders and customers. Identify products, programs, or services that benefit or change as a result of the organizational change. Who is accountable and for what they are accountable for? The goal is to convey the benefits resulting from the change, should it be approved.
 

Impact on Employees, Managers, Executives, Authorized Personnel Ceilings, Grades, and/or SOC: Specifically address the impact the proposed change will have on the workforce and/or position management controls. Address any implementation or mitigation strategies used to address the staffing and placement implications (i.e., directed reassignments within or outside the commuting area, transfer of function, grade or pay retention, RIF, VERA, VSIP, job swaps, etc.). When assessing the impact of the proposed change, consideration must be given to the impact the change will have on employee engagement.
 

Challenges and Risks: Identify the effect the change has on other organizations or agencies, and describe any coordination planned or completed. Identify associated risks (e.g., disruption of workforce, duplication of service, scheduling issues, transfer of work, etc.), and proposed strategies for addressing each risk. Summarize additional stakeholder engagement already taken and/or planned in advance of implementation. Summarize additional required stakeholder engagement planned in advance of implementation and identify the appropriate point in the process for that engagement.

Functional Statements: Identify and address whether a new or revised functional statement is required. If applicable, provide the new functional statement and a summary of how the function(s) change because of the proposed change.
 

Possible Controversies with Members of Congress, Employee Unions, the Public, other Agencies, or other Special Interest Groups: Identify anticipated controversies and what the IRS intends to address and/or mitigate the controversies.
 

Cost/Benefit Analysis (if applicable): Using an accepted format, identify and analyze costs, savings, and benefits. Consider costs and savings, such as personnel (including costs of mitigation strategies (e.g., VERA/VSIP, relocation allowances, etc.)) and support costs (e.g., space, equipment, telecommunications, supplies). Separate costs by budget line items. Explain or propose how additional costs will be funded and the points in time when funds are required.

Communications: Describe the communications strategy, to include communications already issued and/or scheduled for release relative to the proposed change. Include a reference to each Attachment, with a brief explanation, including a copy of the formal communications plan and/or any other critical communications.
 

Legal Requirements or Conditions Applicable to the Change: Describe any legal requirements, or compliance obligations, mandating or influencing the need for the proposed change. Identify any changes to delegations of authority, IRMs, etc., that come because of the proposed change. In addition, address compliance with OMB Circular No. A-123, Management's Responsibility for Enterprise Risk Management and Internal Controls, IRS Operating Plan, and budgetary and financial activities planned and/or underway. Any deficiencies identified must be addressed, as well as the corrective actions planned and/or underway. Include a reference to each Attachment, with a brief explanation, including financial and organizational crosswalks, and the MUM affecting the organizational change in the personnel and related systems, as applicable. 
 

Organizational Change Tracking/Evaluation (if applicable): Describe the measures in place to track and monitor implementation. The plan should address the system or processes used to monitor and track the updating of all financial systems, employee systems, etc. and that all PARs are processed and accounted for promptly, etc. All mitigation strategies are tracked using PeopleTrak and/or other equivalent tool approved by HCO. Include a reference to each Attachment with a brief explanation, to include implementation plan, deliverable, responsible parties, and timelines.
 

Conclusion: Describe how, when, and by whom the effect of the organizational change is evaluated and timeline for completion. Evaluation criteria should be consistent with the scope, purpose, and effect of the change identified in the organizational change proposal.