The Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98) sent a clear message to the IRS that it must do a better job in meeting the needs of taxpayers. Responding to this mandate, the IRS began a process of change to provide first-rate customer service, including modernization efforts such as expanding service hours and implementing several technological advances. On October 1, 1999, the field Customer Service (CS) function was realigned; this included the reorganization of 25 call sites within 10 CS centers located across the country. The overall objective of this review was to evaluate the IRS’ process for ensuring taxpayers were provided quality customer service by the Toll-Free telephone program during the 2000 Filing Season.

The IRS needs to improve its process for providing Toll-Free telephone service to taxpayers by enhancing its technology, improving executive oversight, providing better controls, and better using its CS resources. One technological advance used in Fiscal Year (FY) 2000 was to manage projected call volume through a centralized control organization called the Customer Service Operations Center, located in Atlanta. This control center monitored the status of call traffic, staffing, and nationwide telecommunications for selected Toll-Free product lines. The IRS projected it would receive 103 million telephone calls in FY 2000. It planned to answer 41 million calls using customer service representatives (CSR) and 19 million calls using automation. The remaining 43 million calls were to go unanswered. Although the IRS implemented initiatives to improve the quality of service to every taxpayer, it did not achieve that goal during the 2000 Filing Season. For the period October 1, 1999, through April 8, 2000, the IRS answered 28.6 million of the 47.1 million calls received. During this period, approximately 18.5 million calls went unanswered.

The IRS measures how well it provides telephone assistance. During FY 2000, the IRS measured its levels of Customer Satisfaction, Employee Satisfaction, and Business Results. In its Business Results, the IRS measured the Level of Service (LOS) and Adherence to Schedule.

The IRS made errors in its LOS calculations and did not answer millions of calls despite reported increases in the LOS. Also, visually impaired CSRs did not receive the proper equipment, resource materials, and timely training, and the IRS did not maximize its use of human resources and existing equipment to improve the quality of service provided to taxpayers.

The IRS spent over $22 million for its new Customer Service Call Router. This router directs a call to a location where it can most quickly be answered based on the number of assistors available to answer calls and the type of taxpayer question. However, during the 2000 Filing Season, the IRS instructed some live assistors to route taxpayer calls to reduce taxpayer wait time and minimize hang-ups. These assistors were performing actions similar to the IRS’ new call routing system. The assistors screened calls and transferred them to another assistor to answer. For FY 2000, the IRS planned to spend approximately $3.6 million in salary costs for assistors who only screened and transferred calls. We estimate that the IRS missed an opportunity to answer up to an additional 1.3 million calls nationwide during FY 2000.

At times, the IRS routed calls to assistors who did not have access to the IRS’ main computer system. For example, we reviewed 461 written referrals and identified 126 (27 percent) that were prepared because the computer system was not available. The assistor receiving the call prepared a referral for another assistor to return the taxpayer’s call and answer the taxpayer’s question. Assistors took from 2 to 34 days to answer the taxpayers’ questions or respond to their calls.

An alternative to preparing a written referral is to transfer the call to another call site. While the IRS’ telephone system has the ability to do this, IRS management chose not to use this feature because they did not want to complicate call routing and it would have increased costs for all calls transferred to another call site, including calls directed to sites where the IRS’ main computer system was not available, by as much as $111,000 in any 1 month. Resolving taxpayers’ inquiries during initial contact would reduce the need for taxpayers to make repeat contacts, thereby easing demand on a CS operation that does not have sufficient resources to answer existing call volumes.

For the period October 1, 1999, through April 8, 2000, the IRS reported a 61 percent LOS. While this represented a slight increase over the IRS’ FY 2000 goal of a 58 percent LOS, the improvement in the LOS was the result of the decrease in the number of taxpayer calls rather than the IRS’ efforts to answer more calls. The IRS projected it would receive 54.1 million taxpayer calls during this period; it received only 47.1 million calls. Also during this period, the IRS planned to answer 31.3 million calls but answered only 28.6 million.

Our review of IRS reports for the period January 1, 2000, to April 8, 2000, showed that CS Toll-Free telephone operations did not use approximately 217,000 (9 percent) of the hours that were available to answer telephone calls. During this same period, the number of abandoned calls exceeded the IRS’ projected figures by 1.4 million (26 percent). In addition, the IRS reported that, through April 8, 2000, the call sites had not had the required staffing in 24 percent of the work periods. Without improvements in answering calls and adherence to schedule, the quality of service provided to taxpayers will continue to suffer despite reported improvements in the LOS.

The IRS reported a 63 percent LOS for the period January 1, 2000, through March 4, 2000. We reviewed call volume data input to the IRS’ tracking system for the 3 major product lines at 3 call sites for 3 days in February 2000. We found errors in the data used to calculate the LOS; these errors caused the IRS to overstate its total assistor-answered calls by 6,891 of the 44,136 (16 percent) reported. The IRS informed us that, as of September 2000, it was still experiencing inaccuracies in the calculations of calls answered.

The nine revisions in the Workload Information Tracking System reporting guidelines coupled with the tedious, complex computations for the LOS increased the risk of reporting inaccurate data. We were unable to determine the overall effect the 16 percent misstatement had on the LOS. The Treasury Inspector General for Tax Administration will conduct additional reviews of the LOS in the Toll-Free telephone operations during the 2001 Filing Season and will report on the results.

During our visits to three call sites, we identified shortages in equipment and materials for visually impaired CSRs, including scanners, printers, closed-circuit televisions, and Braille forms and publications. Also, visually impaired CSRs were inadequately trained to use essential tools, such as IRS computer systems, and materials needed for their jobs. Some materials contained errors and were not always useable.

These deficiencies were identified through management and employee interviews at the three call sites we visited. These sites, combined, employed at least 40 CSRs with some form of visual impairment. Two of the six visually impaired employees we interviewed informed us that they experienced temporary work stoppages. While the IRS was aware of the CSRs’ needs, it had not developed an overall strategy to address those needs. Federal laws require an agency to provide reasonable accommodations for individuals with disabilities. The IRS has approximately 200 visually impaired employees in the CS function.

As the IRS continues its modernization efforts, it has a great opportunity to develop a comprehensive strategy that will address the future needs of CS. The Commissioner, Wage and Investment Division, should develop a strategy that incorporates existing balanced measures and objectives to increase the Toll-Free telephone program’s ability to provide quality service to all taxpayers.

The strategy should include evaluating Toll-Free telephone operations to ensure existing technology and human resources are better used, the LOS is increased through productivity, visually impaired employees’ needs are addressed, and reported outcomes are reliable and accurate.

Management’s Response: The IRS is taking corrective actions on 4 of the 7 recommendations we made. The IRS’ response did not include any corrective action for recommendation number 3. However, information in the Assessment of Cause section and on page 5 of the response indicates the IRS agrees with the issue and will follow other Internal Revenue Manual guidelines that we believe will help resolve the problem. The IRS disagreed with recommendations number 1 and 2, even though the response includes corrective actions, because it believes current procedures are sufficient to address the issues in these recommendations. We believe the IRS must implement the technological improvements necessary to allow it to respond to the taxpayers’ questions in not only an economical but also an effective manner.