COVINGTON — The Internal Revenue Service's tax processing center here will handle business tax returns only — starting in April 2002 — as part of a systemwide reorganization.

        The Covington center will become one of only two in the nation devoted solely to processing business tax returns.

        “The new IRS commissioner, Charles Rossotti, came from business; and his contention was, why would you have 10 centers doing the same thing but specializing in nothing?” said Covington Service Center spokesman Chris Kerns. “He wants people to become experts in what they do.”

        Reorganization of the nation's 10 tax processing centers means April will be the last time the Covington center processes individual taxpayer returns in any substantial quantity.

        One immediate change — as the transition begins — is that 2000 individual returns from Kentucky taxpayers will go to the Memphis processing center. Kentucky had been one of five states served by the Covington center. This year, only Ohio and Michigan individual returns will come here.

        The full impact of the change on hiring practices isn't known, but IRS managers expect it to mean more permanent positions and fewer seasonal ones in Covington.

        Business tax returns come in quarterly throughout the year, in contrast to individual returns which arrive in a flurry between the start of the year and the April 15 deadline. So for individual returns, an IRS service center needs to boost employment for three or four months.

        Mr. Kerns said it hasn't been determined yet how many permanent jobs will be added and how many seasonal jobs trimmed for 2002.

        All that's certain is that change is ahead and that it generally will mean fewer seasonal employees and more permanent employees.

        When the permanent jobs do become available a year from now, the first place IRS recruiters will look will be among the seasonal employees.

        The IRS — which has 5,000 employees in Covington and nearby facilities — now relies on 2,500 seasonal employees. About 600 of those are people who return from past years, leaving about 1,900 seasonal jobs to be filled each year.

        Covington's central location in the nation was one reason the center was selected for business returns.

        Another reason is the center's reputation for quality and innovative work, Mr. Kerns said. In 1986, for example, the center did a pilot project that let taxpayers file electronically via the Internet. That year, 25,000 taxpayers made use of that new service. Now, 30 million do.

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