The Internal Revenue Service would be able to save more than $111 million in real estate rental costs over the next five years by requiring employees to share their work space if they often work remotely, according to a new government report.

The report, released Monday by the Treasury Inspector General for Tax Administration, found that if IRS employees who routinely telework on a full- or part-time basis shared their workstations, 10,244 workstations could potentially be eliminated, enabling the IRS to reduce its office space needs by almost one million square feet.

In 2010, President Obama directed government agencies to eliminate excess properties and achieve $3 billion in savings by the end of fiscal year 2012. TIGTA assessed the IRS’s progress in achieving real estate cost savings by implementing a telework-station sharing strategy.

From October 2010 through December 2011, the IRS completed 17 space consolidation and relocation projects, which the IRS reported will result in $2.8 million of realized rent savings in FY 2012. The IRS also plans to complete an additional 66 projects by September 2012 that could provide an additional $3.8 million in realized savings in fiscal year 2012.

“Because the IRS has been unable to effectively capitalize on the space-related cost savings available from workstation sharing by employees who telework, it continues to incur rental costs for more workstations than required,” said TIGTA Inspector General J. Russell George in a statement.

TIGTA recommended that the IRS finalize an agreement with the National Treasury Employees Union, establishing an IRS-wide workstation-sharing policy that can be implemented agency-wide; develop an overall strategy linking workstation sharing with the IRS’s planning for future space needs; and re-evaluate the potential impact of workstation sharing on all current real estate planning projects.

IRS management agreed with TIGTA’s recommendations. The implementation of a shared workstation program for telework employees has been successfully negotiated with the NTEU and will take effect on Oct. 1, 2012. The IRS plans to revise interim and long-range strategies for future space needs to include workstation sharing as appropriate. It will also review real estate projects to determine if the applicable space requirements can be reduced if workstation sharing is implemented for frequent teleworkers.