Tax Cut for USPS

The Post Office is catching a break this year, thanks to the Internet.

Mail handler Eugene Ikemoto won’t be buried under paper tax returns; about 75 percent of taxes will be filed electronically this year.

Photo: Rae Huo

If everything goes as planned this year, when the income tax deadline rolls around, Daniel Hirai will be home having dinner with his family.

For most, that might not sound like an unusual goal, but, considering the way tax day used to be at the largest United States Postal Service (USPS) facility in the state, the meal represents a sea change.

“Even just eight years ago, we had lines going around the building and traffic backed up all the way to the freeway. It was crazy,” says Hirai, manager of in-plant support at the USPS Honolulu Processing and Distribution Center.

The circuslike atmosphere surrounding tax day at the post office was an annual event, often accompanied by local live-news feeds and television cameras. But that’s all changed, says Hirai. “Now, there’s still a one-hour window after work, maybe 5:30 to 6:30 p.m., when the cars are backed up out of our parking lot,” he says, “but that’s it.”

The decline can be attributed to the advent of the IRS’s e-file, which allows filers to submit their returns online. When e-file debuted nationally in 1990, many balked at the idea of sending personal financial information from a computer; only 4.2 million tax returns were filed electronically that year.

By 2010, however, about 100 million tax returns—or 70 percent of the roughly 140 million individual tax returns filed—were delivered via IRS e-file. In 2011, expect the numbers to continue growing. Some estimate a 75-percent e-participation rate this year.

Granted, the paper tax return may never completely go the way of the dodo, as there will always be those who hold sacrosanct the implicit privacy of a sealed envelope. These customers will continue to be served by Hirai and his 700 co-workers at the Honolulu Processing and Distribution Center, an efficient, 300,000-square-foot, Rube Goldberg-ian spectacle that hums 24 hours a day, 365 days a year.

After the paper federal tax returns have been collected, separated, postmarked, scanned, bar coded, sorted, sleeved, banded and routed—touching the hands of no fewer than nine different employees throughout the process—they are ready to be flown to the Sacramento processing facility, where they’ll be directed to the IRS centers in either Fresno or San Francisco.

Just don’t forget the stamps.