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Better Manage Taxpayer Service and Future Risks' which was released on 
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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

December 2014: 

Tax Filing Season: 

2014 Performance Highlights the Need to Better Manage Taxpayer Service 
and Future Risks: 

GAO-15-163: 

GAO Highlights: 

Highlights of GAO-15-163, a report to congressional requesters. 

Why GAO Did This Study: 

During the filing season, IRS processes tax returns, issues refunds, 
and provides telephone, correspondence, online, and face-to-face 
service. GAO has reported that in recent years IRS has absorbed 
significant budget cuts and struggled to provide quality service. In 
response, IRS has taken steps, including eliminating some services and 
implementing a new risk management process. GAO assessed IRS's (1) 
2014 filing season performance, including how it compares itself to 
best practices; (2) efforts to evaluate the effectiveness of 2014 
service changes; and (3) actions to manage risk for filing season 
operations, among other objectives. GAO analyzed IRS documents and 
data, visited IRS facilities, and interviewed IRS officials and 
external stakeholders. 

What GAO Found: 

The Internal Revenue Service's (IRS) processing of tax returns was 
timely, even though the filing season was delayed due to the 2013 
government shutdown. Continued growth in e-filing allows IRS to reduce 
costs and issue refunds faster. Although IRS received fewer calls in 
2014, the percentage of callers seeking help who received it remained 
low and wait times remained high compared to prior years. 

Figure: Call Volume to IRS's Taxpayer Service Telephone Lines and IRS 
Full-Time Equivalents (FTE) Devoted to Telephone Service, Fiscal Years 
2009 through 2014: 

[Refer to PDF for image: multiple line graph] 

Volume of calls to IRS's taxpayer service lines (in millions): 

Fiscal year: 2009; 
Caller abandons and IRS disconnects or busies: 36.2; 
Automated calls answered: 29; 
Calls answered by assistors: 39; 
Full-time equivalents (FTE) - telephone: 9,334. 

Fiscal year: 2010; 
Caller abandons and IRS disconnects or busies: 32.4; 
Automated calls answered: 35.1; 
Calls answered by assistors: 36.7; 
Full-time equivalents (FTE) - telephone: 9,439. 

Fiscal year: 2011; 
Caller abandons and IRS disconnects or busies: 36.2; 
Automated calls answered: 42.3; 
Calls answered by assistors: 34.2; 
Full-time equivalents (FTE) - telephone: 8,840. 

Fiscal year: 2012; 
Caller abandons and IRS disconnects or busies: 41; 
Automated calls answered: 59.2; 
Calls answered by assistors: 30.8; 
Full-time equivalents (FTE) - telephone: 8,224. 

Fiscal year: 2013; 
Caller abandons and IRS disconnects or busies: 44.2; 
Automated calls answered: 54; 
Calls answered by assistors: 30.1; 
Full-time equivalents (FTE) - telephone: 7,726. 

Fiscal year: 2014; 
Caller abandons and IRS disconnects or busies: 35.1; 
Automated calls answered: 40.8; 
Calls answered by assistors: 23.1; 
Full-time equivalents (FTE) - telephone: 6,915. 

Source: GAO analysis of IRS data. GAO-15-163. 

[End of figure] 

One way to improve taxpayer telephone service is to compare it to the 
best in business, as required by Congress and executive orders. 
However, IRS has not systematically made such a comparison for its 
telephone service because of budget constraints and difficulty in 
identifying comparable organizations, according to IRS officials. By 
not comparing itself to other call center operations, IRS is missing 
an opportunity to identify and address gaps between actual and desired 
service, and inform Congress about resources needed to close the gap. 
More efficient telephone service could help improve correspondence 
service because the same staff provides those services. 

IRS did not set numerical goals-—such as a reduction in wait time—-or 
develop a plan to assess the effects of its 2014 service changes. Such 
information would help Congress, IRS managers, and others understand 
the benefits and potential budget tradeoffs associated with IRS 
service changes. This is important because IRS has identified 
additional service changes for 2015 and beyond. 

IRS used its new enterprise-wide risk management approach to identify 
risks such as staffing and training. IRS has made good progress in 
setting up its risk management process. However, while risks were 
identified and countermeasures discussed, such as contingency plans 
and workload adjustments, most countermeasures were not specific. 
Without specific countermeasures identified in advance, IRS's ability 
to respond to adverse events may be hampered. 

What GAO Recommends: 

GAO recommends IRS systematically compare telephone service to the 
best in business, develop measures and a plan to analyze service 
changes, and include specific countermeasures in risk management plans. 

IRS disagreed with comparing its telephone service to the best in 
business stating it (1) is not comparable to other organizations and 
(2) has done targeted comparisons. GAO disagrees. In its view, the 
recommendation remains valid and benchmarking all aspects of service 
to the best in business could help IRS improve its service. IRS agreed 
to develop measures and a plan to analyze service changes. It neither 
agreed nor disagreed to include specific countermeasures in its risk 
management plans. 

View [hyperlink, http://www.gao.gov/products/GAO-15-163]. For more 
information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Return Processing Was Timely and IRS Continued to Shift Taxpayers to 
Lower Cost Services, but Opportunities Exist to Improve Telephone 
Service: 

IRS Did Not Develop Measurable Goals or an Analysis Plan to Evaluate 
the Effectiveness of 2014 Service Changes, Which Could Inform Planned 
Changes for 2015: 

IRS Used its New Enterprise Risk Management Process to Identify Major 
Risks for the 2015 Filing Season, but Management Plans Lack 
Specificity: 

IRS Has Implemented Six Filing Season Recommendations but Some 
Significant Ones Remain Open: 

Conclusion: 

Recommendations for Executive Action: 

Agency Comments and Our Response: 

Appendix I: Individual Income Tax Returns and Refunds Processed, 2009 
through 2014: 

Appendix II: Full-Time Equivalent (FTE) Data for Telephone, 
Correspondence, Submission Processing and Other Categories, Fiscal 
Years (FY) 2009 through 2014: 

Appendix III: IRS Call Volume and Telephone Service Goals and 
Performance, Fiscal Years (FY) 2009 through 2014: 

Appendix IV: Costs for Calls Answered by IRS Assistors and Automated 
Services and Average Handle Time with Assistors, Filing Seasons 2009 
through 2014: 

Appendix V: Use of IRS Website and Online Services, Fiscal Years (FY) 
2009 through 2014: 

Appendix VI: Services Offered at IRS Taxpayer Assistance Centers (TAC) 
and Volunteer Sites, Fiscal Years (FY) 2009 Through 2014: 

Appendix VII: GAO Assessment of IRS's Efforts to Evaluate the 
Effectiveness of Changes to Taxpayer Services: 

Appendix VIII: GAO Analysis of Expected and Actual Outcomes for IRS's 
2014 Service Changes: 

Appendix IX: Selected Excerpts From IRS's Risk Registers: 

Appendix X: Prior GAO Filing Season Recommendations Implemented by IRS: 

Appendix XI: Prior Filing Season-Related GAO Recommendations That 
Remain Open: 

Appendix XII: Prior Filing-Season Related GAO Recommendations Related 
to Improving Web Services Remaining Open: 

Appendix XIII: Matters for Congressional Consideration for Enhanced 
Math Error Authority: 

Appendix XIV: Comments from the Internal Revenue Service: 

Appendix XV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Individual Tax Returns Prepared at Volunteer Sites and 
through Free File, Fiscal Years 2009 through 2014: 

Table 2: IRS's Risk Management Efforts Compared to GAO Risk Management 
Criteria: 

Table 3: Individual Income Tax Returns and Refunds Processed from 2009 
through 2014: 

Table 4: GAO Assessment of IRS's Efforts to Evaluate the Effectiveness 
of Changes to Taxpayer Services: 

Table 5: GAO Analysis of IRS's 2014 Service Initiatives' Expected and 
Actual Outcomes: 

Table 6: Implemented GAO Recommendations to IRS Related to the Filing 
Season: 

Table 7: Open GAO Recommendations to IRS Related to Filing Season: 

Table 8: Open GAO Recommendations Related to a Long-Term Strategy for 
Improving IRS Web Services: 

Table 9: Status of GAO Matters for Congressional Consideration 
Concerning MEA for IRS: 

Figures: 

Figure 1: Numbers of Individual Tax Returns Processed and Full-Time 
Equivalents (FTE) Devoted to Submission Processing, Fiscal Years 2009 
through 2014: 

Figure 2: Call Volume to IRS's Taxpayer Service Telephone Lines and 
IRS FTEs Devoted to Telephone Service at IRS, Fiscal Years 2009 
through 2014: 

Figure 3: IRS Telephone Level of Service and Average Telephone Wait 
Times, Fiscal Years 2009 through 2014: 

Figure 4: Trends in Taxpayer Correspondence Overage and IRS FTEs Used 
for Correspondence, Fiscal Years 2009 through 2014: 

Figure 5: Trends in Total Contacts and FTEs Used for IRS Taxpayer 
Assistance Centers, Fiscal Years 2009 through 2014: 

Figure 6: IRS FTEs Responsible for Telephone, Correspondence, 
Submission Processing and Other Categories, Fiscal Years 2009 through 
2014: 

Abbreviations: 

ACA: Affordable Care Act: 

EIN: Employee Identification Number: 

ERM: Enterprise Risk Management: 

ESC: Executive Steering Committee: 

e-filed: electronically filed: 

FATCA: Foreign Account Tax Compliance Act: 

FSR: Filing Season Readiness: 

FTE: Full-time Equivalent: 

FY: Fiscal Year: 

GPRA: Government Performance and Results Act of 1993: 

GPRAMA: GPRA Modernization Act of 2010: 

HCERA: Health Care and Education Reconciliation Act of 2010: 

ICMM: International Compliance Management Model: 

IRS: Internal Revenue Service: 

IT: Information Technology: 

ITIN: Individual Taxpayer Identification Number: 

MEA: Math Error Authority: 

MeF: Modernized e-File: 

OMB: Office of Management and Budget: 

OPCI: Office of Program Coordination and Integration: 

PPACA: Patient Protection and Affordable Care Act: 

PPS: Practitioner Priority Service: 

TAC: Taxpayer Assistance Center: 

VITA: Volunteer Income Tax Assistance: 

W&I: Wage and Investment: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

December 16, 2014: 

The Honorable Ron Wyden: 
Chairman: 
The Honorable Orrin Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Charles W. Boustany, Jr.
Chairman: 
The Honorable John Lewis: 
Ranking Member: 
Subcommittee on Oversight: 
Committee on Ways and Means: 
House of Representatives: 

The tax filing season is an enormous undertaking during which the 
Internal Revenue Service (IRS) processes more than 140 million 
individual tax returns, issues hundreds of billions of dollars in 
refunds, and provides telephone, correspondence, online, and face-to-
face services to tens of millions of taxpayers. For fiscal year 2014, 
IRS was appropriated about $2.2 billion for processing tax returns and 
providing taxpayer services (about 19 percent of its total 
appropriation). 

Since fiscal year 2010, IRS has absorbed approximately $900 million in 
budget cuts, resulting in significant staffing declines. Performance 
has declined in both enforcement and taxpayer services including 
telephone and correspondence services. To address budget constraints 
and performance issues, IRS has for years pursued a strategy of 
shifting taxpayers from labor intensive services such as assistor 
answered phone calls and paper correspondence to lower cost services 
such as online assistance.[Footnote 1] In 2014, IRS more aggressively 
followed the same strategy including reducing and eliminating services 
in six areas, such as return preparation at walk-in sites. 

Performance during the 2014 filing season has implications for 2015. 
According to the IRS Commissioner, IRS's 2015 filing season will be 
occurring in an environment that presents significant risks. The risks 
result, in part, from the current levels of resources and performance 
but also because IRS will have major new tax administration 
responsibilities in 2015. IRS is one of several agencies responsible 
for implementing provisions of the Patient Protection and Affordable 
Care Act (PPACA).[Footnote 2] Risk management is a strategy to help 
agency officials make decisions about identifying and assessing risks, 
allocating resources, and taking actions to manage risks. 

Finally, IRS's uneven filing season performance--coupled with its new 
responsibilities--highlight the importance of implementing our past 
filing season recommendations to IRS and suggestions to Congress 
regarding possible legislative action. If implemented, these 
recommendations and suggestions could help IRS more effectively manage 
its operations and achieve some savings over time. 

In this context, you asked us to review IRS's 2014 tax filing season 
performance. This report (1) assesses how well IRS processed 
individual income tax returns and provided telephone and other 
assistance compared to its 2014 goals and past performance, as well as 
how it compares itself to best practices; (2) assesses IRS's actions 
to evaluate expected and actual outcomes for the six service changes 
implemented in 2014; (3) assesses IRS's actions to manage risk for 
filing season operations; and (4) describes IRS's actions to implement 
our prior recommendations. 

To assess IRS's filing season performance, we: 

* obtained and analyzed IRS documents and data, including performance 
and workload data, for return processing and taxpayer services, and 
used this information to compare IRS's performance from fiscal years 
2009 through 2014 and agency goals to identify trends and anomalies; 

* visited IRS facilities, including the Joint Operations Center (which 
manages IRS's telephone operations) and an IRS walk-in site (both in 
Atlanta, Georgia) to better understand IRS's operations; 

* obtained and analyzed IRS reports and documents including those 
which were on a study that it had undertaken to evaluate a telephone 
performance standard; 

* identified federal standards for evaluating performance and compared 
IRS actions to those; 

* interviewed external stakeholders, including representatives from 
tax preparation and software firms, who interact with IRS on key 
aspects of the filing season and representatives from customer service 
trade organizations to identify best practices; and: 

* interviewed officials from IRS's Wage and Investment (W&I) division 
(which is responsible for managing filing season operations) and tax 
administration experts from major tax preparation firms to obtain 
contextual information about IRS's performance, including the effect 
of the October 2013 federal government shutdown and efforts to improve 
taxpayer services. 

To assess IRS's actions to evaluate expected and actual outcomes for 
the six service reductions or eliminations implemented in 2014, we: 

* obtained and analyzed IRS information and data, including full-time 
equivalent (FTE) and performance data for IRS's taxpayer services; 
[Footnote 3] 

* interviewed officials from IRS's Excellence through Productivity 
Improvement and Quality group (which is responsible for managing the 
service initiatives), tax administration experts including major tax 
preparation firms, and the National Taxpayer Advocate to obtain 
contextual information about IRS's performance, including the effect 
of the service limitations and reductions to improve taxpayer 
services; and: 

* reviewed GAO guidance on designing evaluations and assessing program 
effectiveness, and used these criteria to evaluate IRS's expected and 
actual outcomes for the service changes implemented in 2014. 

To assess IRS's risk management activities, we: 

* obtained and analyzed IRS documents that identified risks that could 
affect the filing season, including the Filing Season Action Plan, the 
PPACA, the Foreign Account Tax Compliance Act (FATCA),[Footnote 4] and 
W&I Risk Registers as well as guidance and working drafts used to 
develop the risks and management actions;[Footnote 5] 

* interviewed IRS officials in W&I, the Enterprise Risk Management 
(ERM) office, and Filing Season Readiness (FSR) Executive Steering 
Committee (ESC) to confirm our understanding of the policies and 
procedures regarding IRS's risk management process; 

* compared the actions IRS has taken as part of its risk management 
process to identified risks and associated management approaches 
listed in the PPACA, FATCA, and W&I Risk Registers to the criteria 
outlined by GAO's risk management approach;[Footnote 6] and: 

* compared the FSR ESC action plan process--which while not part of 
the risk management process, also identifies risks that could affect 
filing season operations--to the criteria cited above and limited our 
scope to only those risks that were the responsibility of W&I. 

To describe IRS's actions to implement our prior recommendations, we 
obtained information from IRS officials and reviewed relevant 
documentation, including the IRS Joint Audit Management Enterprise 
System reports, which track IRS actions taken to implement our 
recommendations. We then determined which recommendations were 
implemented. We also searched the GAO Engagement Reporting System to 
identify our prior recommendations for executive action and open 
matters for congressional consideration. 

To identify limitations and assess data reliability, we reviewed IRS 
data and documentation, interviewed IRS officials about computer 
systems and data limitations, and compared those results to our data 
reliability standards. We interviewed Treasury Inspector General for 
Tax Administration staff who worked on past reports relevant to our 
work to identify data sources and better interpret IRS's data. We 
consider the data presented in this report to be sufficiently reliable 
for our purposes. 

We conducted this performance audit from February 2014 through 
December 2014 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Background: 

Return Processing and Other Services: 

During the tax filing season, IRS processes paper and electronically 
filed (e-filed) tax returns and validates key pieces of information, 
such as a taxpayer's name and social security number.[Footnote 7] The 
overwhelming majority of returns are e-filed.[Footnote 8] Eligible 
taxpayers may use IRS's Free File program to prepare and e-file their 
federal tax returns online for free.[Footnote 9] In addition to return 
processing, IRS offers the following services: 

Telephone service for tax law and account questions: Taxpayers can 
speak with an IRS assistor to obtain information about their accounts 
or to ask tax law questions. Taxpayers can also listen to recorded tax 
information using automated telephone menus. In 2010, we recommended 
that IRS determine a telephone standard based on the quality of 
service provided by comparable organizations, what matters most to the 
customer, and resources required to achieve this standard based on 
input from Congress and other stakeholders.[Footnote 10] IRS 
disagreed, saying its current process of developing a planned level of 
telephone service takes into consideration many factors, including its 
resource availability and assumptions about call demand. We noted, 
however, that such a standard would allow IRS to communicate to 
Congress what it believes constitutes good service. Furthermore, since 
2010, the IRS Oversight Board--an independent body charged to provide 
IRS with long-term guidance and direction--has said than an acceptable 
level of service should be about 80 percent, but IRS has yet to set 
such a standard. 

Correspondence: IRS assistors are also responsible for responding to 
paper correspondence from taxpayers. IRS tries to respond to paper 
correspondence within 45 days of receipt; otherwise, such 
correspondence is considered "overage." Minimizing overage 
correspondence is important because delayed responses may prompt 
taxpayers to write again or call. According to IRS, the top three 
reasons taxpayers write relate to balance due payoffs, penalty 
abatements, and miscellaneous account inquiries.[Footnote 11] 

Online services: IRS's website is a low-cost method for providing 
taxpayers with basic interactive tools to, for example, check refund 
status, view and print transcripts, make payments and apply for 
installment agreements. In response to recommendations in our April 
2013 report, IRS said that a long-term online strategy for improving 
web services will be completed in February 2015.[Footnote 12] 

Face-to-face assistance: Taxpayers can obtain face-to-face assistance 
at IRS's 390 Taxpayer Assistance Centers (TAC), also known as walk-in 
sites, or at more than 13,000 sites staffed by volunteer partners. At 
TACs, IRS staff answer basic tax law questions, review and adjust 
taxpayer accounts, take payments, authenticate Individual Taxpayer 
Identification Number (ITIN) applicants and assist identity theft 
victims. At the sites staffed by volunteers, taxpayers can receive 
return preparation assistance as well as financial literacy 
information. 

Service Changes in 2014: 

In 2012, we reported that despite regularly realizing efficiency 
gains, IRS was struggling to provide quality services to taxpayers. We 
showed that increases in the demand for services have offset the 
efficiency gains and that unless IRS made tough choices about what 
services to provide, performance would likely continue to 
suffer.[Footnote 13] For fiscal year 2014, IRS reduced or eliminated 
certain telephone and walk-in services. IRS officials reported they 
chose these reductions and eliminations because taxpayers had other 
options for these services. Specifically, IRS took the following 
actions: 

1. limited telephone assistance to only basic tax law questions during 
the filing season and reassigned assistors to work account-related 
inquiries; 

2. launched the "Get Transcript" tool, which allows taxpayers to 
obtain a viewable and printable transcript on IRS.gov and redirected 
taxpayers to automated tools for additional guidance; 

3. redirected refund-related inquiries to automated services and did 
not answer refund inquiries until 21 days after a tax return was filed 
electronically or 6 weeks after a return was filed by paper (unless 
the automated service directed the taxpayer to contact IRS); 

4. limited access to the Practitioner Priority Service line to only 
those practitioners working tax account issues; 

5. limited live assistance and redirected requests for domestic 
employer identification numbers to IRS's online tool; and: 

6. eliminated free return preparation and reduced other services at 
IRS's walk-in sites. 

Risk Management: 

To address challenges including the requirements of PPACA and other 
responsibilities, IRS has recently established an agency-wide risk 
management program office.[Footnote 14] While IRS previously had a 
process to manage risk as part of the annual filing season, the agency 
is now standing up a process to address enterprise risk. Risk 
management is a tool for assessing risks, evaluating alternative 
management approaches, deciding which management approaches to take, 
and then implementing and monitoring the management steps. The goal is 
develop a mechanism that can be used to inform agency officials and 
decision makers of potential risks, and evaluate alternative 
countermeasures to reduce risk being considered along with associated 
costs. IRS's ability to identify problems and address them with 
countermeasures will be crucial in having a successful filing season 
in 2015. 

Return Processing Was Timely and IRS Continued to Shift Taxpayers to 
Lower Cost Services, but Opportunities Exist to Improve Telephone 
Service: 

Increases in Electronic Filing Continue to Generate Savings: 

IRS delayed the beginning of the 2014 filing season because the 
government shutdown compressed the agency's preparation time.[Footnote 
15] Despite this delay, IRS officials and stakeholders--such as large 
tax preparation firms--reported relatively smooth processing, in part, 
because there were fewer tax law changes that resulted in fewer system 
and form updates compared to previous years. As of September 26, 2014, 
IRS had achieved an 85 percent e-file rate for individual returns and 
processed 7 percent fewer paper returns compared to last year (see 
figure 1). Compared to 2009, paper returns have fallen by 51 percent, 
from 45 million to 22 million. See appendix I for additional data on 
return and refund processing. 

Figure 1: Numbers of Individual Tax Returns Processed and Full-Time 
Equivalents (FTE) Devoted to Submission Processing, Fiscal Years 2009 
through 2014: 

[Refer to PDF for image: multiple line graph] 

Number of individual tax returns processed (in millions): 

Fiscal year: 2009; 
Electronic returns: 94; 
Paper returns: 45; 
Total: 139; 
FTE – submission processing: 11,360. 

Fiscal year: 2010; 
Electronic returns: 97; 
Paper returns: 40; 
Total: 137
FTE – submission processing: 11,067. 

Fiscal year: 2011; 
Electronic returns: 109; 
Paper returns: 30; 
Total: 140; 
FTE – submission processing: 9,941. 

Fiscal year: 2012; 
Electronic returns: 116; 
Paper returns: 26; 
Total: 142; 
FTE – submission processing: 9,157. 

Fiscal year: 2013; 
Electronic returns: 119; 
Paper returns: 23; 
Total: 142; 
FTE – submission processing: 9,086. 

Fiscal year: 2014; 
Electronic returns: 122; 
Paper returns: 22; 
Total: 144; 
FTE – submission processing: 8,626. 

Source: GAO analysis of IRS data. GAO-15-163. 

Note: Submission processing processes paper and electronically 
submitted tax returns and supplemental documents, accounts for tax 
revenue, processes information documents, and issues refunds and tax 
notices. 

As of October 21, 2014, data on the number of returns processed for 
fiscal year 2014 were available from January 1 through September 26, 
2014. 

[End of figure] 

As we have previously reported, continued increases in electronic 
filing are important because they allow taxpayers to receive refunds 
faster, are less prone to transcription and other errors, and reduce 
IRS's costs.[Footnote 16] Between fiscal years 2009 and 2014, as seen 
in figure 1, the number of FTEs devoted to processing decreased by 
approximately 24 percent--from 11,360 in 2009 to 8,626 in 2014. Since 
2003, IRS has reduced the number of paper processing sites from eight 
to three: Fresno, California; Kansas City, Missouri; and Austin, 
Texas.[Footnote 17] According to IRS officials, this consolidation has 
been a key element in the agency's ongoing program to streamline 
operations, improve customer satisfaction, and achieve savings through 
reductions in rent and labor costs.[Footnote 18] 

Despite Decreases in Call Volume and Continued Success Shifting Calls 
to Automated Services, Access to Live Assistors Remained Low and Wait 
Times Remained High Compared to Prior Years: 

Between fiscal years 2009 and 2014, as shown in figure 2, 

* Call volume to IRS's taxpayer service lines varied, and was the 
lowest in 2014. IRS attributed 2014's overall decline in call volume 
in part to smooth tax return and refund processing, which results in 
fewer phone calls about return errors and delayed refunds. IRS also 
attributed the decline to its efforts to limit or eliminate assistor-
based services and direct taxpayers to self-service options. See 
appendix III for call volume and telephone service performance and 
goals since fiscal year 2009. 

* IRS significantly reduced FTEs devoted to answering telephones--from 
about 9,300 to about 6,900--a 26 percent decrease. 

* IRS answered about 41 percent more calls using automated assistance. 
Calls answered by IRS assistors fell to its lowest level in 5 years. 
Answering as many calls as possible through automation is a 
significant efficiency gain because IRS estimates that it costs 38 
cents per call to provide an automated answer, but about $42 per call 
to use a live assistor--a 27 percent increase over 2013 (see appendix 
IV).[Footnote 19] Its costs per call grew over the past year partly 
because there was a bigger decline in the number of calls answered 
than the number of FTEs assigned to answer those calls. According to 
IRS officials, fewer calls were answered using live assistance because 
of efforts to reduce assistor-based services and because there were 
fewer PPACA-related calls than expected. In addition, average handle 
time increased from 11.8 to 12.5 minutes per call (about 6 percent) 
from 2013 (see appendix III).[Footnote 20] These increases highlight 
the importance of IRS efforts to drive people to other sources such as 
web-based services. 

* More than a third of calls ended with the taxpayer hanging up, 
receiving a busy signal, or being disconnected before reaching an 
assistor.[Footnote 21] Taxpayers who cannot initially reach IRS may 
need to spend additional time redialing and waiting for assistance. 
Further, while taxpayers can obtain tax law assistance through 
alternative sources--such as tax attorneys or tax preparation firms--
taxpayers who have account questions that only IRS can answer must 
either wait to get assistance via telephone or pursue help from IRS 
through some other means, such as through sending correspondence to 
IRS or visiting TACs. 

Figure 2 illustrates aspects of IRS telephone service. 

Figure 2: Call Volume to IRS's Taxpayer Service Telephone Lines and 
IRS FTEs Devoted to Telephone Service at IRS, Fiscal Years 2009 
through 2014: 

[Refer to PDF for image: multiple line graph] 

Volume of calls to IRS's taxpayer service lines (in millions): 

Fiscal year: 2009; 
Caller abandons and IRS disconnects or busies: 36.2; 
Automated calls answered: 29; 
Calls answered by assistors: 39; 
Full-time equivalents (FTE) - telephone: 9,334. 

Fiscal year: 2010; 
Caller abandons and IRS disconnects or busies: 32.4; 
Automated calls answered: 35.1; 
Calls answered by assistors: 36.7; 
Full-time equivalents (FTE) - telephone: 9,439. 

Fiscal year: 2011; 
Caller abandons and IRS disconnects or busies: 36.2; 
Automated calls answered: 42.3; 
Calls answered by assistors: 34.2; 
Full-time equivalents (FTE) - telephone: 8,840. 

Fiscal year: 2012; 
Caller abandons and IRS disconnects or busies: 41; 
Automated calls answered: 59.2; 
Calls answered by assistors: 30.8; 
Full-time equivalents (FTE) - telephone: 8,224. 

Fiscal year: 2013; 
Caller abandons and IRS disconnects or busies: 44.2; 
Automated calls answered: 54; 
Calls answered by assistors: 30.1; 
Full-time equivalents (FTE) - telephone: 7,726. 

Fiscal year: 2014; 
Caller abandons and IRS disconnects or busies: 35.1; 
Automated calls answered: 40.8; 
Calls answered by assistors: 23.1; 
Full-time equivalents (FTE) - telephone: 6,915. 

Source: GAO analysis of IRS data. GAO-15-163. 

[End of figure] 

As telephone staffing fell, in fiscal year 2014 IRS's performance in 
providing live telephone assistance--referred to as the level of 
service--remained low compared to recent years at about 64 percent 
(see figure 3).[Footnote 22] This is considerably lower than the 82 
percent level of service IRS achieved in 2005.[Footnote 23] It is also 
well below the 80 percent level of service considered acceptable by 
the IRS Oversight Board.[Footnote 24] While during the filing season 
IRS's level of service was about 70 percent or slightly higher, this 
rate also is still well below past performance. 

IRS has requested additional funding to deliver a targeted level of 
service. For instance, in its fiscal year 2015 congressional 
justification, IRS requested a 10 percent increase in FTEs to deliver 
a telephone level of service of 71 percent. 

One of IRS's expected outcomes of its fiscal year 2014 service changes 
was to improve wait time for telephone service. However, in fiscal 
year 2014, taxpayers had to wait more than twice as long to speak with 
someone as they did in fiscal year 2009, when the average wait time 
was about 9 minutes (see figure 3). Wait times increased in part 
because IRS devoted fewer FTEs to answering telephones and because the 
average handle time increased (see appendix IV). This is important 
because taxpayers must call IRS or visit walk-in sites for certain 
account-related information that they cannot access online. 

Figure 3: IRS Telephone Level of Service and Average Telephone Wait 
Times, Fiscal Years 2009 through 2014: 

[Refer to PDF for image: multiple line graph] 

Fiscal year: 2009; 
Percentage of callers seeking and receiving live assistance (level of 
service): 70%; 
Average telephone wait times: 8.8 minutes. 

Fiscal year: 2010; 
Percentage of callers seeking and receiving live assistance (level of 
service): 74%; 
Average telephone wait times: 10.8 minutes. 

Fiscal year: 2011; 
Percentage of callers seeking and receiving live assistance (level of 
service): 70.1%; 
Average telephone wait times: 13.0 minutes. 

Fiscal year: 2012; 
Percentage of callers seeking and receiving live assistance (level of 
service): 676.6%; 
Average telephone wait times: 16.7 minutes. 

Fiscal year: 2013; 
Percentage of callers seeking and receiving live assistance (level of 
service): 60.5%; 
Average telephone wait times: 17.6 minutes. 

Fiscal year: 2014; 
Percentage of callers seeking and receiving live assistance (level of 
service): 64.4%; 
Average telephone wait times: 19.6 minutes. 

Source: GAO analysis of IRS data. GAO-15-163. 

[End of figure] 

For a number of years, IRS assistors have answered tax law and account-
related inquiries with more than 90 percent accuracy in part because 
IRS uses interactive tools to help prompt and direct assistors to 
provide more accurate and consistent responses to taxpayers (see 
appendix III). This trend continued in fiscal year 2014, with a 95 
percent accuracy rate for tax law inquires and a 96 percent accuracy 
rate for account-related inquiries (with confidence intervals of 90 
percent). IRS was able to maintain this high rate of accuracy even 
though the government shutdown delayed hiring and caused IRS to 
increase its reliance on just-in-time training.[Footnote 25] 

In recent years, the type of telephone calls IRS receives and answers 
has changed. Specifically, the number of tax law inquiries has 
somewhat decreased and a slightly greater portion of calls are account 
related. This is due in part to such efforts as limiting the scope of 
tax law inquiries it answered in 2014. The shift in the types of calls 
answered by IRS assistors may explain at least in part the increase in 
telephone wait times as shown in figure 3. Taxpayers have alternative 
sources of information for tax laws inquiries, such as from tax 
software or a paid tax preparer. Taxpayers with questions about their 
accounts, however, may have no choice but to speak to an IRS assistor. 

IRS May Be Missing Opportunities to Improve Telephone Service by Not 
Systematically Comparing Its Telephone Service to the Best in the 
Business: 

Comparing performance data on calls answered by IRS assistors to the 
best in the business can help IRS understand taxpayer needs and 
improve service.[Footnote 26] Both Congress and the executive branch 
have taken action to improve customer service. The GPRA Modernization 
Act of 2010 (GPRAMA) requires agencies to, among other things, 
establish a balanced set of performance indicators to be used in 
measuring or assessing progress toward each performance goal, 
including, as appropriate, customer service.[Footnote 27] In addition, 
Executive Order 12862, Setting Customer Service Standards, requires 
that all executive departments and agencies that "provide significant 
services directly to the public shall provide those services in a 
manner that seeks to meet the customer service standard established" 
which is "equal to the best in business."[Footnote 28] Most recently, 
Executive Order 13571, Streamlining Service Delivery and Improving 
Customer Service, was issued to strengthen customer service and 
required agencies to develop and publish a customer service plan, in 
consultation with the Office of Management and Budget (OMB).[Footnote 
29] Finally, OMB has issued memorandums and guidance to agencies 
identifying a number of actions to improve customer service, including 
setting, communicating, and using customer service standards.[Footnote 
30] Most recently, in July 2014, to help agency leadership focus on 
this issue, OMB issued guidance that agencies include additional 
customer service information with their fiscal year 2016 budget 
submissions.[Footnote 31] 

IRS has taken some steps towards conforming to federal customer 
service standards by, for example, having a suite of performance 
measures for its telephone and other key operations. It also has 
worked with its W&I research analysis group on a variety of issues 
including call demand forecasting. However, we found that IRS has not 
systematically benchmarked its telephone (customer) service to the 
best in business. Specifically, IRS conducted one study that focused 
on its level of service, benchmarking its measures to seven private 
and public sector organizations and enabling it to identify options 
for modifying the level of service measure. However, it has not 
regularly compared its suite of performance measures to those used by 
comparable organizations. Further, it has not benchmarked its actual 
performance against goals achieved by other organizations with large-
scale call center operations to determine whether there are 
opportunities to improve telephone service provided by live assistors. 
IRS officials cite budget constraints and difficulty in identifying 
organizations (other than the Social Security Administration) that are 
comparable in size, complexity, and uniqueness as reasons they have 
not systematically compared IRS's telephone service performance 
against the best in the business. 

By not comparing customer service performance against the best in the 
business, IRS is missing an opportunity to identify and address gaps 
in actual and desired service and inform Congress about resources 
needed to improve the level of service provided to taxpayers. We have 
previously reported on IRS's budgetary constraints.[Footnote 32] While 
reduced funding has resulted in fewer resources available to IRS, a 
better understanding of the nature and size of service gaps could help 
it provide the best service possible with declining resources. 

Overage Correspondence Continued to Increase and FTEs Stayed about the 
Same: 

In 2010, we concluded that providing timely responses to paper 
correspondence is a critical part of taxpayer service because if IRS's 
responses take too long taxpayers may write again or call IRS for 
additional assistance. We recommended that IRS establish a performance 
measure that includes providing timely correspondence service to 
taxpayers. IRS agreed and started using more detailed performance 
measures, including an overaged timeliness measure for its 
correspondence.[Footnote 33] 

These performance measures indicated that the time it takes IRS to 
respond to correspondence has continually increased since fiscal year 
2009. Taxpayers sent IRS somewhat less correspondence between fiscal 
years 2013 and 2014 (21 million and 20 million, respectively), yet 
total overage stayed close to 50 percent during the same period. While 
total overage slightly increased, IRS devoted about 2 percent more 
FTEs for responding to correspondence (see figure 4). As noted 
earlier, IRS assistors are responsible for both telephone and 
correspondence duties. Consequently, IRS's performance in responding 
to correspondence is dependent on the volume and length of telephone 
calls answered by assistors and the volume of work that is shifted to 
automated services. According to IRS officials, shifting calls to 
automated lines enabled IRS to better focus assistors' efforts on 
taxpayer services that require live assistance. Since assistors also 
respond to correspondence, shifting calls also enabled them to devote 
more time to correspondence. 

Figure 4: Trends in Taxpayer Correspondence Overage and IRS FTEs Used 
for Correspondence, Fiscal Years 2009 through 2014: 

[Refer to PDF for image: multiple line graph] 

Fiscal year: 2009; 
Taxpayer correspondence overage (end of fiscal year): 25%; 
FTE – correspondence: 4,713. 

Fiscal year: 2010; 
Taxpayer correspondence overage (end of fiscal year): 27%; 
FTE – correspondence: 4,556. 

Fiscal year: 2011; 
Taxpayer correspondence overage (end of fiscal year): 35%; 
FTE – correspondence: 4,665. 

Fiscal year: 2012; 
Taxpayer correspondence overage (end of fiscal year): 40%; 
FTE – correspondence: 5,545. 

Fiscal year: 2013; 
Taxpayer correspondence overage (end of fiscal year): 47%; 
FTE – correspondence: 5,494. 

Fiscal year: 2014; 
Taxpayer correspondence overage (end of fiscal year): 49%. 
FTE – correspondence: 5,584. 

Note: Aggregate data are from Accounts Management and Submission 
Processing, which jointly responds to IRS's taxpayer correspondence. 
The data cover equivalent periods for each fiscal year with slight 
variation in the exact dates depending on the year and data source. 

Source: GAO analysis of IRS data. GAO-15-163. 

[End of figure] 

New Self-Service Tools Helped Shift Demand to IRS's Website: 

IRS continued to make progress in directing more taxpayers to online 
resources and away from telephone and face-to-face services. Use of 
IRS's website reached approximately 440 million visits for fiscal year 
2014, 4 percent fewer than fiscal year 2013. IRS attributes this 
decrease to improved website design, which allowed visitors to 
accomplish their goal in fewer site visits. Use of IRS's website was 
slightly lower in fiscal year 2014 than the previous year partly due 
to fewer forms and publications being downloaded as a result of fewer 
tax law changes. 

For the 2014 filing season, IRS launched two new self-service web 
applications, Get Transcript and Direct Pay: 

* Get Transcript allows taxpayers to request and print tax transcripts 
online immediately. The taxpayer must first pass IRS's authentication 
process. The tool will not work for taxpayers who are filing for the 
first time, are victims of identity theft, or cannot remember the 
answers to IRS's authentication questions, such as the street address 
from the last tax return filed. Taxpayers may request for the 
transcript to be mailed, but must wait 5 to 10 days to receive it. Use 
of Get Transcript exceeded IRS's estimates of about 9 million 
requests. In fiscal year 2014, taxpayers used the application to 
request or view 19 million transcripts. This resulted in IRS receiving 
43 percent fewer requests through other channels.[Footnote 34] 

* Direct Pay allows taxpayers to electronically pay their tax bills or 
make quarterly estimated tax payments directly from checking or 
savings accounts without any fees or preregistration. IRS reported it 
processed more than 1 million payments totaling more than $1.7 billion 
through Direct Pay (as of September 10, 2014). IRS expected Direct Pay 
to help significantly reduce the millions of paper checks received 
each year. 

IRS reported that it has made progress in addressing our previous 
recommendations on improving its online service strategy. 
Specifically, IRS reported that it was in the process of developing a 
long-term strategy for improving web services for taxpayers and 
officials expected it to be released in early 2015. A long-term 
comprehensive strategy for online services will help ensure IRS is 
maximizing the benefit to taxpayers from this investment and reduce 
costs in other areas, such as for IRS's telephone operations. See 
appendix V for additional information on use of IRS's website. 

IRS Eliminated Return Preparation and Shifted Taxpayers from Taxpayer 
Assistance Centers to Volunteer Partners: 

Face-to-face assistance at IRS's Taxpayer Assistance Centers (TAC) and 
volunteer sites remains an important component of IRS's efforts to 
serve taxpayers, particularly those with low incomes. As part of its 
service changes for 2014, IRS eliminated return preparation at TACs 
and redirected taxpayers to volunteer sites and Free File. In fiscal 
year 2014, taxpayers visited TACs 5.4 million times, a decline of 
about 17 percent compared to the previous year. In almost half of 
those visits, taxpayers received assistance with account-related 
inquiries. Meanwhile, IRS assigned fewer field assistance staff to 
TACs in fiscal years 2010 through 2013 (see figure 5). 

Figure 5: Trends in Total Contacts and FTEs Used for IRS Taxpayer 
Assistance Centers, Fiscal Years 2009 through 2014: 

[Refer to PDF for image: multiple line graph] 

Total number of contacts (in millions): 

Fiscal year: 2009; 
Return preparation: 0.4; 
Tax law questions: 0.3; 
Account work notices: 3.2; 
Forms: 0.8; 
Payments: 0; 
Other: 1.5; 
FTE - field assistance: 2,222. 

Fiscal year: 2010; 
Return preparation: 0.4; 
Tax law questions: 0.3; 
Account work notices: 3.5; 
Forms: 0.6; 
Payments: 0; 
Other: 1.6; 
FTE - field assistance: 2,169. 

Fiscal year: 2011; 
Return preparation: 0.3; 
Tax law questions: 0.3; 
Account work notices: 3.7; 
Forms: 0.6; 
Payments: 0; 
Other: 1.5; 
FTE - field assistance: 2,120. 

Fiscal year: 2012; 
Return preparation: 0.4; 
Tax law questions: 0.2; 
Account work notices: 2.8; 
Forms: 0.6; 
Payments: 1.5; 
Other: 1.4; 
FTE - field assistance: 2,006. 

Fiscal year: 2013; 
Return preparation: 0.3; 
Tax law questions: 0.2; 
Account work notices: 3.1; 
Forms: 0.5; 
Payments: 1.3; 
Other: 1.2; 
FTE - field assistance: 1,896. 

Fiscal year: 2014; 
Return preparation: 0; 
Tax law questions: 0.1; 
Account work notices: 2.5; 
Forms: 0.4; 
Payments: 1.1; 
Other: 1.4; 
FTE - field assistance: 1,938. 

Source: GAO analysis of IRS data. GAO-15-163. 

Notes: Data cover equivalent periods for each fiscal year with slight 
variations in the exact dates depending on the year and data source. 

TAC return preparation counts include both individual and business 
contacts. Account work notices includes assistance to taxpayers who 
need to pay taxes owed and victims of identity theft. Beginning in 
fiscal year 2012, IRS accounted for contacts where taxpayers made 
payments separately from other account work notices. 

Other contacts include taxpayers responding to correspondence, 
scheduling appointments, obtaining Individual Taxpayer Identification 
Number (ITIN) authentication, providing self-assistance services, and 
other varied contacts which do not fall into the defined categories 
above. 

[End of figure] 

At the same time IRS eliminated return preparation at TACs, taxpayers 
increased their use of volunteer sites and Free File. IRS's 12,319 
volunteer partner sites prepared a little more than 3.6 million tax 
returns in fiscal year 2014--a 7 percent increase from the previous 
year. Use of Free File also increased, although use prior to 2014 had 
been decreasing (see table 1). See appendix VI for additional 
information on taxpayer use of TAC and volunteer site services. 

Table 1: Individual Tax Returns Prepared at Volunteer Sites and 
through Free File, Fiscal Years 2009 through 2014: 

Return preparation at volunteer sites: 
FY 2009: 3,047,622; 
FY 2010: 3,085,512; 
FY 2011: 3,188,524; 
FY 2012: 3,264,997; 
FY 2013: 3,406,182; 
FY 2014: 3,646,562; 
Percent change from FY 2013 to 2014: 7%. 

Free File: 
FY 2009: 3,299,292; 
FY 2010: 3,242,741; 
FY 2011: 3,173,891; 
FY 2012: 3,133,756; 
FY 2013: 2,970,945; 
FY 2014: 3,261,248; 
Percent change from FY 2013 to 2014: 10%. 

Source: GAO analysis of IRS data. GAO-15-163. 

[End of table] 

IRS Did Not Develop Measurable Goals or an Analysis Plan to Evaluate 
the Effectiveness of 2014 Service Changes, Which Could Inform Planned 
Changes for 2015: 

Our guidance on designing evaluations states that to appropriately 
assess program effectiveness, outcome measures must represent the 
nature of the expected program benefit.[Footnote 35] The outcome 
measures should cover key aspects of desired performance and should 
not be unduly influenced by factors outside the program's control. In 
addition, to know if a program directly resulted in the desired 
effect, the data collection and analysis plan must establish a link 
between the program and the expected result. 

IRS identified outcomes in the form of FTE savings and other service 
improvements such as improving telephone level of service. However, 
most of those outcomes did not specify measurable goals. For example, 
IRS planned to improve wait time, but did not state a numeric goal for 
reducing wait time. As a result, IRS's outcomes were not a clear 
representation of the nature of the expected program benefits. 

While IRS collected some data that it could use to evaluate 
effectiveness, it did not develop plans to analyze the data or track 
it in a way that would allow officials to draw causal connections and 
develop valid conclusions about the effectiveness of its 2014 service 
changes (see appendix VII for an assessment against our criteria and 
appendix VIII for our analysis of IRS's service changes). Without 
measurable goals and other analyses, IRS could not identify whether 
specific service improvements were a result of its service changes or 
other external influences on taxpayer behavior. For example, as 
discussed, wait time actually increased in 2014. While IRS sought to 
improve wait time, without setting a numeric goal that can be 
measured, it does not know the extent to which it was unable to meet 
its goal. Moreover, IRS does not know whether the increase in wait 
time was a result of external factors, or if wait time would have 
increased even more without its service changes. 

Without such information, it will be difficult for Congress, IRS 
management, and others to understand the benefits and potential budget 
trade-offs associated with IRS's service changes. This is important 
because IRS has identified additional ones for 2015 and beyond. 

In addition to maintaining the 2014 service changes, as of early 
September IRS had proposed the following for 2015: 

1. Redesign notices to clearly state why the notice was issued; if a 
response is required; what action, if any, is required; and inform 
taxpayers about online resources and self service tools as an 
alternative to calling or writing the IRS. 

2. Expand use of the Oral Statement Authority tool to reduce the 
amount of written correspondence to resolve penalty relief requests. 
[Footnote 36] 

3. Direct taxpayers who meet the Online Payment Agreement 
qualifications to use a tool online (and at kiosks where available) to 
apply and set up installment payment agreements instead of calling or 
visiting IRS. 

4. Reduce the volume of IRS products at TACs and community outlets, 
including forms, instructions, and publications that are available 
online at IRS.gov, and encourage taxpayers to use available online 
sources. 

5. More heavily promote electronic payment options, such as IRS Direct 
Pay, as an alternative to cash, check, or money order payments made at 
a TAC site or by mail. 

These service changes are examples of IRS's efforts to promote more 
technology-based services to serve the maximum number of taxpayers 
possible more effectively and efficiently. We have previously reported 
that, given the volume of taxpayers calling IRS and sending 
correspondence, shifting taxpayers to self-service tools, such as 
interactive automated telephone lines or IRS's website, is key to 
improving taxpayer services.[Footnote 37] If more taxpayers use self-
service tools, then fewer will need to speak to an IRS assistor and 
IRS's costs will fall. 

IRS Used its New Enterprise Risk Management Process to Identify Major 
Risks for the 2015 Filing Season, but Management Plans Lack 
Specificity: 

According to the Commissioner of Internal Revenue, implementation of 
new tax laws such as PPACA combined with a tight budget and the 
possibility of Congress passing a late package of tax extenders 
threatens to make 2015 "the most complicated filing season before us 
in a long time, if ever."[Footnote 38] At the enterprise level, in 
February 2014, IRS undertook a new approach to risk management in 
response to management failures related to applications for tax exempt 
status. In that effort, IRS established an Enterprise Risk Management 
(ERM) process that formalizes risk management across the organization. 

As part of the ERM process, IRS created several risk registers, 
including an enterprise risk register that consists of 15 broad 
emerging risk categories. The top two risks IRS identified were (1) 
staffing and training and (2) budget sufficiency. IRS ranked the 
emerging risk categories by highest to lowest likelihood and impact. 
Also as part of ERM, IRS developed two other enterprise-wide risk 
registers, one covering PPACA and the other FATCA. In addition, IRS 
developed a risk register for its W&I division, which is responsible 
for the filing season. The PPACA, FATCA, and W&I risk registers 
identify risks and list management activities that might affect the 
filing season. IRS plans to expand risk management procedures at the 
process level, such as filing season operations, in the future. IRS's 
ERM guidance notes that divisions and offices should determine 
appropriate risk management activities. 

Separate from the ERM process, IRS has a long-standing process to 
ensure filing season readiness. This process strongly mirrors our 
framework for risk management--including identifying risks, developing 
management actions, getting management concurrence, and implementing 
and monitoring those actions. The FSR Action Plan contains specific 
steps to undertake in response to critical tasks, given the budgetary 
constraints under which the filing season operates. 

While there is no established universally agreed upon set of 
requirements or processes for a risk management framework, we have 
previously developed one that can be used to inform agency officials 
and decision makers of the basic components of a risk management 
system or which can be used as a stand-alone guide.[Footnote 39] 
Consistent with our framework, risk management activities should 
evaluate alternative countermeasures to reduce risk being considered 
along with associated costs. Furthermore, evaluating alternative 
countermeasures should include specific countermeasures to reduce risk. 

Table 2 shows the results of our analysis of IRS enterprise risk 
management procedures and filing season procedures. 

Table 2: IRS's Risk Management Efforts Compared to GAO Risk Management 
Criteria: 

GAO risk management framework stages: Strategic goals, objectives, and 
constraints; 
GAO risk management framework criteria: Document (a) strategic goals 
and objectives of the initiative and (b) the steps needed to attain 
those results; 
Does IRS meet criteria: Yes; 
Status of IRS risk management effort: Enterprise level: IRS's 
enterprise risk register consists of 15 emerging risk categories 
including Staffing and Training; Budget Sufficiency; Changing/ 
Expanding Mission; Trust/Confidence; Customer Service; Operational and 
Technical Effectiveness; Morale; Physical Security; Information 
Security; Taxpayer Rights & Protections; Administration and Complexity 
of Laws/Regulations; Culture of Silos; Management Oversight; Tax Gap 
Components; and Stewardship of Taxpayer Dollars. The categories were 
retrofit to existing strategic goals. Risks listed in the PPACA, 
FATCA, and W&I risk registers list which risk category to which they 
relate, but not by strategic goal; 
Does IRS meet criteria: N/A; 
Status of IRS risk management effort: Process level: The FSR Action 
Plan is not directly tied to strategic goals because it is not part of 
the ERM process. 

GAO risk management framework stages: Risk assessment; 
GAO risk management framework criteria: Document standard operating 
procedures designed to identify (a) what can go wrong; (b) the 
likelihood of a risk occurring; and (c) the consequences of an 
occurrence; 
Does IRS meet criteria: Yes; 
Status of IRS risk management effort: Enterprise level: The PPACA, 
FATCA, and W&I risk registers contain risks affecting the 2015 filing 
season. Risks identified include resources being diverted due to PPACA 
phone traffic and PPACA forms not being developed in time for the 
filing season; 
Does IRS meet criteria: Yes; 
Status of IRS risk management effort: Process level: The FSR Action 
Plan assesses potential risks associated with, for example, tax forms 
and publications development and implementation of recruitment 
strategies to assist with filing season hiring, training strategy, and 
telephone routing and script changes. 

GAO risk management framework stages: Alternatives evaluation; 
GAO risk management framework criteria: Identify specific 
countermeasures to reduce risk and a process by which to evaluate 
potential mitigation strategies using a variety of criteria, 
particularly cost-benefit analyses; 
Does IRS meet criteria: Partially; 
Status of IRS risk management effort: Enterprise level: The listed 
management activities in the PPACA, FATCA, and W&I risk registers rely 
heavily on W&I managers to make future decisions when the adverse 
event occurs. The management activities do not contain specific 
countermeasures or cost-benefit analyses. For example, the following 
broad management activity "W&I Service Delivery Approach to evaluate 
services to ensure delivery of core service and to drive service to 
most efficient delivery method. Evaluate trade-off analysis and what 
to 'stop doing'" appeared several times. Because the ERM program is in 
its early stages, the specificity of countermeasures may improve over 
time; 
Does IRS meet criteria: Yes; 
Status of IRS risk management effort: Process level: The FSR Action 
Plan contains specific steps to address each action item. The Action 
Plan is a long-standing process. However, few high likelihood risks 
have arisen in recent years. 
One example is the "Affordable Care Act (ACA) Impacts to Information 
Return Receipt and Processing," which is behind schedule. The plan 
lists the following steps: 
* Participating in sessions with IT to discuss a new timeline for the 
form 1095 B&C; 
* Once timeline is established next step will be to identify where 
time savings is possible and identify "go live" date; 
* Attending weekly requirements session with e-service AD to outline 
new requirements for Phase II online application, ACA Information 
Return Application for Transmitter Control Code; 
* Attend ACA Gap Analysis - Information Returns working sessions; 
Conducting weekly Developing Team meetings; 
* Conduct weekly Electronic Submission of Form & Pub Development. 

GAO risk management framework stages: Management selection; 
GAO risk management framework criteria: Identify a consistent process 
by which an agency (a) selects a risk mitigation strategy; 
(b) allocates resources to pursue that strategy; 
and (c) documents decisions, including the rationale behind the 
decisions; 
Does IRS meet criteria: Too Early to Assess; 
Status of IRS risk management effort: Enterprise level: W&I executives 
hold biweekly meetings, but it is unclear as to the extent mitigations 
have been discussed because they lack specificity; 
Does IRS meet criteria: Yes; 
Status of IRS risk management effort: Process level: FSR team gets 
documented management concurrence of mitigation strategies. 

GAO risk management framework stages: Implementation and monitoring; 
GAO risk management framework criteria: The framework calls for 
documentation of processes to; (a) monitor progress of mitigation 
strategies and establish timelines; and; (b) detect failed strategies 
in need of revision; 
Does IRS meet criteria: Too Early to Assess; 
Status of IRS risk management effort: Enterprise level: Bi-weekly 
meetings are held, but too early to assess; 
Does IRS meet criteria: Yes; 
Status of IRS risk management effort: Process level: The FSR team 
holds biweekly meetings to monitor progress. A procedure is in place 
for the responsible executive to certify that he will meet goal or 
have mitigations in place. 

Legend: N/A = not applicable. 

Source: GAO analysis of IRS data. GAO-15-163. 

[End of table] 

As table 2 shows, IRS has made good progress in setting up its risk 
management process. In some cases we found it was too early to assess 
whether the ERM process meets the criteria. For example, the status of 
monitoring efforts is unknown because the risk management effort is 
still in the early stages. 

However, in the alternatives evaluation stage we found IRS has an 
opportunity to strengthen the ERM process. The criteria of this stage 
are specific countermeasures to reduce risk, use of external sources 
to improve decision making, and cost-benefit analysis of 
countermeasures. 

According to IRS's own guidance, management plans should be detailed 
and contain the following information: all areas that could be 
impacted if an adverse event occurred; all activities required to 
effectively reduce likelihood, impact, or both; critical or due dates, 
external dependencies and activity ownership; and residual risk (risk 
left after management activities) and actions taken to address 
residual risks. 

IRS has not developed specific countermeasures as part of its risk 
management activities. Instead, in many cases, the management 
activities rely on decision making once the adverse event occurs 
rather than providing an explicit course of action (see appendix IX 
for examples). IRS's proposed activities lack specific countermeasures 
to address the risk, but rather emphasize opportunities to assess the 
adverse event as it unfolds. For example, IRS has identified delays in 
creating PPACA forms as a high impact risk that may occur for the 2015 
filing season, but has not identified specific countermeasures for 
addressing this likely event. Developing specific countermeasures 
would allow IRS to better address likely risks by either reducing the 
probability an event may occur or by managing the effects of an 
adverse event. 

Officials in W&I said they have not yet fully developed alternatives 
because they have focused on becoming familiar with risk management 
processes. An official in IRS's ERM office stressed the importance of 
prioritizing risks so as to most efficiently direct the use of 
resources to develop management activities. In April, IRS undertook 
what officials described as a "temperature check" that had the aim of 
assessing current risks and identifying additional risks to provide a 
high-level overview of risks within the business units and aggregating 
them at the enterprise level. These risks were listed in various risk 
registers and include management activities as well as a link to the 
emerging risk categories. IRS officials acknowledged that the risk 
management strategies need further refinement. 

We have reported on IRS budget cuts and the uncertainty the cuts 
cause, but simply ranking perennial concerns such as staffing and 
budget may delay the development of management activities on other 
impending potential risks and loses sight of why risk management is 
important. The reason for risk management is to provide options to 
tackle risks in a budget constrained environment. 

As mentioned earlier, many of the management activities listed in the 
risk registers envision meetings to discuss a response to an unfolding 
risk situation. These types of meetings should be held ahead of time 
and a range of scenarios should be considered with appropriate 
response. Then, when a risk situation unfolds, specific 
countermeasures or a roadmap is already in place to guide the 
response. Without specific countermeasures, including a cost-benefit 
analysis of options, IRS is unable to provide clear guidance for 
implementing or prioritizing countermeasures, which could hamper its 
ability to respond to adverse events that could affect filing season 
operations. 

IRS Has Implemented Six Filing Season Recommendations but Some 
Significant Ones Remain Open: 

Since 2010, we have issued seven reports on various aspects of IRS's 
filing season activities. These reports included 20 recommendations 
for IRS to improve filing season operations, become more efficient, 
and provide taxpayers with better customer service. IRS has 
implemented six of the recommendations. 

Both taxpayers and IRS have received benefits as a result of IRS's 
implementation of our recommendations. For example, IRS implemented 
our 2011 recommendation to offer an automated telephone line that 
gives taxpayers the status of their amended tax return. This telephone 
line provided taxpayers with faster service because they did not have 
to wait for a live person to assist them. The phone line also enabled 
IRS to reduce costs and make better use of its available resources 
because it lowered taxpayer demand to talk to a live assistor. Table 6 
in appendix X summarizes the filing season recommendations implemented 
by IRS. 

Tables 7 and 8 in appendices XI and XII summarize the 14 
recommendations IRS has yet to implement. IRS officials told us they 
fully agreed with seven of the recommendations, agreed in part with 
one, disagreed with two, and neither agreed nor disagreed with four. 
IRS is taking or plans to take certain actions to implement the 
recommendations that it agreed with or did not disagree with. Six of 
the 14 recommendations relate to improving web services. Specifically, 
in April 2013, we recommended that the IRS should develop a long-term 
strategy to improve web services provided to taxpayers (see appendix 
XII). 

Expanded Math Error Authority Could Help IRS Increase Pre-refund 
Compliance: 

Since 2008, we have raised five matters for Congress to consider that 
make changes to the ability of IRS to use its math error authority 
(MEA) to quickly correct errors without the need for an audit. Without 
a specific grant of MEA authority, IRS must use audit procedures to 
correct errors before it could issue a statutory notice of deficiency. 
[Footnote 40] Congress took our 2009 suggestion and provided IRS with 
MEA so it could automatically verify taxpayers' compliance with 
payback provisions for the 2008 First-Time Homebuyer Credit.[Footnote 
41] With this authority, IRS was able to adjust taxpayers' refunds if 
they had not complied with the payback provision. As a result, from 
fiscal years 2010 through 2013, IRS prevented over $500 million in 
improper refunds from being sent to taxpayers. Congress has not yet 
acted on the other four matters we have asked Congress to consider 
related to MEA. All five matters are summarized in table 9 in appendix 
XIII. 

Conclusion: 

IRS continues to struggle with providing services to taxpayers. It is 
caught between declining resources on one hand and increasing 
statutory responsibilities and growing demand from taxpayers on the 
other. As we have discussed for several years, IRS needs to do two 
things--first, it needs to ensure that available resources are 
utilized as effectively as possible by identifying opportunities to 
improve services, and second, it needs to make tough choices about 
which services to continue providing. 

One way IRS could more effectively use available resources is by 
benchmarking telephone service to the best in business. The importance 
of providing high quality customer service is driven by the 
requirements of GPRA, GPRAMA and executive orders, and OMB guidance 
and memorandums which emphasize the relationship of customer service 
to agency performance and outcomes. While IRS has taken some steps to 
improve telephone service, it has not systematically and periodically 
compared its service to the best in business. As a result, IRS is not 
benefiting as much as it could from the roughly 7,000 FTEs it is 
devoting to telephone service. Further, because IRS uses the same 
staff for telephone and correspondence means that it limits IRS's 
ability to work paper correspondence as effectively as possible as 
well. 

In one effort to more effectively use resources in 2014, IRS made 
decisions to reduce or cut services. While its stated goal was to 
improve service, IRS did not identify the improvements it hoped to 
achieve. As a result, IRS is unable to determine the effectiveness of 
the changes or make informed decisions about additional service 
changes in 2015 and beyond. 

Another way that IRS is trying to better manage its constrained 
resources is through its new process for identifying and managing 
enterprise-wide risks. If well executed, IRS's efforts should help the 
agency allocate resources and take actions under conditions of 
uncertainty when implementing PPACA. IRS has made good progress in 
setting up its risk management process. While it is too early to 
assess some aspects of the risk management framework, there is one 
area where IRS could take action to better prepare itself for risks. 
The risk management strategies IRS identified lack specifics, which 
could hamper IRS's ability to respond in the event a risk occurs. More 
specific countermeasures would better position IRS to either reduce 
the probability of an adverse event or manage the consequences if an 
adverse event occurs. 

Recommendations for Executive Action: 

The Commissioner of the Internal Revenue should direct the appropriate 
officials to take the following three actions: 

* Systematically and periodically compare its telephone service to the 
best in business to identify gaps between actual and desired 
performance. 

* Develop outcomes that are measurable and plans to analyze service 
changes that allow valid conclusions to be drawn so that information 
can be conveyed to Congress, IRS management, and others about the 
effectiveness of IRS's service changes and impact on taxpayers. 

* Include specific countermeasures or options in risk management plans 
that could guide a response when an adverse event occurs. 

Agency Comments and Our Response: 

We provided a draft of this report to the Commissioner of Internal 
Revenue. IRS provided written comments on a draft of the report, which 
are reprinted in Appendix XIV. IRS also suggested technical changes to 
the report, which we incorporated where appropriate. 

IRS disagreed with the recommendation to systemically and periodically 
compare its telephone service to the best in business, stating that 
the differences between the purposes of IRS's telephone operations and 
public sector contact centers are too significant to yield useful 
results when broadly compared to each other. We disagree that IRS's 
telephone operations cannot be compared to others. IRS notes, and we 
report, that the agency has conducted targeted benchmarking against 
the best in the business which it believes was helpful in identifying 
gaps and potentially improving performance. Specifically, IRS 
benchmarked one measure of telephone service--level of service--to 
both private and public sector organizations which allowed it to 
identify options for modifying that measure. However, IRS uses more 
than one measure to more fully evaluate its telephone performance. 
Benchmarking all of those measures alongside each other (and 
potentially others it does not currently use) to the best in the 
business could help improve taxpayer service. Further, as we note in 
our report, the criteria allow for comparison to private organizations 
providing analogous services, not just those that are exactly 
comparable. Comparisons of telephone service to the best in business 
can help inform Congress about resources needed to improve the level 
of service provided to taxpayers. Accordingly, we believe this 
recommendation remains valid and should be implemented. 

IRS agreed with our recommendation to develop outcomes that are 
measurable and analyze service changes to allow for valid conclusions 
to be drawn. To accomplish this, IRS said that it will develop 
projections to assess the effect of service changes during the 2015 
filing season, allowing it to determine the amount of resources that 
are reallocated as a result of the service changes and to assess the 
taxpayer experience and address opportunities for improvement. IRS 
reported it anticipates completing this analysis by the end of fiscal 
year 2015. 

IRS did not state whether it agreed or disagreed with our 
recommendation to include specific countermeasures in its risk 
management plans. Our report acknowledges the progress that IRS has 
made implementing its ERM program. For the risk registers we reviewed, 
IRS had assessed the probability and impact of the risks listed, 
meaning that it had prioritized its risks; however, it had not 
developed specific countermeasures. Without specific countermeasures, 
risk assessment becomes a fruitless exercise. Without countermeasures 
specifically articulated in risk management plans, IRS's ability to 
respond quickly and appropriately to an adverse event may be hampered. 
Therefore, we believe IRS should implement our recommendation and 
include specific countermeasures in its risk management plans. 

We plan to send copies of this report to the appropriate congressional 
committees. We will also send copies to the Commissioner of Internal 
Revenue, the Secretary of the Treasury, and other interested parties. 

In addition, the report will be available at no charge on the GAO 
website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-9110 or whitej@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix XV. 

Signed by: 

James R. White 
Director, Tax Issues Strategic Issues: 

[End of section] 

Appendix I: Individual Income Tax Returns and Refunds Processed, 2009 
through 2014: 

Continued increases in e-filing are important because processing costs 
are lower for e-file returns and refunds are issued faster. For the 
2014 filing season (through early March), on average IRS reported it 
processed direct deposit refunds for e-filed returns within 9 days. 
[Footnote 42] 

Table 3: Individual Income Tax Returns and Refunds Processed from 2009 
through 2014: 

Number of individual tax returns processed (in millions)[B]; 
2009: 139; 
2010: 137; 
2011: 140; 
2012: 142; 
2013: 142; 
2014: 144; 
Percent change from 2013 to 2014[A]: 1%. 

Electronic (in millions); 
2009: 94; 
2010: 97; 
2011: 109; 
2012: 116; 
2013: 119; 
2014: 122; 
Percent change from 2013 to 2014[A]: 3%. 

Paper (in millions); 
2009: 45; 
2010: 40; 
2011: 30; 
2012: 26; 
2013: 23; 
2014: 22; 
Percent change from 2013 to 2014[A]: -7%. 

Percentage e-filed; 
2009: 67%; 
2010: 71%; 
2011: 78%; 
2012: 82%; 
2013: 84%; 
2014: 85%; 
Percent change from 2013 to 2014[A]: n/a. 

Number of refunds processed (in millions); 
2009: 109; 
2010: 107; 
2011: 107; 
2012: 108; 
2013: 107; 
2014: 107; 
Percent change from 2013 to 2014[A]: 0. 

Amount of refunds processed (dollars in billions); 
2009: $298; 
2010: $312; 
2011: $303; 
2012: $295; 
2013: $287; 
2014: $290; 
Percent change from 2013 to 2014[A]: 1%. 

Legend: n/a = not applicable. 

Source: GAO analysis of IRS data. GAO-15-163. 

Note: Data on the number of returns and refunds processed are from 
January 1 through October 2, 2009; January 1 through October 1, 2010; 
January 1 through September 30, 2011; January 1 through September 28, 
2012; and January 1 through September 27, 2013; and January 1 through 
September 26, 2014. 

[A] The numbers in the table are rounded, but the percent change was 
calculated using exact values. Therefore, in some cases, the percent 
change is slightly different than it would be if it were calculated 
using the rounded values in the table. 

[B] The number individual tax returns processed includes forms 1040, 
1040A, and 1040EZ. 

[End of table] 

[End of section] 

Appendix II: Full-Time Equivalent (FTE) Data for Telephone, 
Correspondence, Submission Processing and Other Categories, Fiscal 
Years (FY) 2009 through 2014: 

Telephone; 
FY 2009: 9,334; 
FY 2010: 9,439; 
FY 2011: 8,840; 
FY 2012: 8,224; 
FY 2013: 7,726; 
FY 2014: 6,915; 
Percent change from FY 2013 to 2014: -10%. 

Correspondence; 
FY 2009: 4,713; 
FY 2010: 4,556; 
FY 2011: 4,665; 
FY 2012: 5,545; 
FY 2013: 5,494; 
FY 2014: 5,584; 
Percent change from FY 2013 to 2014: 2%. 

Other[A]; 
FY 2009: 1,971; 
FY 2010: 2,147; 
FY 2011: 2,110; 
FY 2012: 2,451; 
FY 2013: 2,568; 
FY 2014: 2,652; 
Percent change from FY 2013 to 2014: 3%. 

Total Accounts Management[B]; 
FY 2009: 16,018; 
FY 2010: 16,142; 
FY 2011: 15,615; 
FY 2012: 16,220; 
FY 2013: 15,788; 
FY 2014: 15,152; 
Percent change from FY 2013 to 2014: -4%. 

Submission Processing[C]; 
FY 2009: 11,360; 
FY 2010: 11,067; 
FY 2011: 9,941; 
FY 2012: 9,157; 
FY 2013: 9,086; 
FY 2014: 8,626; 
Percent change from FY 2013 to 2014: -5%. 

Total FTEs; 
FY 2009: 27,378; 
FY 2010: 27,209; 
FY 2011: 25,556; 
FY 2012: 25,377; 
FY 2013: 24,874; 
FY 2014: 23,778; 
Percent change from FY 2013 to 2014: -4%. 

Source: GAO analysis of IRS data. GAO-15-163. 

Note: Numbers are rounded and therefore may not add up to the totals 
for account management or FTEs. 

[A] Other categories include IRS campus staff, including direct staff 
that do not work paper or phone programs at an IRS campus, and 
taxpayer relations. 

[B] Accounts Management provides education and assistance to taxpayers 
and resolves accounts and notice inquiries through telephone, paper, 
and Internet correspondence. 

[C] Submission processing processes paper and electronically submitted 
tax returns and supplemental documents, accounts for tax revenue, 
processes information documents, and issues refunds and tax notices. 

[End of table] 

Figure 6: IRS FTEs Responsible for Telephone, Correspondence, 
Submission Processing and Other Categories, Fiscal Years 2009 through 
2014: 

[Refer to PDF for image: multiple line graph] 

Fiscal year: 2009; 
Telephone: 9,334; 
Correspondence: 4,713; 
Other: 1,971; 
Submission processing: 11,360; 
Total: 27,378. 

Fiscal year: 2010; 
Telephone: 9,439; 
Correspondence: 4,556; 
Other: 2,147; 
Submission processing: 11,067; 
Total: 27,209. 

Fiscal year: 2011; 
Telephone: 8,840; 
Correspondence: 4,665; 
Other: 2,110; 
Submission processing: 9,941; 
Total: 25,556. 

Fiscal year: 2012; 
Telephone: 8,224; 
Correspondence: 5,545; 
Other: 2,451; 
Submission processing: 9,157; 
Total: 25,377. 

Fiscal year: 2013; 
Telephone: 7,726; 
Correspondence: 5,494; 
Other: 2,568; 
Submission processing: 9,086; 
Total: 24,874. 

Fiscal year: 2014; 
Telephone: 6,915; 
Correspondence: 5,584; 
Other: 2,652; 
Submission processing: 8,626; 
Total: 23,778. 

Notes: Other categories include IRS campus staff, including direct 
staff who do not work paper or phone programs at an IRS campus, and 
taxpayer relations. 

Submission processing processes paper and electronically submitted tax 
returns and supplemental documents, accounts for tax revenue, 
processes information documents, and issues refunds and tax notices. 

[End of figure] 

[End of section] 

Appendix III: IRS Call Volume and Telephone Service Goals and 
Performance, Fiscal Years (FY) 2009 through 2014: 

Total calls to IRS (in millions)[B]; 
FY 2009: 104.2; 
FY 2010: 104.2; 
FY 2011: 112.7; 
FY 2012: 131.0; 
FY 2013: 128.3; 
FY 2014: 99.1; 
Percent change from FY 2013 to 2014[A]: -23%. 

Automated calls answered; 
FY 2009: 29.0; 
FY 2010: 35.1; 
FY 2011: 42.3; 
FY 2012: 59.2; 
FY 2013: 54.0; 
FY 2014: 40.8; 
Percent change from FY 2013 to 2014[A]: -24%. 

Assistor answered calls; 
FY 2009: 39.0; 
FY 2010: 36.7; 
FY 2011: 34.2; 
FY 2012: 30.8; 
FY 2013: 30.1; 
FY 2014: 23.1; 
Percent change from FY 2013 to 2014[A]: -23%. 

Abandoned, busies, and disconnects; 
FY 2009: 36.2; 
FY 2010: 32.4; 
FY 2011: 36.2; 
FY 2012: 41.0; 
FY 2013: 44.2; 
FY 2014: 35.1; 
Percent change from FY 2013 to 2014[A]: -20%. 

Access measures: 

Percentage of callers seeking live help who receive it (level of 
service); 

Goal: 
FY 2009: 77[C]; 
FY 2010: 71; 
FY 2011: 71; 
FY 2012: 61; 
FY 2013: 70; 
FY 2014: 61; 
Percent change from FY 2013 to 2014[A]: -13%. 

Actual: 
FY 2009: 70; 
FY 2010: 74; 
FY 2011: 70.1; 
FY 2012: 67.6; 
FY 2013: 60.5; 
FY 2014: 64.4; 
Percent change from FY 2013 to 2014[A]: 6%. 

Average wait time (in minutes); 

Goal: 
FY 2009: 10.4[D]; 
FY 2010: 11.6; 
FY 2011: 11.6; 
FY 2012: 19; 
FY 2013: 15; 
FY 2014: 22; 
Percent change from FY 2013 to 2014[A]: 47%. 

Actual: 
FY 2009: 8.8; 
FY 2010: 10.8; 
FY 2011: 13; 
FY 2012: 16.7; 
FY 2013: 17.6; 
FY 2014: 19.6; 
Percent change from FY 2013 to 2014[A]: 11%. 

Accuracy measures[E]: 

Tax law rate (in percent)[F]; 
FY 2009: 92.5%; +/-0.8; 
FY 2010: 92.4%; +/-0.8; 
FY 2011: 92.9%; +/-0.6; 
FY 2012: 92.5%; +/-0.7; 
FY 2013: 95.6%; +/-0.7; 
FY 2014: 95.0%; +/-0.8. 

Account accuracy rate (in percent); 
FY 2009: 95.1%; +/-0.4; 
FY 2010: 95.6%; +/-0.4; 
FY 2011: 96.0%; +/-0.3; 
FY 2012: 95.4%; +/-0.3; 
FY 2013: 95.8%; +/-0.4; 
FY 2014: 96.2%; +/-0.3. 

Source: GAO analysis of IRS data. GAO-15-163. 

[A] The numbers in the table are rounded, but the percent change was 
calculated using exact values. Therefore, in some cases, the percent 
change is slightly different than it would be if it were calculated 
using the rounded values in the table. 

[B] The numbers in the table are the total automated, assistor 
answered, abandoned, busy and disconnected calls, and do not reflect 
the total number of attempted calls to IRS. 

[C] IRS revised its original fiscal year goal of 77 percent down to 70 
percent because of high call volume from taxpayers requesting e-filing 
authentication information and asking stimulus-related questions. 

[D] IRS determines its wait time goals based on anticipated call 
volume and resource availability. 

[E] IRS calculation based on representative samples of phone calls 
from January 1 through June 30. 

[F] The percentage of calls in which assistors provided accurate 
answers for the call type and took the appropriate actions, with a 90 
percent confidence interval. 

[End of table] 

[End of section] 

Appendix IV: Costs for Calls Answered by IRS Assistors and Automated 
Services and Average Handle Time with Assistors, Filing Seasons 2009 
through 2014: 

Assist or answered cost per call; 
2009: $25.75; 
2010: $29.41; 
2011: $30.01; 
2012: $33.97; 
2013: $33.21; 
2014: $42.33; 
Percent change from 2013 to 2014: 27%. 

Automated answered cost per call; 
2009: $0.78; 
2010: $0.61; 
2011: $0.73; 
2012: $0.37; 
2013: $0.38; 
2014: $0.38; 
Percent change from 2013 to 2014: 0. 

Average handle time (minutes)[A]; 
2009: 10.9; 
2010: 11.8; 
2011: 11.7; 
2012: 12.5; 
2013: 11.8; 
2014: 12.5; 
Percent change from 2013 to 2014: 6%. 

Source: GAO analysis of IRS data. GAO-15-163. 

Note: The period of October 1 through June 30 for each year was used 
for calculating costs of calls. That is what has been reported in the 
past and it represents the cost per call for the filing season. 

[A] Average handle time is the time an assistor spends talking with a 
taxpayer, keeping the taxpayer on hold, and finishing the call and 
indicating readiness to receive another call. Numbers are rounded to 
the nearest one-tenth of 1 minute. 

[End of table] 

[End of section] 

Appendix V: Use of IRS Website and Online Services, Fiscal Years (FY) 
2009 through 2014: 

Use of IRS website and mobile application tools: 

Total visits to IRS.gov (in millions)[B]; 
FY 2009: 296; 
FY 2010: 305; 
FY 2011: 319; 
FY 2012: 373; 
FY 2013: 456; 
FY 2014: 437; 
Percent change from FY 2013 to 2014[A]: -4%. 

Searches (in millions) [C]; 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: n/a; 
FY 2012: n/a; 
FY 2013: 82; 
FY 2014: 80; 
Percent change from FY 2013 to 2014[A]: -2%. 

IRS2GO downloads (in millions); 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: 0.3; 
FY 2012: 0.5; 
FY 2013: 3; 
FY 2014: 3; 
Percent change from FY 2013 to 2014[A]: 0. 

Self-service tools - assistance with tax filing and payments: 

Taxpayer forms, publications, and instructions downloads (in 
millions)[D]; 
FY 2009: 192; 
FY 2010: 220; 
FY 2011: 229; 
FY 2012: 362; 
FY 2013: 218; 
FY 2014: 118; 
Percent change from FY 2013 to 2014[A]: -46%. 

Interactive Tax Assistance Tools (completion in thousands)[E]; 
FY 2009: n/a; 
FY 2010: 42; 
FY 2011: 177; 
FY 2012: 455; 
FY 2013: 631; 
FY 2014: 944; 
Percent change from FY 2013 to 2014[A]: 50%. 

Direct Pay Transactions (in millions); 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: n/a; 
FY 2012: n/a; 
FY 2013: n/a; 
FY 2014: 2; 
Percent change from FY 2013 to 2014[A]: n/a. 

Volunteer site locator (in thousands)[F]; 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: n/a; 
FY 2012: n/a; 
FY 2013: 366; 
FY 2014: 273; 
Percent change from FY 2013 to 2014[A]: -25%. 

Online Payment Agreement (completion in thousands); 
FY 2009: 54; 
FY 2010: 64; 
FY 2011: 50[G]; 
FY 2012: 96; 
FY 2013: 98; 
FY 2014: 80; 
Percent change from FY 2013 to 2014[A]: -18%. 

Self-service tools - other requests for information: 

Where's My Refund? (completion in millions); 
FY 2009: 54; 
FY 2010: 67; 
FY 2011: 78; 
FY 2012: 132; 
FY 2013: 201; 
FY 2014: 189; 
Percent change from FY 2013 to 2014[A]: -6%. 

Electronic Filing Personal Information Number Request (completion in 
millions); 
FY 2009: n/a; 
FY 2010: 6; 
FY 2011: 10; 
FY 2012: 12; 
FY 2013: 16; 
FY 2014: 21; 
Percent change from FY 2013 to 2014[A]: 31%. 

Get Transcript (in millions); 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: n/a; 
FY 2012: n/a; 
FY 2013: n/a; 
FY 2014: 19; 
Percent change from FY 2013 to 2014[A]: n/a. 

Where's My Amended Return (in millions); 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: n/a; 
FY 2012: n/a; 
FY 2013: 2; 
FY 2014: 4; 
Percent change from FY 2013 to 2014[A]: 100%. 

Legend: n/a = not applicable. 

Source: GAO analysis of IRS data. GAO-15-163. 

Note: Data are from October 1 to September 30 for each fiscal year 
unless otherwise noted. 

[A] Numbers in the table are rounded, and the percent change has been 
calculated using the rounded values presented in the table. 

[B] A visit is a series of actions that begins when a visitor views 
their first page from the server, and ends when the visitor leaves the 
site. Visitors are not unique. 

[C] Page views include both successful search results and search 
results not found. In 2013, IRS revised its methodology for tracking 
taxpayer searches on IRS.gov. Previously, IRS tracked the total number 
of page views for all searches during a single visit. For 2013, IRS 
began tracking total unique searches, which does not include multiple 
searches for the same information in a single visit. 

[D] For 2013, IRS revised its methodology for tracking downloads of 
forms, publications and instructions. 

[E] IRS introduced the interactive tax assistance tools in March 2010 
and has since added more tools. 

[F] 2010's listing was on 1 page, with an index at the top. 2011's 
listing was split into 52 pages; one for each state, the District of 
Columbia, and Puerto Rico. For 2012, IRS created a volunteer site 
locator tool for searches using zip codes. Data represents the number 
of visits to the disclaimer page where users leave IRS.gov to use the 
volunteer site locator application, hosted by the U.S. Department of 
the Treasury. 

[G] A programming error led to a decrease in the number of completed 
agreements. 

[End of table] 

[End of section] 

Appendix VI: Services Offered at IRS Taxpayer Assistance Centers (TAC) 
and Volunteer Sites, Fiscal Years (FY) 2009 Through 2014: 

TAC: 

Total contacts; 
FY 2009: 6,217,070; 
FY 2010: 6,378,423; 
FY 2011: 6,387,036; 
FY 2012: 6,848,652; 
FY 2013: 6,520,810; 
FY 2014: 5,437,422; 
Percent change from FY 2013 to 2014: -17%. 

Return preparation[A]; 
FY 2009: 415,553; 
FY 2010: 407,241; 
FY 2011: 328,495; 
FY 2012: 369,235; 
FY 2013: 302,308; 
FY 2014: n/a; 
Percent change from FY 2013 to 2014: n/a. 

Tax law questions; 
FY 2009: 340,999; 
FY 2010: 304,578; 
FY 2011: 267,951; 
FY 2012: 233,174; 
FY 2013: 198,844; 
FY 2014: 114,348; 
Percent change from FY 2013 to 2014: -42%. 

Account work notices[B]; 
FY 2009: 3,201,992; 
FY 2010: 3,461,238; 
FY 2011: 3,678,072; 
FY 2012: 2,814,757; 
FY 2013: 3,068,225; 
FY 2014: 2,506,428; 
Percent change from FY 2013 to 2014: -18%. 

Forms; 
FY 2009: 787,336; 
FY 2010: 655,906; 
FY 2011: 633,554; 
FY 2012: 556,735; 
FY 2013: 469,032; 
FY 2014: 391,307; 
Percent change from FY 2013 to 2014: -17%. 

Payments[C]; 
FY 2009: n/a; 
FY 2010: n/a; 
FY 2011: n/a; 
FY 2012: 1,495,169; 
FY 2013: 1,291,493; 
FY 2014: 1,060,748; 
Percent change from FY 2013 to 2014: -18%. 

Other[D]; 
FY 2009: 1,471,190; 
FY 2010: 1,549,460; 
FY 2011: 1,478,964; 
FY 2012: 1,379,582; 
FY 2013: 1,190,908; 
FY 2014: 1,364,591; 
Percent change from FY 2013 to 2014: 15%. 

Sites staffed by volunteers: 

Return preparation; 
FY 2009: 3,047,622; 
FY 2010: 3,085,512; 
FY 2011: 3,188,524; 
FY 2012: 3,264,997; 
FY 2013: 3,406,182; 
FY 2014: 3,646,562; 
Percent change from FY 2013 to 2014: 7%. 

Percent of returns e-filed; 
FY 2009: 91; 
FY 2010: 92; 
FY 2011: 93; 
FY 2012: 95; 
FY 2013: 95; 
FY 2014: 96; 
Percent change from FY 2013 to 2014: n/a. 

Legend: n/a = not applicable. 

Source: GAO analysis of IRS data. GAO-15-163. 

Note: Data cover equivalent periods for each fiscal year with slight 
variations in the exact dates depending on the year and data source. 

[A] TAC return preparation counts include both individual and business 
contacts. 

[B] Account work includes assistance to taxpayers who need to pay 
taxes owed and victims of identity theft. 

[C] Beginning in fiscal year 2012, IRS accounted for contacts where 
taxpayers made payments separately from other account work notices. 

[D] Other contacts include responding to correspondence, scheduling 
appointments, Individual Tax Identification Number (ITIN) 
authentication and providing self-assistance services, which do not 
fall into the defined categories. 

[End of table] 

[End of section] 

Appendix VII: GAO Assessment of IRS's Efforts to Evaluate the 
Effectiveness of Changes to Taxpayer Services: 

To identify criteria appropriate for assessing the effectiveness of 
IRS' six service changes, we reviewed our guidance on designing 
evaluations and assessing program effectiveness and used this criteria 
to evaluate IRS's efforts to evaluate the effectiveness of changes to 
taxpayer services. Our analysis shows that IRS met some of the 
criteria, but did not meet the criteria for selecting outcome measures 
and developing an analysis plan. 

Table 4: GAO Assessment of IRS's Efforts to Evaluate the Effectiveness 
of Changes to Taxpayer Services: 

GAO criteria: Clarify understanding of the program's goals and 
strategy; 
Did IRS meet criteria: Yes; 
GAO Analysis of IRS's Actions Compared to GAO Criteria: In 2013, IRS 
anticipated outcomes for all six service eliminations or reductions. 
These outcomes included full-time equivalent (FTE) savings projections 
and expected shifts in workload for certain initiatives during the 
2014 filing season IRS conducted feasibility studies for each of the 
proposed service initiatives, which included a description of the 
implementation strategy and projected outcomes. 

GAO criteria: Select outcome measures that clearly represent the 
nature of the expected program benefits; 
Did IRS meet criteria: Partially; 
GAO Analysis of IRS's Actions Compared to GAO Criteria: IRS identified 
outcomes in the form of FTE savings and other service improvements 
such as improving telephone level of service. However, most of those 
outcomes did not specify measurable goals. For example, IRS planned to 
improve wait times, but did not develop a goal for reducing wait 
times. As a result, IRS's outcomes did not clearly represent the 
nature of the program benefits. 

GAO criteria: Identify data sources and collection procedures to 
obtain relevant credible information; 
Did IRS meet criteria: Yes; 
GAO Analysis of IRS's Actions Compared to GAO Criteria: IRS developed 
and used a weekly reporting dashboard (using data gathered from 
multiple organizations, including Field Assistance and the Joint 
Operations Center) to track changes in demand. Officials stated that 
assessing changes or shifts in demand allowed the agency to measure 
shifts in demand from telephone and walk-in services to alternative 
service channels, such as online service applications available on 
IRS.gov. IRS also used the data to calculate the number of FTEs that 
were available for reinvestment. 

GAO criteria: Develop plans to analyze the data in ways that allow 
valid conclusions to be drawn about exposure to the program and actual 
outcomes; 
Did IRS meet criteria: No; 
GAO Analysis of IRS's Actions Compared to GAO Criteria: IRS did not 
develop plans to analyze or track the data in a way that would allow 
officials to draw causal connections and develop valid conclusions 
about the effectiveness of the service initiatives. For example, the 
data IRS collected showed that demand for services decreased. However, 
IRS did not analyze the data to determine if a correlation exists 
between its efforts and shifts in demand for services. 

Source: GAO analysis of IRS information. GAO-15-163. 

[End of table] 

[End of section] 

Appendix VIII: GAO Analysis of Expected and Actual Outcomes for IRS's 
2014 Service Changes: 

Most of the expected outcomes that IRS identified were not specific or 
measurable goals. IRS had some data that it could have used to assess 
the effectiveness of its 2014 service changes. We compiled this 
information to compare the reported results of the service changes 
against IRS's expected outcomes. 

Table 5: GAO Analysis of IRS's 2014 Service Initiatives' Expected and 
Actual Outcomes: 

Limit telephone assistance to only basic tax law questions during the 
filing season and reassign assistors to work account-related inquiries: 

Limit telephone assistance to only basic tax law questions during the 
filing season and reassign assistors to work account-related inquiries: 
Expected outcome: 
* Estimated FTE savings: 199; 
Actual outcome: 
* Actual FTE savings: 245 (as of January 1 through July 26, 2014). 

Expected outcome: 
* Increase telephone level of service by 1.7 percent for fiscal year 
2014; 
Actual outcome: 
* Telephone level of service increased by approximately 4 percent--
from 60.5 percent in FY 2013 to 64.4 in FY 2014. 

Expected outcome: 
* Answer fewer tax law calls and redirect taxpayers to other resources 
for tax law assistance, such as IRS.gov and third-party providers; 
Actual outcome: 
* Telephone demand for tax law assistance was 12 percent lower than 
2013--from approximately 3.7 million to 3.2 million (as of January 5 
through July 26, 2014); 
* Answered approximately 1.2 million tax law related calls, a 58 
percent decrease compared to 2013 (as of January 5 through July 26, 
2014). 

Expected outcome: 
* Redirect tax law assistors at walk-in sites to work account related 
inquiries, such as assisting more customers with identity theft and 
fraud issues; 
Actual outcome: 
* During the filing season, assistors at walk-in sites provided 
identity theft services to 23 percent more customers when compared to 
2013, from 66,112 to 81,049 (as of January 1 through April 30, 2014). 

Launch the "Get Transcript" tool, which allows taxpayers to obtain a 
viewable and printable transcript on IRS.gov and redirect taxpayers to 
automated tools for additional guidance: 

Expected outcome: 
* Estimated FTE savings: 349; 
* Actual FTE savings: 45 (as of January 1 through July 26, 2014). 

Expected outcome: 
* Redirect taxpayers to automated options for obtaining a transcript, 
limit telephone assistance, and reduce demand for transcripts at walk-
in sites and by mail; 
Actual outcome: 
* The volume of transcripts requests made by phone, mail, and at walk-
in sites decreased by 49 percent, from approximately 7.3 million to 
3.7 million (as of January 5 through July 26, 2014); 
* Telephone transcript request declined the most, dropping 62 percent. 

Expected outcome: 
* IRS expected approximately 9 million unique users to use Get 
Transcript during calendar year 2014; 
Actual outcome: 
* More than 15 million unique users completed transcript requests 
using Get Transcript (as of January 5 through July 26, 2014). 

Redirect refund related inquiries to automated services and not answer 
refund inquiries until 21 days after the tax return had been filed, 
except for refunds held for potential fraud: 

Expected outcome: 
* Estimated FTE savings: 330; 
Actual outcome: 
* Actual FTE savings: 92 (as of January 1 through July 26, 2014). 

Expected outcome: 
* Reduce demand and limit access to live assistors for refund 
inquiries; 
Actual outcome: 
* Telephone calls for refund inquiries, including automated route-outs 
and transfers, decreased by about 25 percent (from approximately 43 
million calls to 32 million) when compared to the prior year (as of 
January 5 through July 26, 2014). 

Limit access to the Practitioner Priority Services (PPS) line to only 
those practitioners working tax account issues: 

Expected outcome: 
* Estimated FTE savings: 79; 
Actual outcome: 
* Actual FTE savings: 32 (as of January 1 through July 26, 2014). 

Expected outcome: 
* Limit services to qualified practitioners working tax account issues 
and refer all other callers to alternative sources for obtaining 
information; 
Actual outcome: 
* Telephone demand for PPS account assistance decreased by 19 percent, 
from 1,271,604 to 1,028,276 (as of January 5 through July 26, 2014); 
* IRS answered about 19 percent fewer calls for PPS account issues--
from 996,278 to 802,162 (as of January 5 through July 26, 2014). 

Limit live assistance and redirect requests for domestic employer 
identification numbers (EIN) to IRS's online tool: 

Expected outcome: 
* Estimated FTE savings: 32; 
Actual outcome: 
* Actual FTE savings: 38 (as of January 1 through July 26, 2014). 

Expected outcome: 
* Limit live assistor services for EIN requests and redirect 
individuals to the online EIN request application on IRS.gov; 
Actual outcome: 
* Telephone demand for EIN assistance was 29 percent lower when 
compared to 2013--from 1,076,694 to 767,406 (as of January 5 through 
July 26, 2014); 
* IRS answered 22 percent fewer telephone calls--from 752,040 to 
584,382 (as of January 5 through July 26, 2014). 

Eliminate free return preparation and reduce other services at IRS's 
walk-in sites: 

Expected outcome: 
* Redirect taxpayers to available free return preparation options at 
volunteer sites and Free File and reduce demand for services at walk 
in sites; 
Actual outcome: 
* For 2014 (as of January 1 through July 26, 2014), Field assistance 
received approximately: 
- Twenty-eight percent (from approximately 1.3 million to 926,926) 
fewer visits at its walk-in sites when compared to 2013; 
- Approximately 70,000 visits to its walk-in sites for tax law 
questions, a decline of approximately 23 percent from 2013. 

Expected outcome: 
* Reduce wait times at walk-in sites; 
Actual outcome: 
* During the 2014 filing season, on average, 79 percent of taxpayers 
waited less than 30 minutes for services compared to 76 percent in 
2013. Those waiting; 
* more than 90 minutes decreased by 33 percent. Additionally, 
taxpayers leaving before receiving service decreased by 30 percent. 

Source: GAO analysis of IRS information. GAO-15-163. 

[End of table] 

[End of section] 

Appendix IX: Selected Excerpts From IRS's Risk Registers: 

Patient Protection and Affordable Care Act (PPACA) risk register: 

IRS risk: Wage and Investment (W&I) resources diverted from working 
paper inventories due to PPACA phone traffic; 
IRS risk description: If PPACA-related increase in phone traffic 
occurs, then W&I will have to divert resources from working paper 
inventories to manning the telephone lines, resulting in reduced 
levels of customer service decreased customer and employee 
satisfaction, and increased costs; 
IRS: status/probability/impact: Status: 
Risk is dire; 
Probability: Likely; 
Impact: High; 
IRS mitigation strategy: 
1. Staff and systems are developed to meet service demand; 
2. Robust monitoring and reporting for level of service and 
performance measures; 
3. Routinely leverage IRS Research Organizations to determine the 
optimal balance of resources to provide customer service; 
4. Adjust the Compliance work plan to move some audit starts later in 
the year to reduce the impact of mail; 
5. New PPACA systems are being engineered to allow opportunities to 
change thresholds/work level receipts; 
6. W&I Service Delivery Approach to evaluate services to ensure 
delivery of core service and to drive service to most efficient 
delivery method. Evaluate trade-off analysis and what to "stop doing." 
Filing Season 2015 Approach is under development; 
GAO analysis: 
1. Not specific --Systems under development; 
2. Not specific --Monitoring to detect problem; 
3. Not specific --Leveraging resources expectation; 
4. Not specific --Prospective plans; 
5. Not specific --Systems under development; 
6. Not specific --Approach under development. 

IRS risk: Delay to Filing Season due to late and/or retroactive PPACA 
legislation, and/or new Presidential Executive Order(s) regarding 
PPACA legislation; 
IRS risk description: If late or retroactive PPACA legislation occurs 
and shortens the planning process and/or results in rework, or if 
additional Presidential Executive Orders are issued to delay or alter 
original enacted legislation, then late changes to requirements and a 
delay to the Filing Season could result in decreased public 
confidence, decreased customer service and customer satisfaction, 
diminishing chances for successful implementation and introducing a 
reputational risk; 
IRS: status/probability/impact: 
Status: Behind schedule; 
Probability: Almost certain; 
Impact: High; 
IRS mitigation strategy: 
1. Repeatable, highly effective Fling Season Readiness (FSR) planning 
process for a holistic look at upcoming events and legislation and 
impact to people, process and technology; 
2. A designated Legislative Analysis Tracking and Implementation 
Services representative who attends regular meetings to determine the 
impact of new or expiring legislation; 
3. Dedicated and embedded PPACA IRS Counsel resources to support 
decision making; 
4. A PPACA dedicated staff identified at PPACA Program Management 
Office at Headquarters, Office of Program Coordination and Integration 
(OPCI) in W&I, the Electronic Invoice Presentation and Payment team 
and the PPACA Joint Implementation Teams to support organizational 
readiness activities; 
GAO analysis: 
1. Not specific --Prospective plan; 
2. Not specific --Assigned staff to support future discussion; 
3. Not specific --Assigned staff to support future discussion; 
4. Not specific --Assigned staff to support future discussion. 

IRS risk: PPACA form development does not conform to Filing Season 
Readiness Approach timeframe; 
IRS risk description: If development of PPACA forms (other than PPACA 
Information Return products) does not comply with existing timeframe 
of Filing Season Readiness Approach, then Unified Work Requests, 
training development and delivery, and IRM updates may all be 
delayed - forms readiness drives all; 
IRS: status/probability/impact: 
Status: Behind schedule; 
Probability: Almost certain; 
Impact: High; 
IRS mitigation strategy: 
1. Timely and effective process to ensure resources are updated and 
efficient training delivery plan for front line employees; 
2. Dedicated and embedded PPACA IRS Counsel resources to support 
decision making; 
3. Significant external partner relationships to socialize upcoming 
changes and robust communication strategy; 
4. Repeatable, highly effective FSR planning process for a holistic 
look at upcoming events and legislation and impact to people, process 
and technology; 
GAO analysis: 
1. Not specific --Monitoring to detect problem; 
2. Not specific --Assigned staff to support future discussion; 
3. Not specific --Dialogue with external partners; 
4. Not specific --Prospective plan. 

Foreign Account Tax Compliance Act (FATCA) risk register: 

IRS risk: Timing for Form 8966 submitter requirements due to 
International Compliance Management Model (ICMM) schedule could 
prevent appropriate execution of electronic filing Help Desk mission 
to successfully answer calls and inquiries; 
IRS risk description: Development of the outputs from ICMM has not 
begun. Electronic Products and Services Support training is dependent 
upon the finalization of submitter responses (if we do not have the 
electronic filing of the 8966, then there will be no work for the Help 
Desk to do). As of right now, it is developing ICMM as the 
technological developments to enable electronic filing. The impact to 
electronic filing is lack of sufficient lead time to develop and 
deliver training by deployment date. Could have already hired and 
trained; 
IRS: status/probability/impact: 
Status: Behind schedule; 
Probability: Possible; 
Impact: Medium; 
IRS mitigation strategy: 
1. New hires typically come on board in October. Recalls are brought 
back on September/October training is typically completed in 2 weeks. 
Cannot complete training without knowing the ICMM process. FATCA 
training would have to be delivered separately in a compressed time 
frame. Make training room reservations now; 
2. Train assistors to do other work if Form 8966 does not materialize; 
3. Reallocate inventory and revise resource work plan; 
GAO analysis: 
1. Not specific --Training under development; 
2. Not specific --Prospective plan; 
3. Not specific --Prospective plan. 

IRS risk: Delay in January 1 "go-live" date for ICMM system prevents 
electronic filing of Form 8966 and a risk to Submission Processing for 
processing paper forms; 
IRS risk description: The ICMM program will be contracted out with a 
contract award date of August 8, 2014. To meet the January 1 "go-live" 
date, there is a significant workload to accomplish in a very short 
period of time once the vendor is on board. If the ICMM system is not 
running by January 1, 2015, then Form 8966 needs to come through via 
paper which poses a risk to Submission Processing. The impact of this 
would be no electronic filing of Form 8966; the form will be on paper 
instead, which will cause a resource constraint; 
IRS: status/probability/impact: 
Status: Behind schedule; 
Probability: Possible; 
Impact: Medium; 
IRS mitigation strategy: 
1. Clarify our role with respect to testing and integration with W&I 
systems and processes and the timeframe of the testing; 
2. The contingency plan for Submission Processing to incorporate paper 
processing F8966 into existing work is the following. When faced with 
over-receipts, the following actions are taken as a standard practice: 
--1) Receipts are monitored to determine if/when extra manpower is 
needed --2) People are recruited from other areas that may not be 
facing high volumes in their work at the time; 
3. Obtain research on what the paper volumes would be - projected 
volume is 100,000; 
GAO analysis: 
1. Not specific --Dialogue between managers; 
2. More specific; 
3. Not specific - Monitoring to detect problems. 

W&I risk register: 

IRS risk: Mission creep; 
IRS risk description: If significant changes to, and/or expansion of, 
the breadth and complexity of the IRS's mission continues then IRS 
will be unable to either execute on its core mission or implement the 
required changes in a complete, accurate, timely and/or efficient 
manner; 
IRS: status/probability/impact: 
Status: Not available; 
Probability: Almost certain; 
Impact: High; 
IRS mitigation strategy: 
1. Filing Season 2015 Service Approach 
- W&I Service Delivery Approach to evaluate services to ensure 
delivery of core service and to drive service to most efficient 
delivery method including evaluation of trade-off analysis and what to 
"stop doing"; 
2. FSR process including FSR Executive Steering Committee in place to 
comprehensively evaluate upcoming events and legislation that impacts 
filing season looking holistically at people, process and technology 
for Filing Season 2015; 
3. Significant external partner relationship to socialize upcoming 
changes and robust communication strategy; 
4. Established quantitative and qualitative performance measures that 
support and reinforce the achievement of the IRS mission and overall 
strategic goals; 
5. FATCA implementation - oversight provided by OPCI; 
GAO analysis: 
1. Not specific - Approach under development; 
2. Not specific - Monitoring to detect problem; 
3. Not specific - Dialogue with external partners; 
4. More specific; 
5. Not specific - Monitoring to detect problem. 

IRS risk: Service delivery; 
IRS risk description: If service delivery options are not evaluated 
and adjusted to maximize return on diminishing resources then mission 
creep and scope expansion may impact ability to achieve core mission; 
IRS: status/probability/impact: 
Status: Not available; 
Probability: Likely; 
Impact: Medium/High; 
IRS mitigation strategy: 
1. Filing Season 2015 Service Approach 
- W&I Service Delivery Approach to evaluate services to ensure 
delivery of core service and to drive service to most efficient 
delivery method including evaluation of trade-off analysis and what to 
"stop doing"; 
2. Significant external partner relationship to socialize upcoming 
changes and robust communication strategy; 
3. Established quantitative and qualitative performance measures that 
support and reinforce the achievement of the IRS mission and overall 
strategic goals; 
4. Service On Demand project to evaluate service delivery channels 
moving forward; 
GAO analysis: 
1. Not specific - Approach under development; 
2. Not specific - Dialogue with external partners; 
3. More specific; 
4. Not specific - Project under development. 

Source: GAO analysis of IRS information. GAO-15-163. 

Note: These descriptors are taken directly from IRS's Risk Registers. 

[End of table] 

[End of section] 

Appendix X: Prior GAO Filing Season Recommendations Implemented by IRS: 

Since 2010, we have issued seven reports on various aspects of IRS's 
filing season operations. These reports included 20 recommendations 
for IRS to improve filing season operations, become more efficient, 
and provide taxpayers with better customer service. Listed below are 
the six recommendations that IRS has implemented. 

Table 6: Implemented GAO Recommendations to IRS Related to the Filing 
Season: 

Recommendation: GAO-11-111: 

To gain efficiencies and improve taxpayer service, the Commissioner of 
Internal Revenue should direct the appropriate officials to: use the 
existing process of regular team meetings with frontline telephone 
assistors to solicit information on call trends and other potential 
improvements to phone service and to supplement issues identified 
using Contact Analytics; 
Benefit: Identifying trends in call topics is a key element in 
improving service. Telephone assistors, interacting with taxpayers, 
can identify systemic issues and send them forward for analysis and 
resolution; 
Status: IRS piloted a process called "Hear me" in selected telephone 
service sites. By implementing this process, IRS is better able to 
identify emerging issues and improve the taxpayer experience by 
providing alternative and more cost effective services, according to 
IRS officials. 

To gain efficiencies and improve taxpayer service, the Commissioner of 
Internal Revenue should direct the appropriate officials to: establish 
an evaluation plan for the 2011 filing season debit card program that 
includes taxpayers, volunteer site partners, and other stakeholders 
and assess the full range of reasons for program participation rates; 
Benefit: An analysis plan would provide an understanding informed by 
multiple stakeholder perspectives on reasons why taxpayer 
participation in the program was low, including reasons outside of the 
manner in which the program was marketed. Without such a plan, IRS 
risks missing opportunities to increase participation; 
Status: IRS completed a plan to determine how to appropriately market 
debit cards and other services provided at Volunteer Income Tax 
Assistance (VITA) sites. 

Recommendation: GAO-12-176: 

We recommended that the Commissioner of Internal Revenue offer an 
automated telephone line that gives taxpayers the status of their 
amended tax return, unless IRS has a convincing cost-benefit analysis 
to suggest that the costs exceed the benefits; 
Benefit: An automated telephone phone line would enable IRS to reduce 
costs and make better use of its available resources because it 
lowered taxpayer demand to talk to a live assistor; 
Status: IRS implemented an automated phone line. 

We recommended that the Commissioner of Internal Revenue assess the 
costs and benefits of automating the Taxpayer Assistance Center 
(TAC)/VITA telephone lines and automate these lines if the benefits 
exceed the costs; 
Benefit: A rigorous assessment of the costs and benefits of automating 
the TAC/VITA telephone line will give IRS better information on how to 
allocate scarce resources; 
Status: IRS officials evaluated the resources needed to provide an 
automated telephone line with similar information and determined that 
the costs of doing so would currently be prohibitive. 

Recommendation: GAO-12-566: 

We recommended that the Commissioner of Internal Revenue should ensure 
that IRS's IT contingency plan for modernized electronic filing (MeF) 
is reviewed and updated, as needed, in time for the beginning of the 
2013 filing season; 
Benefit: Without a timely review and update to its contingency plan 
that considers lessons learned from this year's experiences with MeF, 
IRS could be introducing additional risk to next year's filing season; 
Status: IRS updated its contingency plan for 2013. 

Recommendation: GAO-13-156: 

We recommended that the Acting Commissioner of Internal Revenue should 
clearly define and document the roles and responsibilities of IRS 
offices administering the notice phase, such as in resolving tax debts; 
Benefit: A lack of clarity in the roles and responsibilities of IRS 
officials in charge of sending notices to taxpayers impedes IRS's 
ability to best identify and implement risk-based approaches for 
resolving balance due accounts; 
Status: IRS has defined and documented the roles and responsibilities 
of each office administering the collection notice process. 

Source: GAO and IRS. GAO-15-163. 

[End of table] 

[End of section] 

Appendix XI: Prior Filing Season-Related GAO Recommendations That 
Remain Open: 

Since 2010, we have issued seven reports on various aspects of IRS's 
filing season operations. These reports included 20 recommendations 
for IRS to improve filing season operations, become more efficient, 
and provide taxpayers with better customer service. IRS has not yet 
implemented 14 of the recommendations. Eight of these recommendations 
are described in Table 7 below, and we discuss the other six 
recommendations to improve IRS's web-related services in appendix XII. 
As shown in table 7, IRS agreed with three of these recommendations, 
disagreed with two, and has taken certain actions in regard to the 
three with which it neither agreed nor disagreed. 

Table 7: Open GAO Recommendations to IRS Related to Filing Season: 

Report/Recommendation: GAO-11-111: 

To gain efficiencies and improve taxpayer service, we recommended that 
the Commissioner of Internal Revenue should direct the appropriate 
officials to determine a customer service telephone standard, and the 
resources required to achieve this standard based on input from 
Congress and other stakeholders based on the quality of service 
provided by comparable organizations and on what matters most to the 
customer; 
Benefit: A telephone standard would serve as a means of communicating 
to Congress and others what IRS believes would constitute good 
service. Having such a standard would make the gap more transparent 
and highlight for Congress and others what IRS's capabilities are 
based on resources provided; 
Status: IRS officials disagreed, stating that its measure of telephone 
service does not need to be revised and the current process for 
establishing IRS telephone plans is sufficient. 

To gain efficiencies and improve taxpayer service, we recommended that 
the Commissioner of Internal Revenue should direct the appropriate 
officials to assess business units' need for holding Contact Analytics 
calls beyond 45 days and store calls for this period or document that 
the costs of doing so exceed the benefits; 
Benefit: Storing calls for extended periods would allow IRS to better 
understand the reasons taxpayers call, thus offsetting the costs; 
Status: IRS disagreed and maintains that increasing recorded call 
storage beyond 45 days would not be a low-cost effort. 

To gain efficiencies and improve taxpayer service, we recommended that 
the Commissioner of Internal Revenue should direct the appropriate 
officials to establish a performance measure for taxpayer 
correspondence that includes providing timely service to taxpayers; 
Benefit: Without having a performance measure for correspondence 
timeliness, IRS managers may have a less informed basis for balancing 
resources across telephone and correspondence services. Without 
elevating timeliness to taxpayers as part of its suite of balanced 
performance measures, IRS management risks prioritizing telephone or 
other services, for which such measures already exist, over providing 
timely taxpayer correspondence; 
Creating this measure would help provide the highest improvement 
opportunity for taxpayer paper correspondence; 
Status: IRS has agreed and started using a more detailed performance 
measure that tracks the time it takes to close taxpayer 
correspondence. We continue to believe that the benefits described 
here justify making this performance measure part of a suite of 
balanced measures. 

Report/Recommendation: GAO-12-176: 

We recommended that the Commissioner of Internal Revenue develop a new 
refund timeliness measure and goal to more appropriately reflect 
current capabilities; 
Benefit: A new measure would reflect current IRS capabilities better 
than the current measures, which are outdated; 
Status: IRS agreed but has not yet developed a new refund timeliness 
measure. However, it has taken steps to identify the number of days it 
takes to issue a refund. 

We recommended that the Commissioner of Internal Revenue complete an 
Internet strategy that provides a justification for the implementation 
of online self-service tools and includes an assessment of providing 
online self-service tools that allow taxpayers to access and update 
elements of their account online; acknowledges the costs and benefits 
to taxpayers of new online services; sets the time frame for when 
online service would be created and available for taxpayer use; and 
includes a plan to update the strategy periodically; 
Benefit: Such a strategy would provide Congress and taxpayers with a 
better understanding of the online services IRS plans to provide with 
its significant investment on its website; 
Status: IRS agreed but has not yet taken action to fully address this 
recommendation. IRS does not have a long-term strategy for enhancing 
its web services, and has not developed business cases for new online 
services that describe the potential benefits and costs and 
prioritizes projects. 

Report/Recommendation: GAO-13-156: 

We recommended that the Acting Commissioner of Internal Revenue 
outline a strategy that defines appropriate levels of telephone and 
correspondence service and wait time and lists specific steps to 
manage service based on an assessment of time frames, demand, 
capabilities, and resources; 
Benefit: Outlining a strategy that defines appropriate levels of 
service and lists specific steps to manage service would reverse 
recent declining trends in customer service; 
Status: IRS did not agree or disagree but believes that its efforts to 
increase taxpayer service by improving contact center efficiency, 
providing issue resolution alternatives to reduce demand, and 
equipping the workforce with additional tools is sufficient. 

We recommended that the Acting Commissioner of Internal Revenue tailor 
appropriate and timely interventions with taxpayers who file balance 
due returns by pilot testing risk-based approaches that could include 
implementing the Advanced Consolidated Data Analytics plan and using 
more data-driven methods to identify the most appropriate method for 
contacting a taxpayer; 
Benefit: Risk-based approaches where contacts are tailored to the 
taxpayer have helped increase collections in a number of states; 
Status: IRS did not agree or disagree but has reported that the 
advanced analytics research project for contacting taxpayers with a 
balance due had not been funded. As an alternative to that project, 
IRS conducted an in-depth analysis in-house of the model it uses to 
identify potential cases that it considers to have balances that are 
currently not collectable. In October 2014, IRS reported that it 
believes that better (more productive) cases will be assigned to those 
work streams. 

Report/Recommendation: GAO-14-133: 

We recommended that the Commissioner of Internal Revenue develop a set 
of standardized account entries and eliminate unnecessary redundancy 
when entering installment agreement data into accounts; 
Benefit: Standardized account entries can lead to increased 
efficiencies and lower costs, and taxpayers and IRS can benefit by the 
elimination of redundancy in IRS processes; 
Status: IRS is testing an alternative system before it considers 
standardizing account entries. 

Sources: GAO and IRS. GAO-15-163. 

[End of table] 

[End of section] 

Appendix XII: Prior Filing-Season Related GAO Recommendations Related 
to Improving Web Services Remaining Open: 

Six of the 14 open recommendations relate to improving web services. 
Specifically, we recommended that IRS should develop a long-term 
strategy to improve web services provided to taxpayers. We include 
these separately because we were subsequently asked to review IRS 
efforts to offer more interactive web services. IRS agreed with four 
of these recommendations, partially agreed with developing business 
cases because it believes other criteria should be considered, and did 
not take a position on establishing numerical measures. These six 
unimplemented recommendations are listed in table 8. 

Table 8: Open GAO Recommendations Related to a Long-Term Strategy for 
Improving IRS Web Services: 

Report/Recommendation: GAO-13-435: 

The Acting Commissioner of the Internal Revenue Service should direct 
appropriate officials to develop a long-term strategy to improve web 
services provided to taxpayers, in accordance with Howto.gov and other 
federal guidance outlined in our report. To accomplish this, we 
further recommend that IRS take the following six actions: 

Decide on a complete suite of performance metrics, as soon as 
practical; 
Benefit: To improve taxpayer service and compliance, it is important 
to have a full set of performance metrics as a baseline; 
Status: IRS officials agreed and IRS is tracking all the recommended 
Howto.gov metrics and is working to identify additional performance 
metrics. 

Study leading practices of other organizations to understand how web 
improvement strategies were developed and new services prioritized; 
Benefit: Learning what is working for others and applying their 
practices and lessons learned could help IRS identify which tools 
would provide the most benefit to taxpayers; 
Status: IRS officials agreed and IRS conducted a study of best 
practices of other organizations to understand how web improvement 
strategies were developed and prioritized. 

Establish a numerical or other measurable goal to improve taxpayer 
satisfaction and a timeframe for achieving it; 
Benefit: Having a measurable target with a numerical goal or 
measurable targets facilitates future assessments of whether overall 
goals and objectives were achieved; 
Status: IRS officials neither agreed nor disagreed, but stated that 
they are continuing to work on establishing a numeric goal to measure 
customer satisfaction. 

Develop business cases for all new online services, describing the 
potential benefits and costs of the project, and use them to 
prioritize future projects; 
Benefit: Business cases can help IRS determine which additional 
services would benefit taxpayers the most and how much the services 
would cost; 
Status: IRS officials partially agreed and stated that IRS has 
enhanced business case development for all online services to include 
potential benefits and costs of those projects. In partially agreeing, 
IRS indicated that it needs to balance prioritization using broader 
criteria, such as the risk to existing business systems and processes. 

Review risk mitigations plans for interactive tools to ensure all 
risks are addressed. If risks are not addressed, IRS should take 
corrective action and identify the root cause to help prevent similar 
occurrences in future mitigation plans; 
Benefit: Reviewing risk mitigation plans could provide IRS with 
reasonable assurance that it is addressing those risks, and that its 
processes are reliable; 
Status: IRS officials agreed and stated that Online Services works 
closely with Information Technology to identify all potential risks 
for products in development. 

Link investments in security to the long-term plan; 
Benefit: Linking security investments to the strategic plan would help 
IRS to align activities, core processes, and resources to support its 
mission; 
Status: IRS officials agreed and stated that Online Services will 
integrate the future plans for the use of authentication in to the 
Online Strategy, including the dependency of "eAuthentication" 
capabilities plan. 

Source: GAO report and IRS comments. GAO-15-163. 

[End of table] 

[End of section] 

Appendix XIII: Matters for Congressional Consideration for Enhanced 
Math Error Authority: 

For almost a century, Congress has been expanding IRS's math error 
authority (MEA) on a case-by-case basis. Currently, there are 13 
situations where IRS can use MEA to make corrections to tax 
returns.[Footnote 43] Using MEA can save time and money for taxpayers 
and can reduce the need for audits to correct taxpayer errors. Since 
2008, we have raised five matters for the Congress to consider 
providing IRS with additional MEA authority. The Congress has enacted 
one and has not yet acted on four of them. 

Table 9: Status of GAO Matters for Congressional Consideration 
Concerning MEA for IRS: 

Report number: GAO-09-146; 
Matter for Congressional Consideration: Use MEA to identify and 
correct returns with ineligible Individual Retirement Account "catch-
up" contributions and contributions to traditional Individual 
Retirement Accounts from taxpayers older than 70 1/2; 
Status: Not as yet enacted. 

Report number: GAO-09-1026; 
Matter for Congressional Consideration: Use prior years' tax return 
information to automatically verify compliance with the 2008 First 
Time Homebuyer Credit payback provision and ensure that homebuyers do 
not improperly claim the credit in multiple years; 
Status: Enacted Pub. L. No. 111-92, § 12(d), 123 Stat. 2984, 2992 
(Nov. 6, 2009), 26 U.S.C. § 6213(g)(2)(P). 

Report number: GAO-10-225; 
Matter for Congressional Consideration: Use prior years' tax return 
information to automatically verify taxpayers' compliance with the 
number of years the Hope credit can be claimed; 
Status: Not as yet enacted. 

Report number: GAO-10-349; 
Matter for Congressional Consideration: Broaden MEA so it is not 
restricted to a case-by-case basis, with appropriate safeguards 
against misuse; 
Status: Not as yet enacted. An Administration revenue proposal for 
fiscal year 2015 would grant the U.S. Department of the Treasury 
(Treasury) regulatory authority to expand the IRS use of MEA to 
correct computational errors and incorrect use of tables provided by 
IRS, and would add a new category of correctable errors where (1) the 
information provided by the taxpayer does not match the information 
contained in government databases, (2) the taxpayer has exceeded the 
lifetime limit for claiming a deduction or credit, or (3) the taxpayer 
has failed to include with his or her return, documentation that is 
required by statute. Department of the Treasury, General Explanations 
of the Administration's Fiscal Year 2015 Revenue Proposals, March 
2014, at 229-230, available at [hyperlink, 
http://www.treasury.gov/resource-center/tax-policy/Pages/default.aspx]; 
(last visited Dec. 8, 2014). 

Report number: GAO-11-481; 
Matter for Congressional Consideration: Use tax return information 
from previous years to ensure that taxpayers do not improperly claim 
credits or deductions in excess of lifetime limits where applicable; 
Status: Not as yet enacted. The Administration's revenue proposals for 
each of the last 3 fiscal years (2013 through 2015) included a 
proposal to give IRS authority to use MEA to correct errors where the 
taxpayer has exceeded the lifetime limits for claiming a deduction or 
credit. See, Department of the Treasury, General Explanations of the 
Administration's Fiscal Year 2013 Revenue Proposals, February 2012, at 
168-169; Treasury, General Explanations of the Administration's Fiscal 
Year 2014 Revenue Proposals, April 2013, at 200-201; Treasury, General 
Explanations of the Administration's Fiscal Year 2015 Revenue 
Proposals, March 2014, at 229-230, all available at [hyperlink, 
http://www.treasury.gov/resource-center/tax-
policy/Pages/general_explanation.aspx]; (last visited Dec. 8, 2014). 

Source: GAO-12-176 and status updates. GAO-15-163. 

[End of table] 

[End of section] 

Appendix XIV: Comments from the Internal Revenue Service: 

Department of The Treasury: 
Internal Revenue Service: 
Deputy Commissioner: 
Washington, DC 20224: 

December 1, 2014: 

Mr. James R. White: 
Director, Tax Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. White: 

I have reviewed your draft report entitled Tax Filing Season: 2014 
Performance Highlights the Need to Better Manage Taxpayer Service and 
Future Risks, and appreciate acknowledgment of a smooth filing season 
despite the delay due to the 2013 government shutdown, additional 
budget cuts, and decreases in staffing. 

By effectively applying available resources, the IRS was able to 
exceed performance projections in many areas this filing season. 
Concentrating staffing in the January through June period enabled us 
to deliver a 70 percent level of telephone service and answer 15.2 
million customer calls. Cumulatively, we maintained high levels of
accuracy, 95 percent for Tax Law calls and 96 percent for Account 
calls. In addition, while receipts in our adjustments inventory 
program were 111 percent of prior year through June, our ending 
inventory was 63 percent of prior year with 468,000 fewer overage 
cases. 

Each year, we review and update our priorities to ensure we are 
meeting the needs of our customers in the most effective and efficient 
manner. To effectively serve taxpayers we must strike a balance 
between technology-based and person-to-person services, leveraging 
technology solutions to serve the majority of taxpayers with limited 
or less complex needs, while maintaining personal service for complex 
issues that can only be resolved with the assistance of IRS personnel. 
This past filing season, we launched the 2014 IRS Service Approach, 
which successfully guided more taxpayers to appropriate self-service 
channels and preserved telephone and face-to-face services for those
taxpayers whose needs could not be met by automation. By applying this 
approach, the IRS was able to reduce the competition for services by 
shifting service demands to alternate channels and devoting its 
limited assistor-based resources to taxpayers needing personal 
assistance. For example, the IRS has traditionally experienced a peak
in toll-free telephone demand early in the filing season, driven 
primarily by questions pertaining to when tax refunds would be 
received. Noting that more than 90 percent of filers receive their 
refund within 21 days of filing, we changed our policy in the 2014
Service Approach to encourage those callers to use the "Where's My 
Refund" application on IRS.gov if it had been less than 21 days since 
the taxpayer had filed their refund claim. This change eliminated that 
refund-driven peak demand on our toll-free services. We will continue 
to build on these successes as we develop and refine the 2015 Service 
Approach. 

In addition to placing a greater focus on assisting taxpayers with 
account issues, the IRS delivered a 70.3 percent Level of Service 
(LOS) across our toll-free environment during the period of January 
through June 2014, compared to 67.7 percent achieved in 2013. We 
delivered a significantly higher LOS on sensitive product lines such 
as the Taxpayer Protection Program, sustaining a 79.7 percent LOS in 
the Identity Protection Specialized Unit for 2014. We were also able 
to redirect resources to realize a reduction in correspondence 
adjustments inventory to 69 percent of the 2013 level, and to reduce
Identity Theft inventory to 52 percent of the 2013 level for the same 
period. 

Regarding toll-free telephone operations, we have conducted 
benchmarking with other call centers in the past to address specific 
needs. In 2012, the Customer Service Representative (CSR) LOS Redesign 
team was convened to perform a 30-day evaluation of the existing CSR 
LOS measure and benchmark with private and public contact centers. 
Factors considered in undertaking the study included the relevance of
our primary measure at the time, changes to IRS call processing over 
the years, and indications that other organizations have changed their 
approach to performance measures. After conducting interviews with 
representatives from each organization, we used IRS data to see how 
the measures of the other organizations could be used to evaluate 
performance and customer service. We believe targeted benchmark
comparisons can be helpful in identifying effective processes and 
methods that are appropriate for improving our performance. 

A response to your specific recommendations is enclosed. If you have 
any questions, please contact Scott Irick, Acting Director, Strategy 
and Finance, Wage and Investment Division, at (404) 338-8801. 

Sincerely, 

Signed by: 

John M. Dalrymple: 
Deputy Commissioner for Services and Enforcement: 

Enclosure: 

The Commissioner of the Internal Revenue should direct the appropriate 
officials to take the following three actions: 

Recommendation: 

Systemically and periodically compare IRS telephone service to the 
best in business to identify gaps between actual and desired 
performance. 

Comment: 

We disagree with this recommendation as the differences between the 
purposes and missions of IRS telephone operations and public sector 
contact centers are too significant to yield useful results when 
broadly compared. The IRS has conducted benchmarking with other call 
centers in the past to address specific needs, and we believe that 
targeted benchmark comparisons can be helpful in identifying effective
processes and methods that can assist in improving performance. We 
will continue to perform such benchmarking when appropriate. 

Recommendation: 

Develop outcomes that are measurable and plans to analyze service 
changes that allow valid conclusions to be drawn so that information 
can be conveyed to Congress, IRS management, and others about the 
effectiveness of IRS's service changes and impact on taxpayers. 

Comment: 

We agree to develop projections for impact of changes to our Service 
Approach. We will monitor and track the demand migration and other 
metrics related to the service approach during this filing season. 
Applying this approach, the IRS will be able to determine the amount 
of resources reallocated to deliver more critical assistor-based
services using existing measures. We will also be able to assess the 
taxpayer experience and address improvement opportunities as they 
emerge. We anticipate completing the analysis near the end of the 
fiscal year. 

Recommendation: 

Include specific countermeasures or options in risk management plans 
that could guide a response when an adverse event occurs. 

Comment: 

The IRS began implementing an Enterprise Risk Management (ERM) program 
during Fiscal Year 2014, and is using the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO) ERM framework as a 
guide in setting up its program. As noted in the report, ERM 
implementation is still in the early stages at the IRS, and the 
Government Accountability Office's (GAO) review of the IRS enterprise 
risk categories occurred as the first ERM cycle was being implemented 
and before the IRS had progressed through all stages of the process. 
The COSO framework consists of multiple components, including risk 
identification, risk assessment, risk mitigation/response, and risk 
monitoring. The prioritization of risks that have been identified 
through our assessment process is only one step, which is then 
followed by the determination of risk responses for those risks ranked 
highest in likelihood and impact. The guidance and approach being 
developed and deployed by the IRS will cover all components of the 
COSO framework, including the identification of risk responses or 
countermeasures. 

[End of section] 

Appendix XV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

James R. White, (202) 512-9110, whitej@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Joanna Stamatiades, 
Assistant Director; LaKeshia Allen-Horner; Jehan Chase; Robert 
Gebhart; George Guttman; Kirsten Lauber; Natalie Maddox; Mark Ryan; 
Erin Saunders-Rath; Angela Smith; and Elwood White made key 
contributions to this report. 

[End of section] 

Footnotes: 

[1] See GAO, IRS 2015 Budget: Long-Term Strategy and Return on 
Investment Data Needed to Better Manage Budget Uncertainty and Set 
Priorities, [hyperlink, http://www.gao.gov/products/GAO-14-605] 
(Washington, D.C.: June 12, 2014). 

[2] Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010) (hereafter, 
"PPACA"), as amended by the Health Care and Education Reconciliation 
Act of 2010 (HCERA), Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 
2010) (hereafter "HCERA"). In this report, references to PPACA include 
any amendments made by HCERA. We note that IRS refers to PPACA as the 
Affordable Care Act ("ACA") and when quoting IRS documents, this 
report will use the IRS acronym. 

[3] FTEs represent the total number of hours worked based on IRS 
payroll data, divided by the number of compensable hours applicable to 
each fiscal year. For example, in fiscal year 2014, there were 2,088 
compensable hours. 

[4] FATCA is found in the Hiring Incentives to Restore Employment Act, 
Pub. L. No. 111-147, Title V, 124 Stat. 71, 97-117 (Mar. 18, 2010). 

[5] A risk register is a document used to capture risk related 
information and report on risks across such areas such as risk 
identification, risk assessment, and risk management/internal control 
activities. 

[6] GAO, Risk Management: Further Refinements Needed to Assess Risks 
and Prioritize Protective Measures at Ports and Other Critical 
Infrastructure, [hyperlink, http://www.gao.gov/products/GAO-06-91] 
(Washington, D.C.: Dec. 15, 2005). 

[7] Most taxpayers file their tax returns between January 1 and April 
15, which is the deadline for filing individual income tax returns. 
However, millions of taxpayers receive extensions from IRS, which 
allows them to delay filing until as late as October 15. 

[8] IRS cannot accept e-filed returns directly from taxpayers. Rather, 
IRS authorizes e-file providers to transmit returns to IRS. 

[9] The Free File program is public-private partnership between IRS 
and the Free File Alliance. Free File is a consortium of 14 leading 
tax software providers who make their products available exclusively 
at IRS.gov. Each Free File software provider sets its own criteria for 
eligibility, generally based on income, age, state residency or 
military service. 

[10] GAO, 2010 Tax Filing Season: IRS's Performance Improved in Some 
Key Areas, but Efficiency Gains Are Possible in Others, [hyperlink, 
http://www.gao.gov/products/GAO-11-111] (Washington, D.C.: Dec. 16, 
2010). 

[11] GAO, 2013 Tax Filing Season: IRS Needs to Do More to Address the 
Growing Imbalance between the Demand for Services and Resources, 
[hyperlink, http://www.gao.gov/products/GAO-14-133] (Washington, D.C.: 
Dec. 18, 2013). IRS's findings were based on a recent small judgmental 
sample of correspondence cases. In that same sample, IRS found that 
its own processes, such as the wording of notices or requirements for 
a paper signature, influenced taxpayers to respond. 

[12] GAO, IRS Website: Long-Term Strategy Needed to Improve 
Interactive Services, [hyperlink, 
http://www.gao.gov/products/GAO-13-435] (Washington, D.C.: Apr. 16, 
2013); 2012 Tax Filing: IRS Faces Challenges Providing Service to 
Taxpayers and Could Collect Balances Due More Effectively, [hyperlink, 
http://www.gao.gov/products/GAO-13-156] (Washington, D.C.: Dec. 18, 
2012); Tax Gap: IRS Could Significantly Increase Revenues by Better 
Targeting Enforcement Resources, [hyperlink, 
http://www.gao.gov/products/GAO-13-151] (Washington, D.C.: Dec. 5, 
2012). 

[13] [hyperlink, http://www.gao.gov/products/GAO-14-133]. 

[14] As part of the PPACA implementation, IRS is required to make 
changes to a number of existing tax products and Information 
Technology (IT) systems. The scope of these changes spans across 
almost all Business Operating Divisions and other functional groups 
with a significant impact on IT. The ERM program will support the IRS 
offices with the aggregation, analysis, and reporting of risks that 
arise from the PPACA implementation effort. 

[15] IRS usually begins processing tax returns in early to mid-
January. This year, it started processing most returns on January 31, 
2014, 1 day later than the 2013 filing season opening. 

[16] GAO, 2009 Tax Filing Season: IRS Met Many 2009 Goals, but 
Telephone Access Remained Low, and Taxpayer Service and Enforcement 
Could Be Improved, [hyperlink, http://www.gao.gov/products/GAO-10-225] 
(Washington, D.C.: Dec. 10, 2009). According to IRS, in fiscal year 
2013, it cost 18 cents to process an e-filed return, as opposed to 
$3.54 for returns filed on paper. 

[17] In 2000, IRS developed a long-term strategy for consolidating 
paper processing centers as electronic filing grew and shifting the 
processing of paper returns to the remaining centers. IRS subsequently 
ended paper return processing at sites in Brookhaven, New York; 
Memphis, Tennessee; Philadelphia, Pennsylvania; Atlanta, Georgia; and 
Andover, Massachusetts between fiscal years 2003 and 2011. In 
addition, in 2013, IRS closed its Fresno satellite facility that was 
located in Tulare, California. 

[18] IRS officials stated that there are benefits to maintaining the 
three paper processing sites, such as weather and other unforeseen 
conditions that cause processing center closures and other delays 
during the filing season. Moving forward, IRS plans to monitor the 
effects of PPACA implementation and review processing center 
consolidation and other resource allocation efforts as it expects 
PPACA to increase its processing workload. 

[19] For 2014, IRS reported that the cost for an assistor answer call 
is based on calls answered from October 1, 2013, through June 30, 2014. 

[20] Average handle time is the time an assistor spends talking with a 
taxpayer, keeping the taxpayer on hold, and finishing the call and 
indicating readiness to receive another call. Numbers are rounded to 
the nearest one-tenth of 1 minute. 

[21] Abandoned calls are those calls where the taxpayer hangs up 
before receiving assistance, and busies are those calls where the 
taxpayer receives a busy signal. 

[22] IRS assistor level of service is calculated by dividing the sum 
of toll-free callers speaking to an IRS assistor and receiving 
informational messages by the total number of attempted calls. 

[23] [hyperlink, http://www.gao.gov/products/GAO-11-111]. 

[24] [hyperlink, http://www.gao.gov/products/GAO-13-156]. 

[25] IRS developed just-in-time training to provide assistors with the 
skills they need at the time needed and reduce the time it takes to 
train assistors for the filing season. This training approach allows 
assistors to gain basic skills for providing services during the 
filing season and participate in other training courses as needed. 

[26] In October 2014, we issued a report that discussed the efforts 
needed to measure and improve customer service at five selected 
agencies. See GAO, Managing for Results: Selected Agencies Need to 
Take Additional Efforts to Improve Customer Service, [hyperlink, 
http://www.gao.gov/products/GAO-15-84] (Washington, D.C.: Oct. 24, 
2014). 

[27] GPRAMA significantly enhanced the requirements of Government 
Performance and Results Act of 1993 (GPRA) by requiring agencies to 
develop annual performance plans that include performance goals for an 
agency's program activities and accompanying performance measures. 
GPRAMA, Pub. L. No. 111-352, § 3, 124 Stat. 3866 (Jan. 4, 2011), 31 
U.S.C. § 1115(b)(6). GPRA, Pub. L. No. 103-62, 107 Stat. 285 (Aug. 3, 
1993). 

[28] Executive Order No. 12862, Setting Customer Service Standards 
(Sept. 11, 1993), 58 Fed. Reg. 48,257 (Sept. 14, 1993). The order 
defined the "best in business" as the highest quality of service 
delivered to customers by private organizations providing a comparable 
or analogous service. Exec. Order No. 12862, § 1 (Sept. 11, 1993). 

[29] Executive Order No. 13571, § 2 (April 27, 2011). Streamlining 
Service Delivery and Improving Customer Service, 76 Fed. Reg. 24,339-
40 (May 2, 2011). 

[30] Memorandums issued include a Memorandum on Customer Service, 31 
Weekly Comp. Pres. Doc. 456 (Mar. 22, 1995) (released by Office of the 
Press Secretary on Mar. 23, 1995), and a Memorandum on Conducting 
"Conversations with America" to Further Improve Customer Service, 34 
Weekly Comp. Pres. Doc. 368 (Mar. 3, 1998). Following Exec. Order No. 
13571 Streamlining Service Delivery and Improving Customer Service, 76 
Fed. Reg. 24,339 (Apr. 27, 2011), OMB issued guidance to agencies to 
implement the requirements. See Office of Management and Budget, 
Implementing Executive Order 13571 on Streamlining Service Delivery 
and Improving Customer Service, Memorandum M-11-24 (June 13, 2011). 

[31] Office of Management and Budget, Management Agenda Priorities for 
the FY 2016 Budget, Memorandum M-14-12 (July 18, 2014). 

[32] [hyperlink, http://www.gao.gov/products/GAO-14-605]. 

[33] [hyperlink, http://www.gao.gov/products/GAO-11-111]. 

[34] Taxpayers have four options to request a transcript: (1) call IRS 
toll-free line and speak to an assistor or use the interactive voice 
response unit to request a mailed copy of the transcript; (2) visit a 
TAC and speak with an assistor to request the transcript to be printed 
on the spot; (3) complete and mail or fax paper Form 4506-T to request 
a transcript be mailed; or (4) use the "Order a Transcript" web tool 
on IRS.gov to request a transcript be mailed. 

[35] GAO, Designing Evaluations: 2012 Revision, [hyperlink, 
http://www.gao.gov/products/GAO-12-208G] (Washington, D.C.: Jan. 31, 
2012). 

[36] Oral statement authority is acceptance of a verbal request for 
account adjustment without written documentation or account 
information without written request. 

[37] GAO, 2011 Tax Filing: Processing Gains, but Taxpayer Assistance 
Could Be Enhanced by More Self-Service Tools, [hyperlink, 
http://www.gao.gov/products/GAO-12-176] (Washington, D.C.: Dec. 15, 
2011). 

[38] William Hoffman, "Koskinen Warns Filing Season Could Be Most 
Complicated Yet," Tax Analysts, October 21, 2014. 

[39] [hyperlink, http://www.gao.gov/products/GAO-06-91]. See also GAO, 
Patient Protection And Affordable Care Act: IRS Managing 
Implementation Risks, but Its Approach Could Be Refined, [hyperlink, 
http://www.gao.gov/products/GAO-12-690] (Washington, D.C.: Jun. 13, 
2012) for a recent application of our risk management framework to IRS 
implementation of PPACA, Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 
2010). For additional information see GAO, Standards for Internal 
Control in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO-14-704G] (Washington, D.C.: Sept. 
2014) Principles 6 and 7. 

[40] For a list of the IRS's existing MEA, see appendix I of 
[hyperlink, http://www.gao.gov/products/GAO-12-176]. 

[41] GAO, Tax Administration: Opportunities Exist for IRS to Enhance 
Taxpayer Service and Enforcement for the 2010 Filing Season, 
[hyperlink, http://www.gao.gov/products/GAO-09-1026] (Washington, 
D.C.: Sept. 23, 2009); Worker, Homeownership, and Business Assistance 
Act of 2009, Pub. L. No. 111-92 § 12(d), 123 Stat. 2984, 2992 (Nov. 6, 
2009), 26 U.S.C. § 6213(g)(2)(P). 

[42] GAO, 2011 Tax Filing: Processing Gains, but Taxpayer Assistance 
Could Be Enhanced by More Self-Service Tools, [hyperlink, 
http://www.gao.gov/products/GAO-12-176] (Washington, D.C.: Dec. 15, 
2011). In that report, we recommended IRS develop a new refund 
timeliness performance measure to better reflect current performance 
and capabilities, but IRS did not agree and indicated it has no plans 
to develop such a measure. 

[43] For a list of IRS's existing MEA, see appendix I of [hyperlink, 
http://www.gao.gov/products/GAO-12-176]. 

[End of section] 

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