Taxpayer Assistance Center Employees Improved the Accuracy
of Answers to Tax Law Questions but Answered Some Questions Beyond Their Level
of Training
July 2003
Reference Number:
2003-40-157
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
31, 2003
MEMORANDUM FOR
COMMISSIONER, WAGE AND INVESTMENT DIVISION
FROM: Gordon C. Milbourn III /s/ Gordon C.
Milbourn III
Assistant Inspector General
for Audit (Small Business and
Corporate Programs)
SUBJECT: Final Audit Report - Taxpayer Assistance Center Employees Improved
the Accuracy of Answers to Tax Law Questions but Answered Some Questions Beyond
Their Level of Training (Audit # 200340017)
This
report presents the results of our review to determine if the Internal Revenue
Service (IRS) provides accurate and timely responses to taxpayers’ tax law
questions. In addition, Treasury
Inspector General for Tax Administration (TIGTA) auditors who made anonymous
visits to the Taxpayer Assistance Centers (TAC) assessed whether IRS employees
adhered to operating guidelines on referral procedures and were professional
and courteous, and whether TAC addresses and office hours made available to
taxpayers were accurate.
This
review was conducted as a result of an amendment to the Treasury spending bill
for Fiscal Year (FY) 2002 proposed by Senator Byron Dorgan (Democrat - North
Dakota), then Chairman of the Subcommittee on Treasury and General
Government. The amendment requires us
to conduct visits to all TACs and report to the Congress on whether taxpayers
are provided correct and prompt answers to their questions. We are conducting anonymous visits to all
TACs over a 2-year period. This is the
eighth in a series of bi-monthly reports that we are issuing in response to the
amendment to the Treasury spending bill.
During March and April 2003, TIGTA auditors made 69
anonymous visits to 35 TACs. The
auditors asked 138 tax law questions and determined that IRS employees provided
incorrect answers to some of them. For
example, IRS employees:
·
Correctly answered 100 (72
percent) of 138 questions.
·
Incorrectly answered 34 (25 percent) of 138 questions.
·
Referred the auditor to IRS publications and generally
advised the auditor to do his or her own research to find the answer to 2 (1
percent) of 138 questions.
·
Offered to prepare a written referral for 2 (1 percent) of
138 questions.
We commend the IRS for the
corrective actions it has taken in response to our previously issued semiannual
and bi-monthly reports. We believe the
increase in accuracy rates compared to those in the same period in Calendar
Year (CY) 2002 can be directly correlated to these actions. For example, during March and April 2003,
IRS employees correctly answered 25 percent more questions and referred 91
percent fewer taxpayers to publications than in March and April 2002.
In January 2003, we began
assessing whether IRS employees adhered to operating procedures to refer to the
IRS toll-free telephone lines or Internet those taxpayer questions that were
outside the scope of services that employees should have been trained to
answer. In addition to scheduled
visits, TIGTA auditors completed visits to 47 other TACs. The auditors asked 112 “out of scope”
questions and determined that employees did not follow referral procedures for
69 (62 percent) of these questions.
We also evaluated whether
TAC addresses and office hours provided to taxpayers via the Internet,
toll-free telephone numbers, and automated telephone messaging system matched
the information posted at the TACs.
Auditors observed the following:
·
Office hours for 23
(66 percent) of the 35 TACs with office hours posted on the Internet matched
the hours posted at the TAC.
·
Office hours for 21 (60 percent) of the 35 TACs with office
hours posted on the toll-free telephone
numbers matched the hours posted at the TAC.
·
Office hours for 22 (65
percent) of the 34 TACs with office hours posted on the IRS automated telephone messaging system matched the
hours posted at the TAC.
·
Addresses posted at 26
(84 percent) of 31 TACs matched the addresses listed on the Internet and
toll-free telephone numbers.
· Addresses posted at 25 (83 percent) of 30 TACs matched the addresses listed on the automated telephone messaging system.
The IRS informed us
that the data available to taxpayers from the Internet were the most
reliable. Therefore, we used these data
as a baseline to expand our analysis to determine if address and office hours
provided to taxpayers from the Internet matched those on the IRS toll-free
telephone numbers and automated telephone messaging system. The results were as follows:
·
Addresses listed on the
Internet matched the addresses on the toll-free telephone numbers for all 35
TACs.
·
Addresses listed on the
Internet matched the addresses on the automated telephone messaging system for
34 (100 percent) of 34 TACs.
·
Office hours listed on
the Internet matched those on the toll-free telephone numbers for 29 (83
percent) of 35 TACs.
·
Office hours listed on
the Internet matched those on the automated telephone messaging system for 32
(94 percent) of 34 TACs.
Finally, auditors observed
the following during visits to the TACs:
·
IRS employees were professional and courteous to the TIGTA
auditors in 67 (97 percent) of the 69 visits.
·
Wait time for service was 1 hour or less for 64 (93 percent)
of the 69 visits.
This
report is to advise IRS management of the results of our review. We are not making recommendations to the IRS
in the bi-monthly reports. However, we
plan to issue a semiannual trend report during the first quarter of FY 2004
that will include appropriate recommendations to help ensure taxpayers are
referred to employees that can provide accurate responses to their tax law
questions. Auditors will continue
making visits to the TACs throughout CY 2003.
We will also continue to issue bi-monthly reports on the results to the
IRS and the Congress.
Copies of this
report are also being sent to the IRS managers who are affected by the report
findings. Please contact me at (202)
622-6510 if you have questions or Michael R. Phillips, Assistant Inspector
General for Audit (Wage and Investment Income Programs), at (202) 927-0597.
Taxpayers Received Answers to Tax Law Questions Employees Were Not Trained to Answer
Auditors Generally Had Positive Experiences When They Visited Taxpayer Assistance Centers
Appendix I – Detailed Objective, Scope, and Methodology
Appendix II – Major Contributors to This Report
Appendix III – Report Distribution List
Appendix IV – States Visited During March and April 2003
Appendix V – Management’s Response to the Draft Report
The Senate Committee on Appropriations was deeply concerned about the findings in a Treasury Inspector General for Tax Administration (TIGTA) audit report on the Internal Revenue Service’s (IRS) Taxpayer Assistance Centers (TAC). That report showed auditors did not receive accurate or sufficient answers to 73 percent of their tax law questions posed during anonymous visits to the TACs during January and February 2001. Based on the results of that review, Senator Byron Dorgan (Democrat - North Dakota), then Chairman of the Subcommittee on Treasury and General Government, proposed an amendment to the Treasury spending bill for Fiscal Year (FY) 2002. The amendment requires us to conduct visits to all TACs and report to the Congress as to whether taxpayers are provided correct and prompt answers to their questions. Auditors are conducting anonymous visits to all TACs over a 2-year period.
The IRS’ Field Assistance (FA) office in the Wage and Investment (W&I) Division has overall responsibility for the TACs. The TACs exist primarily to serve taxpayers who choose to seek help from the IRS in person. The IRS employees who work in the TACs provide assistance in interpreting tax laws and regulations, preparing some tax returns, resolving inquiries on taxpayer accounts, and providing various other services designed to minimize the burden on taxpayers in satisfying their tax obligations.
There are currently no statistics on the percent of time spent by employees in the TACs on the services detailed above. The FA office is using FY 2002 data as a baseline to establish standards and other management information in this area.
There are approximately 400 TACs located throughout the United States (U.S.), including Washington, D.C. According to the IRS, the TACs served approximately 4.3 million taxpayers between January and April 2003. Approximately 916,000 of these taxpayers visited the TACs for assistance with the tax law.
In addition to the anonymous visits being performed by TIGTA auditors, the IRS FA Quality Review Staff began visiting TACs in October 2002 to anonymously ask tax law questions within the scope of services that TAC employees should have been trained to answer. The results of these reviews will provide each employee’s manager specific feedback on the quality of service provided in the TAC. The IRS has established an accuracy goal of 80 percent for FY 2003. The IRS also plans to use our Calendar Year (CY) 2002 results as baseline figures to measure improvement during FY 2003.
Our questions relate to 21 tax law topics that are within the scope of services. The questions were designed to cover a wide range of tax law topics to provide an overall assessment of whether taxpayers are receiving correct answers to questions that an individual taxpayer might ask when he or she visits a TAC. In May 2003, auditors changed the scope of the questions or added additional scenarios that are more applicable to the types of questions taxpayers ask subsequent to the filing season.
Beginning in January 2003, we also began evaluating whether employees adhered to operating procedures to refer to the IRS toll-free telephone lines or Internet (R-mail) those taxpayer questions that were outside the scope of services that employees should have been trained to answer.
This report is the eighth in a series of bi-monthly reports that we are issuing on the results of the visits to the TACs, in response to the amendment to the Treasury spending bill. The review was performed in the IRS’ Customer Assistance, Relationships, and Education office in the W&I Division in March and April 2003. TIGTA auditors anonymously visited 35 TACs in 12 states. Another 47 TACs in 17 states were visited as part of our referral assessment (see Appendix IV for specific states visited).
This review was conducted in accordance with Government Auditing Standards. However, we did not determine the cause and effect for the findings and will make no recommendations in the bi-monthly reports. We will issue a semiannual trend report during the first quarter of FY 2004 that will contain these elements. Detailed information on the objective, scope, and methodology of this review is presented in Appendix I. Major contributors to the report are listed in Appendix II.
During March and April 2003, IRS employees correctly answered 25 percent more questions and referred 91 percent fewer taxpayers to publications than in March and April 2002. We commend the IRS for the corrective actions it has taken in response to our previously issued semiannual and bi-monthly reports. We believe the increase in accuracy rates compared to those in the same period in CY 2002 can be directly attributed to these actions. The TIGTA auditors made 69 anonymous visits to 35 TACs and asked 138 tax law questions during March and April 2003. The results were as follows:
· One hundred (72 percent) of the 138 questions were correctly answered. However, the IRS employee provided a correct answer to 2 of the 100 questions without asking all of the required questions outlined in the tax law instructions and publications. By not using available resources to ask all required questions, IRS employees are making assumptions and providing answers without considering relevant facts to ensure the answer given is correct.
· Thirty-four (25 percent) of the 138 questions were incorrectly answered. For example, the IRS employee stated that the auditor could deduct the donation made to a charity. However, the employee did not ask if the auditor received a receipt for the donation. To claim a donation as a deduction, a taxpayer must have a statement from the charitable organization showing the amount donated.
· Two (1 percent) of the 138 questions resulted in the IRS employee referring the auditors to a publication and generally advising the auditors to do their own research to find the answers to the questions. For example, the auditor asked if his or her friend could claim interest paid on a student loan. The IRS employee obtained Form 1040A in his or her reference binder and identified line 18 as the place to enter a student loan interest deduction. Next, the employee obtained the Form 1040A instruction booklet, turned to a worksheet, and said the friend would have to work through the worksheet to determine if the interest is deductible. The employee did not provide an answer to the auditor’s question.
· Two (1 percent) of the 138 questions resulted in the IRS employee offering the auditor a written referral. For example, the auditor stated he or she had sold some land and wanted to know what to do about the money from the sale. The IRS employee researched on the computer and in a publication but could not find the answer. Therefore, the employee prepared a written referral.
The table below provides a breakdown of the accuracy of the answers to our questions.
|
|
Correct |
Correct but Incomplete |
Incorrect |
Ref. to Pub. |
Service Denied |
Written Referral |
|---|---|---|---|---|---|---|
|
Responses |
98 |
2 |
34 |
2 |
0 |
2 |
|
Percentages |
71% |
1% |
25% |
1% |
--- |
1% |
Source:
Anonymous visits performed by TIGTA auditors.
The chart below shows a comparison of CY 2002 to CY 2003 accuracy rates.
The chart was
removed due to its size. To see the
chart, please go to the Adobe PDF version of the report on the TIGTA Public Web
Page.
In January 2003, we began our assessment of whether IRS
employees adhered to operating guidelines that require the referral of tax law
questions outside the scope of services they have been trained to answer. In addition to scheduled visits, TIGTA
auditors completed visits to 47 additional TACs. The auditors asked 112 “out of scope” questions and determined
that employees did not follow referral procedures in providing answers to 69
(62 percent) of the questions asked.
IRS operating guidelines require IRS
employees that receive questions beyond their level of training to offer to
call the IRS toll-free telephone lines on behalf of the taxpayer or to submit
the question in writing to subject-matter experts via the Internet
(R-mail). The table below provides a
breakdown of IRS employees’ answers to tax law questions beyond their level of
training.
|
|
Correctly Referred |
Questions Answered (69) |
||
|---|---|---|---|---|
|
Correct |
Incorrect |
Ref. to Pub. |
||
|
Responses |
43 |
36 |
14 |
19 |
|
Percentages |
38% |
52% |
20% |
28% |
Source: Anonymous visits performed by TIGTA
auditors.
Auditors also assessed the quality of assistance provided by IRS employees including whether they were professional and courteous, the wait time for service, and whether employees’ names were given or visible. Auditors generally had positive experiences. The following table shows a breakdown of the quality of assistance results:
|
|
Occurrences |
Percent |
|---|---|---|
|
Employee Professional/Courteous |
67 |
97% |
|
Wait Time 0-15 minutes |
38 |
55% |
|
Wait Time 16-30 minutes |
15 |
22% |
|
Wait Time 31-45 minutes |
7 |
10% |
|
Wait Time 46-60 minutes |
4 |
6% |
|
Wait Time Greater Than 1 hour |
5 |
7% |
|
Employee Name Given or Visible |
55 |
80% |
Source: Anonymous visits performed by TIGTA
auditors.
TIGTA auditors found that TAC addresses and office
hours made available to taxpayers did not always match the information posted
at the TACs. Taxpayers can access the
IRS Internet web site and follow the appropriate links to obtain the addresses
and office hours of the TACs located in their state. Taxpayers that do not have access to the Internet may call
toll-free numbers or the IRS automated telephone messaging system to obtain
this information.
In our first semiannual report, we made no
recommendations that addressed TAC addresses and office hours because of the
IRS’ response to one of our bi-monthly reports. However, we continued to identify concerns in this area and
anticipate including recommendations in our second semiannual trend report to
ensure TAC addresses and office hours made available to taxpayers are accurate.
Beginning in January 2003, we evaluated whether TAC
addresses and office hours provided to taxpayers via the Internet, toll-free
telephone numbers, and automated telephone messaging system matched the
information posted in the TACs.
Auditors found the following.
Addresses and office hours made available to taxpayers did not always match the addresses and office hours posted at the TACs
· Office hours for 23 (66 percent) of the 35 TACs with office hours posted on the Internet matched the hours posted at the TAC.
· Office hours for 21 (60 percent) of the 35 TACs with office hours posted on the toll-free telephone numbers matched the hours posted at the TAC.
· Office hours for 22 (65 percent) of the 34 TACs with office hours posted on the IRS automated telephone messaging system matched the hours posted at the TAC.
· Addresses posted at 26 (84 percent) of 31 TACs matched the addresses listed on the Internet and toll-free telephone numbers.
· Addresses posted at 25 (83 percent) of 30 TACs matched the addresses listed on the IRS automated telephone messaging system.
The IRS informed us that the addresses and office hours available to taxpayers from the Internet were the most reliable. As a result, we used these data as a baseline to expand our analysis to determine if addresses and office hours provided to taxpayers from the Internet matched those on the IRS toll-free telephone numbers and automated telephone messaging system.
Addresses but not office hours provided to taxpayers that accessed the IRS Internet web site matched the information provided by the IRS toll-free telephone numbers and automated telephone messaging system
The tables below show the results of our comparison of addresses and office hours made available to taxpayers that access the Internet to the information made available to taxpayers that call the IRS toll-free telephone numbers or automated telephone messaging system.
|
|
Occurrences |
Percent |
|---|---|---|
|
Address Correct |
35 |
100% |
|
Office Hours Correct |
29 |
83% |
|
|
Occurrences |
Percent |
|---|---|---|
|
Address Correct |
34 |
100% |
|
Office Hours Correct |
32 |
94% |
Appendix I
Detailed Objective, Scope,
and Methodology
The overall objective of the review was to determine if the Internal Revenue Service (IRS) provides accurate and timely responses to taxpayers’ tax law questions. In addition, Treasury Inspector General for Tax Administration auditors who made anonymous visits to the Taxpayer Assistance Centers (TAC) assessed whether IRS employees adhered to operating guidelines on referral procedures and were professional and courteous, and whether the TAC addresses and office hours made available to taxpayers were accurate. We did not determine the cause and effect for the findings, so we are making no recommendations in the bi-monthly reports.
To achieve this objective, auditors performed the following tests:
I. Determined if the IRS provided quality service and accurate responses to tax law inquiries at the 35 TACs visited. Auditors asked 138 tax law questions that an individual taxpayer might ask. Auditors developed questions based on the training provided to Tax Resolution Representatives (TRR) during the fall of 2001 and the scope of services for tax law assistance prescribed in the Fiscal Year 2002 Field Assistance (FA) Operating Procedures.
II. Determined
if TRRs followed FA Operating Procedures to refer questions that were outside
the scope of services they should have been trained to answer. In addition to scheduled visits, auditors
completed visits to 47 additional TACs and asked 112 questions that were beyond
the TRRs’ level of training.
III. Determined
the quality of service provided by the TRRs.
Appendix II
Major Contributors to This Report
Michael R. Phillips, Assistant Inspector General for Audit
(Wage and Investment Income Programs)
Kerry Kilpatrick, Director
Russell Martin, Acting Director
Frank Jones, Acting Audit Manager
Bernice
Banks, Senior Auditor
Tanya
Boone, Senior Auditor
Pamela DeSimone, Senior Auditor
Deborah Drain, Senior Auditor
Robert Howes, Senior Auditor
Edie Lemire, Senior Auditor
Grace Terranova, Senior Auditor
Robert Baker, Auditor
Lena Dietles, Auditor
Jerry Douglas, Auditor
Roberta Fuller, Auditor
Andrea Hayes, Auditor
Kathy Henderson, Auditor
Mary Keyes, Auditor
Appendix III
Commissioner N:C
Deputy Commissioner for Services and Enforcement N:SE
Deputy
Commissioner, Wage and Investment Division
W
Director, Customer
Assistance, Relationships, and Education
W:CAR
Director, Strategy and Finance W:S
Director, Field Assistance W:CAR:FA
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:AR:M
Appendix IV
States Visited During March and April 2003
The map was removed due to its
size. To see the map, please go to the
Adobe PDF version of the report on the TIGTA Public Web Page.
The 12 states visited where
auditors asked questions within the scope of services include: Alabama, Colorado, Connecticut, Florida,
Georgia, Iowa, Massachusetts, Mississippi, Missouri, Nebraska, Rhode Island,
and South Carolina.
The 17 states visited where
auditors asked questions outside the scope of services include: Alabama, Colorado, Connecticut, Florida,
Georgia, Louisiana, Maine, Massachusetts, Mississippi, Missouri, New Hampshire,
New York, Rhode Island, South Carolina, Tennessee, Vermont, and Wyoming.
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.