Management Advisory Report:
The Internal Revenue Service Provided High Quality Service to Taxpayers
Calling the Toll-Free Line for Tax Forms
July
2002
Reference
Number: 2002-30-129
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.
July
24, 2002
MEMORANDUM FOR
COMMISSIONER, WAGE AND INVESTMENT DIVISION
FROM: Pamela J. Gardiner /s/ Pamela J. Gardiner
Deputy Inspector General for
Audit
SUBJECT: Final Management Advisory Report – The
Internal Revenue Service Provided High Quality Service to Taxpayers Calling the
Toll-Free Line for Tax Forms (Review # 200130040)
This
management advisory report presents the results of our review to determine the
effectiveness of the service provided to customers who call the Internal
Revenue Service’s (IRS) toll-free telephone system to order tax forms. We initiated this review as part of our
continuing audit coverage of the various toll-free product lines since, for the
past several years, the Congress and other stakeholders have raised concerns
about taxpayer access to the IRS’ toll-free telephone system.
In
summary, we found that the IRS provided high quality service to customers calling
the toll-free line for tax forms.
During the past two fiscal years, the IRS’ quality measurement system
shows that the accuracy rate in taking the phone orders for tax forms at the
Area Distribution Centers (ADCs) exceeded 98 percent. Although the percentage of
callers who are able to get through has been declining, the level of
service provided to customers on the tax forms line still exceeds the level of
service provided to customers who call the IRS’ other toll-free lines for tax
law questions, refund inquiries, and account issues.
The
future operations of the ADCs are likely to change because of two emerging
issues.
First, the IRS has selected certain ADC activities as commercial
activities to analyze for competitive sourcing. While the toll-free telephone operations within the ADCs will not
be included in the competitive sourcing analysis, there still could be an
impact on the toll-free operations. The
IRS does not expect to know before mid-2003 whether it will continue to operate
the selected ADC activities or whether a contractor will perform the work. Second, the IRS plans to realign the
toll-free line for tax forms within the Wage and Investment Division. Currently, the toll-free tax forms line is
managed by the Multimedia Publishing function of the Customer Assistance,
Relationships and Education function.
The realignment would place toll-free tax forms under the Customer
Account Services (CAS) function, on the same call routing platform with the
other main customer service toll-free operations. A team has been selected to
develop the transition and implementation plans, and the realignment is
expected to occur in either Fiscal Year 2003 or 2004. We were advised that both the outcome of the competitive sourcing
and the completion of the internal transition plans are needed to determine if
the toll-free operations will physically remain within the current ADC
facilities.
Once
the transition of the tax forms line to the CAS function has been completed, we
believe that the use of state-of-the-art voice recognition technology could
enable the tax forms ordering process to operate more efficiently and provide
top quality service to more customers.
Voice recognition is a rapidly
emerging “self-serve” technology that is being increasingly used in private
sector call centers. It has the
potential to successfully enhance customer service while reducing personnel
costs.
Management’s Response: Since this
management advisory report contains no formal recommendations, we did not require
a formal response from the IRS.
However, in reaction to the draft report, the IRS commented that it
continues to seek ways to minimize the taxpayer’s burden and improve overall
service and that it will research the possible use of speech recognition
technology to order tax forms.
Management’s complete
response to the draft report is included as Appendix IV.
Copies of this
report are also being sent to the IRS managers who are affected by the
report. Please contact me at (202)
622-6510 if you have questions, or Gordon C. Milbourn III, Assistant Inspector
General for Audit (Small Business and Corporate Programs), at (202) 622-3837.
Taxpayers
Are Being Provided High Quality Service on the Tax Forms Line Although Access
Is Declining
Two Emerging Issues Will Affect the
Future Operation of the Toll-Free Line for Tax Forms
Speech Recognition Technology Could
Help to Efficiently Serve More Customers
Appendix I – Detailed Objective, Scope, and Methodology
Appendix II – Major Contributors to This Report
Appendix III – Report Distribution List
Appendix IV – Management’s Response to the Draft Report
One of the primary forms of
communication between the Internal Revenue Service (IRS) and the public are tax
instructions, publications and forms.
Taxpayers use these instructions and publications to assist in the
preparation and submission of their tax forms.
The IRS has developed a network of programs and systems to make these
tax products readily available to the public.
In addition to the IRS’ annual tax package mailings to many taxpayers,
tax products can be obtained from IRS walk-in sites, banks, libraries, post
offices, and tax professionals. Tax
products can also be ordered from the IRS via the Internet, by fax, or by
calling its toll-free telephone system.
An average of about 9.6 million calls per year are placed to
the IRS’ toll-free line for tax forms (1-800-TAX-FORM). Incoming calls on this line are answered by
Order Entry Clerks (OECs) at three Area Distribution Centers (ADCs) located in
the eastern, central, and western parts of the country. The ADCs are responsible for receiving the
orders, shipping the forms, and controlling the inventory of forms in
warehouses. The OECs input the requests
into the Centralized Inventory Distribution System (CIDS), and the requests are
filled (generally within 72 hours) by Order Fulfillment Clerks at one of the
ADCs. The OECs at the ADCs also receive
internal orders for tax forms from other IRS functions and specialty programs
such as the Bank, Post Office, and Library (BPOL) Program.
The telephone operations for the
tax forms line are managed by the Multimedia Publishing function of the
Customer Assistance, Relationships and Education function of the IRS’ Wage and
Investment (W&I) Division. During FY
2001, approximately 564 Full-Time Equivalents (FTE) were used to operate the
ADCs at a cost of more than $18 million in salaries and benefits. Of these FTEs, about 109 were used to answer
the toll-free line in FY 2001. During
the same year, the IRS’ telecommunications cost for the tax forms line was
approximately $530,000.
We initiated this review as part of our continuing audit
coverage of the various toll-free product lines since, for the past several
years, the Congress and other stakeholders have raised concerns about taxpayer
access to the IRS’ toll-free telephone system.
In this review, we analyzed various IRS measures of the ADCs’ performance
and evaluated the various processes used to manage the ADC telephone
operations. This review was performed
between November 2001 and April 2002 at the Multimedia Publishing offices in
Washington, D.C., and at the ADCs located in Bloomington, Illinois, and
Richmond, Virginia.
The review was performed in accordance with the President’s
Council on Integrity and Efficiency’s Quality Standards for Inspections. Detailed information on our review
objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed
in Appendix II.
The IRS is providing high quality service to taxpayers who
call the toll-free line for tax forms.
During both FY 2001 and FY 2002, the IRS’ quality measurement system
shows that the ADCs achieved an accuracy rate of more than 98 percent in taking
telephone orders for tax forms from taxpayers.
As shown in Table 1, however, the Level of Access (LOA) and
the Level of Service (LOS) provided on the tax forms line, particularly in the
past two years, have declined from the performance achieved in prior years.
Table 1: Comparison of Level of Access and Level of
Service
Provided on the Tax Forms Line – FY 1998 through FY 2002
|
|
1998 |
1999 |
2000 |
2001 |
2002 |
|---|---|---|---|---|---|
|
LOA |
89.5% |
88.7% |
86.1% |
80.6% |
76.9% |
|
LOS |
80.9% |
79.3% |
75.3% |
69.7% |
66.6% |
Source: IRS Media and Publications function.
The tax forms line was used to answer tax rebate
questions during FY 2001
The significant decline in both LOA and LOS in FY 2001 was
largely attributable to the increased call demand that resulted from the
passage of the Economic Growth and Tax Relief Reconciliation Act of 2001. As a result of this new law, the IRS issued
approximately 112 million tax rebate notices and checks to taxpayers in
2001. The ADCs assisted the IRS’
Customer Account Services (CAS) function in answering about 600,000 calls from
taxpayers concerning the tax rebates.
As a result of this increased call demand, the number of callers to the
tax forms line that received busy signals significantly increased from the
prior year, driving down both the LOA and LOS measures.
Nevertheless, taxpayers who called the tax forms line during
FY 2001 were more likely to receive service than those taxpayers who called
other IRS toll-free lines. During FY
2001, taxpayers attempted nearly 9.3 million calls to the IRS’ toll-free line
for tax forms. This represented almost 10
percent of all call attempts to the IRS’ toll-free enterprise. The ADCs provided a LOS of about 70 percent
on the tax forms line by answering more than 6.5 million of these calls. These included 4.8 million calls that were
answered by live assistors and another 1.7 million calls that were answered by
automated services. Although the FY
2001 LOS goal of 75 percent for the tax forms line was not achieved, the LOS
provided to taxpayers on this toll-free line was, as shown in Figure 1, 19
percent higher than the combined LOS provided by the IRS’ three primary toll-free
lines for tax law inquiries (1-800-829-1040), refund inquiries
(1-800-808-4262), and notices, letters and bills (1-800-829-8815).
Figure 1. Comparison of Level of Service Provided by
the ADCs and Other IRS Toll-Free Product Lines (FY 2001)
Figure1 was removed due to its size. To see the figure, please go to the Adobe
PDF version of the report on the TIGTA Public Web Page.
Staffing for the tax forms line was reduced for FY
2002
The number of FTEs allocated for order entry activities,
which includes answering calls on the tax forms line, was reduced from 86 in FY
2001 to 75 in FY 2002. In turn, the IRS
reduced its level of service goal for the tax forms line to 67 percent for FY
2002. The IRS also changed its FY 2002
measure to Customer Service Representative Level of Service (CSR LOS) for the
tax forms line, as well as the other toll-free product lines. This new measure is intended to represent
the percentage of callers who wanted to speak to an assistor that were
successful in getting through to an assistor.
Through April 20, 2002, the toll-free line for tax forms had
achieved a CSR LOS of more than 72 percent.
As shown in Figure 2, the CSR LOS achieved on the tax forms line was
nearly five percent higher than the CSR LOS achieved by the IRS’ three primary
customer service toll-free lines.
Figure 2.
Comparison of CSR LOS Provided by the ADCs and Other IRS Toll-Free
Product Lines (FY 2002 through April 20)
Figure 2 was
removed due to its size. To see the
figure, please go to the Adobe PDF version of the report on the TIGTA Public Web
Page.
The costs of the telephone operations at the ADCs are
significantly below the call center industry
Considering only salaries, benefits, and telecommunications
costs, the average cost per assistor-answered call was less than $1 during FY
2001. While the average cost per call
can vary dramatically by industry, it averages about $4 per contact across all
call center industries.
At the time we completed our
review, two emerging issues were facing the ADCs that will have an unknown
impact on the toll-free line for tax forms.
The first issue is the potential contracting out of certain ADC
activities. The second is the impending
realignment of the ADC telephone operations to the W&I Division’s CAS
function.
The IRS will compete selected ADC operations with the
private sector
Competitive sourcing is an
acquisition process that compares private sector and government costs for a
particular function or activity to determine the most cost-effective way for
the government to buy those services.
The President has identified competitive sourcing as one of five
management objectives for his administration.
As a result, all federal agencies are required to compete 5 percent of
their commercial activities during FY 2002, and an additional 10 percent by the
end of FY 2003.
To comply with the President’s
goals, the IRS performed a Competitive Sourcing Feasibility Study and decided
to have certain ADC activities compete with private sector contractors. Through this competition, the IRS will
analyze the workload and build an in-house “most efficient organization” which
will eventually be competed with the private sector.
The IRS considers the ADC
telephone operations that support the toll-free line for tax forms to be
outside the scope of the competitive sourcing process and will not include them
in the Performance Work Statement that will be subject to competitive
bidding. However, there still could be
an impact on the toll-free operations.
The IRS does not expect a determination before mid-2003 whether it will
continue to operate the ADCs as it does now or whether a contractor will
perform some of the work.
The IRS plans to move the tax forms line to a new call
routing platform
At the time we completed our review, the IRS also had long
range plans to realign the ADC telephone policy and operations into the W&I
Division’s CAS organization. A team has
been selected to develop transition and imple-mentation plans for the realignment. The realignment is anticipated to occur in
either FY 2003 or FY 2004.
The realignment of the toll-free line for tax forms may
improve the level of service to taxpayers because it will place the line on a
different call router. Currently, calls
are routed to each ADC based on a call percentage allocation. The Eastern and Central ADCs each receive 40
percent of the calls and the Western ADC receives 20 percent of the calls. After the realignment, calls will be routed
using the same call router platform currently used by many other toll-free
lines in the IRS toll-free enterprise.
This will allow calls to be routed to the next available OEC, rather
than allocating a percentage of the calls to each ADC.
We were advised that both the outcome of the competitive
sourcing process and the completion of the internal transition plans to move
the tax forms line to the CAS function are needed before a decision can be made
on whether the toll-free operations will physically remain in the current ADC
facilities. We were also advised that
it was uncertain whether the ADC toll-free operations that support internal IRS
customers and specialty programs, such as the BPOL, will also transition to the
CAS function.
Several years ago, IRS management performed a study to
determine the feasibility of further automating the toll-free line for tax
forms. At that time, management decided
it would be too complicated to provide all of the needed menu programming, and
that it would lengthen the time customers spend on the telephone line, thereby
increasing costs.
However, technological improvements in recent years suggest
that the W&I Division should explore the feasibility of modernizing the
operations with state-of-the-art speech recognition technology to allow callers
to place orders for tax forms without speaking to an IRS employee. This enhancement would further improve the
IRS’ ability to handle call volume during peak time periods and could also significantly reduce costs for the IRS.
In an article published in the
March 2002 issue of Call Center Management Review, speech recognition
technology is said to be receiving high marks from consumers. It is an emerging “self-serve” technology
that has the potential to enhance customer service while reducing personnel
costs. The May 2002 issue of Call
Center Management Review states that, “Dismissed as unreliable a decade
ago, speech technology is now a viable and customer-friendly solution to help
absorb heavy call volume.”
In addition, another periodical used the following example
to demonstrate the effectiveness of the speech recognition technology now
available. A leading investment company
expanded its use of speech
technology to:
Once the transition of the tax forms line to the CAS
function has been completed, we believe that the use of state-of-the-art speech
recognition technology could potentially enable the tax forms ordering process
to operate more efficiently and provide top quality service to more customers.
Management’s Response: Since this management advisory report contains no
recommendations, we did not require a formal response from the IRS. However, in reaction to the draft report,
the IRS commented that it continues to seek ways to minimize the taxpayer’s
burden and improve overall service and that it will research the possible use
of speech recognition technology to order tax forms.
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this review was to evaluate the
effectiveness of the service provided to customers who call the Internal
Revenue Service’s (IRS) toll-free telephone system to order tax forms.
To accomplish our objective, we:
I.
Reviewed call center
management practices at the Area Distribution Centers (ADC) and evaluated
whether incoming calls were handled in a manner that promoted optimum service
to taxpayers while ensuring productive use of available resources.
A.
Performed a walk-through at
two of the three ADCs, observed incoming call center processes and practices,
and evaluated the ability of call center management to monitor and react to
real-time developments.
B.
Interviewed management and
systems analysts to determine how calls are routed to the three ADCs and to
individual Order Entry Clerks (OEC).
C.
Evaluated the factors used by
management for determining how many trunks are needed to effectively handle
telephone call load.
D.
Evaluated the effectiveness
of the Voice Response Unit /Automatic Call Distributor configuration.
E.
Explored the potential causes
for the declining percentage of calls answered by automation.
F.
Determined how level of
service objectives and other efficiency goals (e.g., average handle time,
after-call time, cost per call, etc.) were set and measured by management.
G.
Determined whether response
time (e.g., elapsed time from the taxpayer’s telephone call to the mailing of
the requested forms) objectives or goals had been established and were being
met.
H.
Evaluated the process for
requesting and budgeting resources for the ADCs and determined how the
resulting allocated funding affects the setting of performance objectives and
the delivery of services to taxpayers.
I.
Evaluated the information and
processes used by management in forecasting call demand, calculating resource
needs, establishing assistor groups by skill set, scheduling resources, and
ensuring adherence to schedule.
J.
Evaluated the processes that
call center management used to allocate Full-Time Equivalents (FTE) among
permanent, seasonal, and temporary employees.
K.
Interviewed management to
determine the extent of other duties performed by OECs and how it affected
their availability to handle incoming calls.
L.
Interviewed management to
determine the nature and extent of training given to the OECs answering the
toll-free tax forms line.
M.
Determined how quality standards were set and evaluated the
processes for measuring the quality of services provided to taxpayers on the
tax forms line.
N.
Determined the effectiveness
of processes used for measuring customer satisfaction.
II.
Obtained and evaluated information
about ongoing initiatives and future actions planned to improve the service
provided to taxpayers by the tax forms line.
A.
Obtained and evaluated plans
to modernize the ADC operations.
B.
Determined the scope and
status of the business case analysis on competitive sourcing of the ADCs.
C.
Determined the status of
plans to realign the tax forms line under the Wage and Investment Division’s
Customer Account Services function and the Integrated Call Router platform.
Appendix II
Major Contributors to This Report
Gordon C. Milbourn III, Assistant
Inspector General for Audit (Small Business and Corporate Programs)
Philip Shropshire, Director
William E. Stewart, Audit Manager
Denise M. Gladson, Auditor
Carol
A. Rowland, Auditor
Una K. Smith, Auditor
Appendix III
Commissioner N:C
Deputy
Commissioner, Wage and Investment Division
W
Director, Customer
Assistance, Relationships and Education, Wage and Investment Division
W:CAR
Director,
Media and Publications, Wage and Investment Division W:CAR:MP
Director,
Multimedia Publishing, Wage and Investment Division W:CAR:MP:M
Chief
Counsel CC
National
Taxpayer Advocate TA
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:
Commissioner, Wage and Investment
Division W
Director, Customer Assistance,
Relationships and Education, Wage and Investment
Division W:CAR
Appendix IV
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.