The
National Taxpayer Advocate Needs to Ensure Operations Employees Receive Training to
Identify Cases
October
2001
Reference
Number: 2002-10-002
This
report has cleared the Treasury Inspector General for Tax Administration disclosure review
process and information determined to be restricted from public release has been redacted
from this document.
October 17,
2001
MEMORANDUM FOR
NATIONAL TAXPAYER ADVOCATE
FROM:
(for)
Pamela J.
Gardiner /s/ Scott E. Wilson
Deputy
Inspector General for Audit
SUBJECT: Final Audit Report - The National Taxpayer Advocate Needs to Ensure Operations Employees Receive Training to Identify Cases (Audit # 200110023)
This report
presents the results of our review to determine if the National Taxpayer Advocate (NTA)
implemented the provision of 26 U.S.C. § 7803(c) that requires
the NTA to develop guidance to be distributed to all Internal Revenue Service (IRS)
officers and employees outlining the criteria for referral of taxpayer inquiries to local
offices of the taxpayer advocate.[1]
In
summary, we found that the Taxpayer
Advocate Service (TAS) developed guidance outlining
the criteria for identifying cases to be referred to the TAS. The TAS provided guidance through internal
manuals, the IRS Intranet, and criteria awareness training.
However, it cannot ensure it has provided the training on identifying cases to the
intended IRS employees.
Local
Taxpayer Advocates should identify all IRS groups, functions, and units in their areas and
document who received criteria awareness training to ensure the TAS reaches all IRS
employees. In addition, to ensure training
can be scheduled with all appropriate employees,
the TAS should obtain national service-level agreements with the IRS functions that
require training for IRS employees on identifying taxpayer advocate cases.
Management’s
Response: The NTA agreed with the results
and conclusions presented in this report. The
TAS will work to identify the specific IRS groups, functions, and units that should
receive criteria awareness training. In
addition, TAS management developed draft national service-level agreements that require
training for IRS public contact employees on identifying TAS cases. Management’s comments have been incorporated
into the report where appropriate, and the full text of their comments is included as
Appendix V.
Copies of this
report are being sent to the IRS managers who are affected by the report recommendations. Please
contact me at (202) 622-6510 if you have questions or Daniel R. Devlin, Assistant
Inspector General for Audit (Headquarters Operations and Exempt Organizations Programs),
at (202) 622-8500.
The Taxpayer
Advocate Service Developed Guidance Outlining Criteria for Identifying Referrals
Appendix I – Detailed Objective, Scope, and Methodology
Appendix II – Major Contributors to This Report
Appendix III – Report Distribution List
Appendix IV – Taxpayer Advocate Service Case Referral Criteria
Appendix V – Management’s Response to the Draft Report
The Office of the National
Taxpayer Advocate (NTA) assists taxpayers in resolving problems that have not been
resolved through normal channels or who are suffering significant hardships. As a result of the Internal Revenue Service (IRS)
Restructuring and Reform Act of 1998,[2] the Taxpayer Advocate Service
(TAS) became independent of the IRS operating divisions and functional units.[3]
The TAS consists of 9 Area
Taxpayer Advocate Directors who report to the NTA and oversee the 74 Local Taxpayer
Advocates (LTA). The LTAs oversee the
associate advocates who work cases to help resolve taxpayer problems.
If a taxpayer is suffering, or is about to suffer, a significant hardship as a result of the manner in which the IRS is applying tax law, the NTA and LTAs have the authority to issue a Taxpayer Assistance Order (TAO).[4] A TAO may require the IRS to release taxpayers’ property or take an action permitted by law. It may also stop the IRS from taking an action.
The law requires the TAS to develop guidance outlining criteria for
referring taxpayer cases to local TAS offices and distribute it to all IRS officers and
employees.[5] In addition, a
NTA Fiscal Year 2001 objective was to train and encourage the IRS
operating divisions to identify and refer appropriate cases to the TAS. The TAS case referral criteria
can be found in Appendix IV.
Audit work was performed between March and August 2001 at TAS offices in Atlanta, Georgia; Fort Lauderdale, Florida; Milwaukee, Wisconsin; and Washington, DC. This audit was conducted in accordance with Government Auditing Standards. Detailed information on our audit objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II.
The TAS complied with the
requirements of the law by developing guidance outlining the criteria for identifying cases to be
referred to the TAS. The TAS published its criteria, including
the hardship criteria outlined in the law, in its own internal manual. It also provided this criteria on its internal web
site and, at the time of our field work, was in the process of helping the IRS update its
manuals to include references to the criteria.
In addition, the TAS developed and
began delivering criteria awareness training.
Local TAS instructors used a functional training guide[6]
to present the criteria awareness training to IRS employees during continuing professional
education seminars, workshops, and group discussions.
The group settings allowed the TAS instructors to provide examples and hypothetical
situations applicable to each group.
In our opinion, the functional training guide, when supplemented with examples during presentations, is an excellent method of providing guidance to the IRS employees who interact with the public.
The NTA cannot ensure that all appropriate employees received the criteria awareness training to help employees identify cases to be referred to the TAS.
Although the training was developed and delivered, the TAS did not have a process in place to track employees who had received the training. Also, the IRS functions did not require their employees to be trained, and the TAS did not have the authority to require IRS functions to participate in the training.
To help provide criteria awareness training to IRS employees, the LTAs prepared plans for providing training to IRS functions in their local areas. These plans were prepared and updated quarterly, and forwarded through the area directors to the TAS National Headquarters. Our review of 76 training plans and discussions with 3 LTAs and 3 area directors showed that the training plans had not been used to schedule and track training of specific groups or specific IRS employees.
The training plans were not designed to provide these specific details, and the LTAs we interviewed could not always tell us who they identified for the training and who received it. In two of the three offices visited, the operating division managers we spoke to did not remember receiving criteria awareness training from the TAS and did not know of upcoming meetings in which the TAS would be presenting training.[7]
In
addition, the TAS does not have agreements with
IRS functions to require the training for their employees.
This might have prevented the LTAs from providing criteria awareness training. Area directors encouraged LTAs to ask IRS managers
for opportunities to provide training. The
LTAs we interviewed advised us that IRS managers did not always respond to their requests
to provide or schedule training. Moreover,
the LTAs had no authority to provide or schedule the criteria awareness training to IRS
employees. In our opinion, a national
service-level agreement between the TAS and the appropriate IRS functions requiring the
training for appropriate IRS employees will help ensure IRS managers work with LTAs to
schedule training time for TAS training.
If
the TAS provided training to all appropriate IRS employees on identifying taxpayer cases
to be referred to the TAS, it may help ensure that taxpayer cases meeting the criteria are
properly identified and referred. It may
also prevent taxpayers that do not meet the criteria from being erroneously referred. This may help ensure the TAS can assist taxpayers
that are suffering significant hardship and resolve taxpayers’ problems that have not
been resolved through prior IRS contacts.
The NTA should:
1. Ensure the LTAs identify all IRS groups, functions, and units in their areas and document who received criteria awareness training.
2. Obtain national service-level agreements with the appropriate IRS functions that require training for IRS employees on identifying taxpayer advocate cases.
Management’s Response: The TAS will work with the operating and functional divisions at the national level to identify the specific IRS groups, functions, and units that should receive the training and make them available to LTAs to deliver the training at the local level. In addition, TAS management has developed draft national service-level agreements that require training for IRS public contact employees on identifying TAS cases, and have shared them with each of the operating division commissioners. The draft agreements provide that the TAS will develop and deliver TAS criteria awareness training during annual Continuing Professional Education sessions, group meetings, and other appropriate opportunities.
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this review was to determine if the National Taxpayer Advocate (NTA) has implemented the provision of 26 U.S.C. § 7803(c) that requires the NTA to develop guidance to be distributed to all Internal Revenue Service (IRS) officers and employees outlining the criteria for referral of taxpayer inquiries to local offices of the taxpayer advocate.[8] To accomplish this objective, we:
I. Determined if the NTA developed a program or process to ensure IRS employees had sufficient guidance (materials and training) to identify taxpayer cases to be referred to local Taxpayer Advocate Service (TAS) offices.
A.
Interviewed TAS officials responsible for ensuring compliance with
26 U.S.C. § 7803(c).
B. Interviewed TAS officials responsible for developing and distributing guidance (materials and training) to IRS employees.
II. Determined if the NTA effectively distributed the guidance (materials and training) to the appropriate IRS employees to ensure taxpayer inquiries were referred to the local TAS office.
A. Researched the IRS manual, IRS Intranet, and other resources for the appropriate case criteria information that would be provided at the national level.
B. Reviewed and analyzed the national and local plans for providing the case criteria guidance to IRS employees.
C. Contacted the area director and LTA in each of the following TAS offices: Atlanta, Georgia; Fort Lauderdale, Florida; and Milwaukee, Wisconsin; to determine and evaluate the methodology used to develop and distribute the guidance to IRS employees. We selected these offices based on travel funds and available resources. In addition, to minimize the impact on TAS resources in selected offices, we excluded those offices selected for a separate TAS audit being conducted by the Treasury Inspector General for Tax Administration (TIGTA) during the same time period as this review.
III. Determined if the guidance (materials and training) provided by the TAS to IRS employees met the intent of the Congress (i.e., was it sufficient to ensure taxpayer inquiries were referred to the local TAS office).
A. Discussed the case criteria with the appropriate TAS officials.
B. Obtained, reviewed, and evaluated copies of the guidance from the TAS National Headquarters and the selected offices distributed by the TAS to IRS employees.
C.
Interviewed a judgmental sample of six IRS managers at the selected offices. At each office, we contacted TIGTA IRS liaisons
and asked them to schedule meetings with a specified number of managers. The liaisons chose the managers we interviewed
based on managers’ availability during our visits to the audit locations. We did not need to select a statistically valid
sample of IRS managers since we were not using the results from this testing to project
results nationally.
Appendix
II
Major Contributors to This Report
Maurice
S. Moody, Assistant Inspector General for Audit (Headquarters Operations and
Exempt Organizations Programs)
Mary
V. Baker, Director
Augusta
R. Cook, Audit Manager
Alan
R. Beber, Senior Auditor
Kenneth
L. Carlson, Senior Auditor
Cindy
Harris,
Auditor
David
Lowe, Auditor
Appendix III
Commissioner N:C
Chief, Appeals AP
Commissioner, Large and Mid-Size Business Division LM
Commissioner, Small Business/Self Employed Division S
Commissioner, Tax Exempt and Government Entities Division T
Commissioner, Wage and Investment Division W
Director, Compliance (Small Business/Self Employed Division) S:C
Director, Compliance (Wage and Investment Division) W:CP
Director, Taxpayer
Account Operations TA:TAO
Director, Taxpayer Advocate Service Strategic Human Resources TA:HR
Chief Counsel CC
Director, Legislative Affairs CL:LA
Director, Office of Program Evaluation and Risk Analysis N:ADC:R:O
Office of Management Controls N:CFO:F:M
Audit Liaisons:
Small Business/Self Employed Division
S:C:CP
Wage and Investment Division W
National Taxpayer Advocate TA
Internal
Revenue Service (IRS) employees should forward any taxpayer contact meeting any of the
criteria listed below to the Local Taxpayer Advocate (LTA) for special handling:
1. The
taxpayer is suffering, or about to suffer, a significant hardship.
2. The
taxpayer is facing an immediate threat of adverse action.
3. The
taxpayer will incur significant costs if relief is not granted (including fees for
professional representation).
4. The
taxpayer will suffer irreparable injury, or long-term adverse impact, if relief is not
granted.
5. The
taxpayer has experienced a delay of more than 30 calendar days to resolve a tax-related
problem or inquiry. (However, if the Internal Revenue Manual or other
official internal document prescribes a normal time period for processing a taxpayer
submission or request, then the 30-day period will begin on the day following the
prescribed period. For example, the 30-day
period for a refund request would begin 6 weeks after the return is filed.)
6. The
taxpayer has not received a response or resolution to his/her problem by the date
promised.
7. A
system(s) or procedure(s) either failed to operate as intended or failed to resolve the
taxpayer’s problem or dispute within the IRS.
Note: If the taxpayer specifically requests Taxpayer
Advocate Service (TAS) assistance, the case should automatically be referred to the LTA.
Problems
meeting TAS criteria do not necessarily need to be sent to the TAS if they can be
immediately resolved by the function. It is
important all IRS employees handle potential TAS cases with the taxpayer’s best
interest in mind.
Appendix V
Management’s Response to the Draft Report
The
response was removed due to its size. To see
the complete response, please go to the Adobe PDF version of the report on the TIGTA
Public Web Page.
[1] 26 U.S.C. § 7803(c)(2)(C)(ii) (Supp. IV 1998).
[2] Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, 112 Stat. 685 (codified as amended in scattered sections of 2 U.S.C., 5 U.S.C., 5 app., 16 U.S.C., 19 U.S.C., 22 U.S.C., 23 U.S.C., 26 U.S.C., 31 U.S.C., 38 U.S.C., and 49 U.S.C.), 26 U.S.C. § 7803(c)(1)(A) (Supp. IV 1998).
[3] The IRS is divided into functional units (e.g., Appeals, Taxpayer Advocate Service, and Criminal Investigation) and four operating divisions (Wage and Investment Income, Small Business/Self-Employed, Large and Mid-Size Business, and Tax Exempt and Government Entities).
[4] 26 U.S.C. § 7811 (2000).
[5] 26 U.S.C. § 7803(c)(2)(C)(ii) (Supp. IV 1998).
[6] Taxpayer Advocate Service Training Guide for Operational Employees, Document 11189 (12-1999).
[7] The IRS Treasury Inspector General for Tax Administration liaisons selected the operating division managers we interviewed.
[8] 26 U.S.C. § 7803(c)(2)(C)(ii) (Supp. IV 1998).