Tax Administration:

IRS's 2003 Filing Season Performance Showed Improvements

GAO-04-84: Published: Oct 31, 2003. Publicly Released: Oct 31, 2003.

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During the tax filing season, millions of taxpayers file their returns and seek assistance by calling or visiting IRS's offices or Web site. GAO was asked to assess IRS's 2003 filing season performance in five areas: processing returns, refunds and remittances; electronic filing; telephone service; walk-in assistance, and Web site. We assessed for each of those five areas (1) IRS's performance in 2003, including any factors that helped or impeded its efforts, (2) any new initiatives that were intended to improve IRS's performance in 2003, and (3) IRS's performance over past filing seasons.

Available data for each of five key filing season activities indicates that IRS's performance showed some improvements in 2003 compared to 2002 and IRS met or exceeded many of its 2003 performance goals. IRS processed returns and issued refunds more timely and accurately and increased the rate of electronic filing, although not at a rate that would allow IRS to meet its long-term goal. While IRS provided significantly more accessible telephone service, the accuracy rate of IRS responses declined. The accuracy of tax law assistance provided at walk-in sites improved, although the number of taxpayers assisted at IRS's walk-in sites declined, in part because taxpayers made greater use of the return-preparation assistance offered by volunteer organizations. In addition, IRS did not consolidate or disseminate data on how long taxpayers waited for walk-in assistance, making it difficult to balance quality and service. Finally, IRS's Web site performed well and was more user friendly than last year. IRS attributes improved performance, in part, to (1) fewer tax law changes that affected taxpayers and (2) continued emphasis on performance measures, a key part of IRS's strategy to improve its performance in processing returns and providing taxpayer assistance. IRS implemented initiatives in 2003 intended to improve filing season performance. For example, IRS entered into an agreement with a consortium of 17 tax preparation companies to offer free on-line tax preparation, established new toll-free telephone numbers to better target different taxpayers, and began certifying walk-in staff to answer tax law questions. Over a longer period of time, available data, although limited in some areas, also show that IRS's filing season performance has improved. Since the mid-1990s, the growth of electronic filing has allowed IRS to close one paper processing center and the accuracy and accessibility of telephone assistance has improved. While the Congress and taxpayers expect further progress, the improvements to date are a payoff from IRS's ongoing modernization.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: The Commissioner of Internal Revenue should direct the appropriate officials to require that IRS consolidate and disseminate wait-time information to field managers based on information from sites equipped with an automated system that can capture wait-time data, in order to assess this important aspect of quality.

    Agency Affected: Department of the Treasury: Internal Revenue Service

    Status: Closed - Implemented

    Comments: IRS reinstated that the requirement for Taxpayer Assistance Centers (TACs, or "walk-in sites") to regularly report information to Field Assistance Headquarters on overall percentage of taxpayers waiting more or less than 30 minutes (for those sites equipped with full Q-Matic--the Service's traffic management and reporting system). TACs are required to report this information monthly to area managers, who consolidate it into a quarterly report for headquarters. More importantly, in time for the 2006 tax filing season, Field Assistance management began receiving weekly reports with significantly more detailed information on wait-times--reports pulled directly from the Q-Matic system. These reports included a break-down of wait-time intervals (no-wait, 1-30 minutes, 31-45 minutes, etc.) They also show both the actual number and percentages of taxpayers in the categories tracked by Q-Matic (forms, returns, tax law assistance, and others). Therefore, IRS has fully satisfied the first part of this recommendation. The Commissioner did not agree to disseminate consolidated wait-time information to field managers, noting that routine monitoring of wait-time occrus by local managers for walk-in sites equipped with full Q-Matic. However, at the time of the audit, there were only 140 of 400 walk-in sites equipped with some version of Q-Matic. By the 2006 filing season, IRS had rolled out full Q-matic to 224 of its 400 TACs (or 56 percent of sites). These sites handled 81 percent of all walk-in site traffic during the 2006 filing season. Therefore, for TACs handling the majority of face-to-face interactions, managers now have the information they need about wait-times to help them manage traffic in order to balance timeliness and quality of service. We believe that IRS has, therefore, satisfied the second part of this recommendation.

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