The Australian Tax Office will close another 10 regional offices across Australia even though it is relocating hundreds of workers to Gosford to boost the central coast's economy.
One of the unions representing staff says there will be a high likelihood of forced redundancies.
The Tax Office says 72 staff will be affected by the closures and not all will be made redundant because some will be redeployed.
However the Australian Services Union's tax branch secretary, Jeff Lapidos, said it would be difficult for staff in regional offices to relocate.
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Offices at Port Macquarie, Sale, Mackay, Bendigo, Rockhampton, Launceston, Cairns, Orange, Toowoomba and Grafton would shut within six months, he said. The Bundaberg office has already been shut.
An ATO spokeswoman said affected staff were advised on Wednesday morning that the offices would be closed by October 31.
"Senior executives will be visiting the impacted sites over the next few weeks and will work with staff to assist them to consider their options," the spokeswoman said.
"We will continue to support the wellbeing of all employees throughout this process.
"In addition to regular communication and support from managers, 24-hour, seven-day-a-week confidential support is available through our wellbeing program.
"Where redeployment is not feasible and a voluntary redundancy is not taken up, then the jobs will be classified as excess and it is possible we will have to consider involuntary redundancies in some cases."
Community and Public Sector Union lead organiser Emma Groube said the decision was a blow to staff in regional areas, where it was hard to find work.
She said it was a deliberate move by the government away from face-to-face delivery of services, which would be replaced by online and phone communication with customers.
Second commissioner Neil Olesen told staff the regional offices were established to help small businesses during the rollout of the GST 14 years ago, but demand for the offices had reduced since then.
It is not expected workers from the 10 regional offices will be moved to the central coast.
Opposition assistant treasury spokesman Andrew Leigh said the decision made the Nationals, the minor part of the Coalition partnership, appear ineffective and weak.
"Small businesses seeking advice from friendly ATO staff will have no local option," Mr Leigh said.
"This is more bad news for regional towns across four states."
From this month the Tax Office is rolling out voice print technology, which allows customers to be identified on the phone using only their voice.
This saves 45 seconds a phone call once established and replaces the work of 100 full-time staff.
The agency is also introducing "tick and flick" tax returns to lower the workload of processing 1.4 million tax returns for people with simple lodgements.
The Tax Office was the hardest hit by the budget. It will lose 4700 staff over the forward estimates and more than 2000 in the coming financial year.
A total of 300 ATO staff will be relocated to Gosford as part of the agency's huge changes. Another 300 public servants will be relocated to the same new building on the central coast.