Taxpayer Assistance Center Employees Continued to Improve
the Accuracy of Answers to Tax Law Questions During May and June 2003
September 2003
Reference Number:
2003-40-198
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.
September
9, 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
Continued to Improve the Accuracy of Answers to Tax Law Questions During May
and June 2003 (Audit # 200340018)
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 ninth in a series
of bi-monthly reports that we are issuing in response to the amendment to the
Treasury spending bill.
During
May and June 2003, TIGTA auditors made 64 anonymous visits to 32 TACs. The auditors asked 128 tax law questions and
determined that IRS employees provided incorrect answers to some of them. For example, IRS employees:
·
Correctly answered 94 (73
percent) of 128 questions.
·
Incorrectly answered 30 (23 percent) of 128 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 (2
percent) of 128 questions.
·
Correctly offered to call the toll-free telephone line for 2
(2 percent) of 128 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 attributed to these actions. For example, during May and June 2003, IRS
employees correctly answered 7 percent more questions and referred 94 percent
fewer taxpayers to publications than in May and June 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, our auditors completed visits to 18 other TACs. The auditors asked 67 “out of scope”
questions and determined that employees did not follow referral procedures for
23 (34 percent) of these questions.
We also evaluated whether
TAC addresses and office hours provided to taxpayers via the Internet,
toll-free telephone numbers, and the automated telephone messaging system
matched the information posted at the TACs.
Auditors observed the following:
·
Office hours for 26
(81 percent) of the 32 TACs with office hours posted on the Internet and the
automated telephone messaging system matched the hours posted at the TAC.
·
Office hours for 27 (84 percent) of the 32 TACs with office
hours posted on the toll-free telephone
numbers matched the hours posted at the TAC.
· Addresses posted at 28 (90 percent) of 31 TACs matched the addresses listed on the Internet, toll-free telephone numbers, and 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 addresses and office hours provided to
taxpayers from the Internet matched those on the IRS toll-free telephone
numbers and the automated telephone messaging system. The results were as follows:
·
Addresses listed on the
Internet matched the addresses on the toll-free telephone numbers and the
automated telephone messaging system for all 32 TACs.
·
Office hours listed on
the Internet matched those on the toll-free telephone numbers for 29 (91
percent) of 32 TACs.
·
Office hours listed on
the Internet matched those on the automated telephone messaging system for 30
(94 percent) of 32 TACs.
Finally, auditors observed
the following during visits to the TACs:
·
IRS employees were professional and courteous to the TIGTA
auditors in 64 (100 percent) of the 64 visits.
·
Wait time for service was 1 hour or less for 64 (100
percent) of the 64 visits.
This
report is to advise IRS management of the results of our review. We do not make 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.
Management’s Response: IRS
management appreciated our recognition of the corrective actions they took
which increased accuracy rates compared to the same period for CY 2002. Management continues to take steps to
improve accuracy in the TACs. Their
long-term approach to improving quality is implementation of Embedded Quality,
an approach which focuses on standardized measures, employee monitoring, and
feedback at the group level.
The IRS continues to disagree with including referrals to publications and service denied when computing the accuracy rates. Management’s complete response to the draft report is included as Appendix V.
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 Some 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 May and June 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 5.5 million taxpayers between January and June 2003. Approximately 1.2 million 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 ninth 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 May and June 2003. TIGTA auditors anonymously visited 32 TACs in 11 states. Another 18 TACs in 8 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 include appropriate recommendations to help ensure that taxpayers are referred to employees that can provide accurate responses to their tax law questions. Detailed information on our objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II.
During May and June 2003, IRS employees correctly answered 7 percent more questions and referred 94 percent fewer taxpayers to publications than in May and June 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 64 anonymous visits to 32 TACs and asked 128 tax law questions during May and June 2003. The results were as follows:
· Ninety-four (73 percent) of the 128 questions were correctly answered. However, the IRS employees provided correct answers to 7 of the 94 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 answers given are correct.
· Thirty (23 percent) of the 128 questions were incorrectly answered. For example, the IRS employee stated that the auditor was eligible to receive the retirement credit. However, the employee did not ask if the auditor was a full-time student. To get the retirement credit, a taxpayer must not have been a full-time student in 2002.
· Two (2 percent) of the 128 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 he or she and his or her spouse could get the adoption credit. The IRS employee obtained Qualified Adoption Expenses (Form 8839), the related instructions, and Your Federal Income Tax (Publication 17). The employee told the auditor to read the instructions and complete the Form 8839. The employee did not provide an answer to the auditor’s question.
· Two (2 percent) of the 128 questions resulted in the IRS employee correctly offering to refer the auditor to the IRS toll-free tax law telephone number. For example, the auditor asked if his or her sister could deduct the money she had donated to a charity. The IRS employee read a publication but could not find the answer. Therefore, the employee referred the auditor to the IRS toll-free tax law telephone number.
The following table provides a breakdown of the accuracy of the answers to our questions.
|
Tax Law Questions (128 questions asked) |
||||||
|
|
Correct |
Correct but Incomplete |
Incorrect |
Ref. to Pub. |
Service Denied |
Correct |
|
Responses |
87 |
7 |
30 |
2 |
0 |
2 |
|
Percentages |
68% |
5% |
23% |
2% |
--- |
2% |
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 18 additional TACs.
The auditors asked 67 “out of scope” questions and determined that
employees did not follow referral procedures in providing answers to 23 (34
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.
|
Out of Scope Questions (67 questions asked) |
||||
|
|
Correctly Referred |
Questions Answered (23) |
||
|
Correct |
Incorrect |
Ref. to Pub. |
||
|
Responses |
44 |
5 |
12 |
6 |
|
Percentages |
66% |
22% |
52% |
26% |
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.
|
Quality of Assistance |
||
|
|
Occurrences |
Percent |
|
Employee
Professional/Courteous |
64 |
100% |
|
Wait Time 0-15
Minutes |
56 |
88% |
|
Wait Time 16-30
Minutes |
6 |
9% |
|
Wait Time 31-45
Minutes |
2 |
3% |
|
Wait Time 46-60
Minutes |
0 |
-- |
|
Wait Time
Greater Than 1 Hour |
0 |
-- |
|
Employee Name
Given or Visible |
48 |
75% |
Source: Anonymous visits performed by TIGTA auditors.
TIGTA auditors found that improvements were made to
ensure that TAC addresses and office hours made available to taxpayers matched
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 the IRS toll-free numbers or automated
telephone messaging system to obtain this information.
In our first semiannual report, we made no
recommendations pertaining to TAC addresses and office hours because of the
IRS’ response to one of our bi-monthly reports. However, while progress was made, we continued to identify
concerns in this area and included 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 the automated telephone messaging system matched the
information posted in the TACs.
Auditors found the following.
Improvement has been made to ensure addresses and office hours made available to taxpayers match the addresses and office hours posted at the TACs
· Addresses posted at 28 (90 percent) of 31 TACs matched the addresses listed on the Internet, toll-free telephone numbers, and the automated telephone messaging system.
· Office hours for 26 (81 percent) of the 32 TACs with office hours posted on the Internet and the automated telephone messaging system matched the hours posted at the TAC.
· Office hours for 27 (84 percent) of the 32 TACs with office hours posted on the toll-free telephone numbers matched the hours posted at the TAC.
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 the automated telephone messaging system.
Improvement has been made to ensure addresses and office hours provided to taxpayers that accessed the IRS Internet web site matched the information provided by the IRS toll-free telephone numbers and the automated telephone messaging system
The following tables 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 the automated telephone messaging system.
Comparison of Accuracy of Information Provided |
||
|
|
Occurrences |
Percent |
|
Address
Correct |
32 |
100% |
|
Office
Hours Correct |
29 |
91% |
Source: Anonymous visits performed by TIGTA auditors.
|
Comparison of Accuracy of Information Provided via
Internet to the Automated Telephone Messaging System |
||
|
|
Occurrences |
Percent |
|
Address
Correct |
32 |
100% |
|
Office
Hours Correct |
30 |
94% |
Source: Anonymous visits performed by TIGTA auditors
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 32 TACs visited. Auditors asked 128 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 Years 2002 and 2003 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 an 18 additional TACs and asked
67 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
Tanya
Boone, Senior Auditor
Pamela
DeSimone, Senior Auditor
Lena
Dietles, Senior Auditor
Deborah Drain, Senior Auditor
David Hartman, Senior Auditor
Robert Howes, Senior Auditor
Edie Lemire, Senior Auditor
Grace Terranova, Senior Auditor
Robert Baker, 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, Office of 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
May and June 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 11 states visited where auditors asked questions
within the scope of services include:
Idaho, Illinois, Indiana, Kansas, Michigan, Montana, New York, Ohio,
Utah, Wisconsin, and Wyoming.
The 8 states visited where auditors asked questions
outside the scope of services include:
Illinois, Indiana, Maryland, Michigan, Montana, New York, Utah, and
Wisconsin.
Appendix V
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.