Accuracy Rates Have Increased at Taxpayer Assistance Centers, but Improvement Is Needed to Provide Taxpayers Top-Quality Customer Service

 

February 2004

 

Reference Number:  2004-40-065

 

 

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.

 

February 27, 2004

 

 

MEMORANDUM FOR COMMISSIONER, WAGE AND INVESTMENT DIVISION

 

FROM:     Gordon C. Milbourn III /s/ Gordon C. Milbourn III

                 Acting Deputy Inspector General for Audit

 

SUBJECT:     Final Audit Report - Accuracy Rates Have Increased at Taxpayer Assistance Centers, but Improvement Is Needed to Provide Taxpayers Top-Quality Customer Service  (Audit # 200340019)

 

This report presents the results of our review of the Internal Revenue Service’s (IRS) responses to taxpayers’ tax law questions.  The overall objective of this review was to determine if the IRS provided accurate and timely responses to taxpayers’ tax law questions from January through June 2003.  In addition, we assessed whether IRS employees were professional and courteous to our auditors that made anonymous visits to the Taxpayer Assistance Centers (TAC).  We also evaluated whether TAC addresses and office hours made available to taxpayers were accurate, whether IRS employees adhered to operating guidelines on referral procedures, and whether all taxpayers were provided an opportunity to participate in the customer satisfaction survey at the TACs.  Lastly, we evaluated the TAC Quality Assurance Program. 

We have issued nine bi-monthly and two semiannual reports on the results of our visits to the TACs from January 2002 through June 2003.  This report covers the period January through June 2003 but also includes a summary of the results of all auditor visits to the TACs from January 2002 through June 2003. 

We commend the IRS for the corrective actions it has taken in response to our previously issued reports.  We believe the increase in accuracy rates compared to those in the same period in Calendar Year 2002 can be directly attributed to these actions.  For example, IRS employees correctly answered 71 percent of the questions asked and incorrectly referred only 2 percent to publications from January through June 2003, compared to correctly answering only 53 percent of the questions asked and incorrectly referring 20 percent to publications from January through June 2002.  Overall, from January 2002 through June 2003, our auditors made 605 anonymous visits to 303 TACs located in 50 states and Washington, D.C.  The auditors received correct answers to 729 (60 percent) of the 1,213 questions asked.

From January through June 2003, our auditors made 206 visits to 104 TACs located in 32 states and asked 411 tax law questions that are within the scope of topics TAC employees should have been trained to answer.  The auditors received correct answers to 293 (71 percent) of the 411 questions asked.  For 10 (2 percent) of the 411 questions asked, IRS employees referred the auditors to IRS publications and generally advised the auditors to conduct their own research to find the answers to their questions.

Specific trends that, when addressed, may increase taxpayers’ chances of receiving correct answers to their questions and consistent levels of customer service include:

IRS employees also answered tax law questions they were not trained to answer.  Auditors completed visits to 85 additional TACs to determine if IRS employees referred taxpayers to the IRS toll-free telephone lines or Internet for questions out of the scope of their training.  IRS employees did not follow referral procedures for 127 (57 percent) of the 223 out of scope questions asked.

In October 2002, the IRS implemented a Quality Assurance Program to provide employees feedback on ways to improve the quality of service offered in the TACs.  Members of the Quality Assurance staff visited 252 TACs and asked 1,239 tax law questions, but the Quality Assurance Program does not have a process to provide accurate trending information.

Auditors had positive experiences when they visited the TACs.  IRS employees were professional and courteous in 203 (99 percent) of the 206 visits.  Wait time for service was 1 hour or less for 96 percent of the visits.  In addition, 74 (71 percent) of the 104 TACs visited by our auditors had office hours listed on the IRS Internet site, The Digital Daily, which matched the hours posted at the TACs.  However, the auditors were not offered a Customer Survey Comment Card for 92 (45 percent) of 206 visits.  The IRS uses Customer Survey Comment Cards to obtain taxpayer feedback regarding the quality of customer service they receive at the TACs. 

We recommended that the Commissioner, Wage and Investment Division, revise the Quality Assurance Program to include a systematic methodology to select scenarios and ensure the accuracy and sufficiency of information captured in the Quality Assurance database.

Management’s Response:  IRS management agreed with our recommendation and reported outcome and has already initiated corrective actions.  Management appreciated our recognition of the corrective actions taken on issues identified in our previous reports, but they continued to disagree with our method of reporting referrals to publications and service denied when computing the accuracy rate.  As such, they do not believe our reported accuracy rate of 71 percent is a true measure of the quality of responses provided by the IRS.

Excluding the references to publications, service denied, and referrals to other employees brings the accuracy rate to 74 percent, which management recognized is inadequate.  Management’s long-term approach to improving quality is the implementation of initiatives that improve the quality, efficiency, and delivery of service to taxpayers.  Their plans bring together four initiatives into one project known as the Embedded Quality Business Integration (EQBI).  EQBI focuses on standardized measures, employee monitoring, and enhanced feedback tools.  Management’s complete response to the draft report is included as Appendix XII.

Copies of this report are also being sent to the IRS managers who are affected by the report recommendation.  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.

 

Table of Contents

Background

Taxpayers Received Correct Answers to More Tax Law Questions When Compared to the Same Period Last Year

Taxpayers Received Answers to Tax Law Questions Employees Were Not Trained to Answer

Management Implemented a Quality Assurance Program, but Improvements Are Needed

Recommendation 1:

Improvements Were Made to Provide Accurate Taxpayer Assistance Center Office Hours and Addresses to Taxpayers

Auditors Had Positive Experiences When They Visited Taxpayer Assistance Centers

Auditors Were Not Always Offered Customer Survey Comment Cards

Appendix I – Detailed Objectives, Scope, and Methodology

Appendix II – Major Contributors to This Report

Appendix III – Report Distribution List

Appendix IV – Outcome Measures

Appendix V – States Visited From January Through June 2003

Appendix VI – Accuracy Rates by State January Through June 2002 and 2003

Appendix VII – Accuracy Rates by Geographical Area January Through June 2003

Appendix VIII – Accuracy Rates by Tax Law Topic January Through June 2003

Appendix IX – Listing of Reports Issued for January 2002 Through June 2003 Audits

Appendix X – Accuracy Rates by Month January 2002 Through June 2003

Appendix XI – Accuracy Rates January 2002 Through June 2003

Appendix XII – Management’s Response to the Draft Report

 

Background

One of the Congress’ principal objectives in enacting the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98) was to mandate that the IRS do a better job of meeting the needs of its customers.  In the RRA 98, the Congress directed the IRS to achieve a better balance between its post-filing enforcement efforts and pre-filing taxpayer assistance through education and service.  To comply with this Congressional mandate, the IRS revised its mission statement to refocus its emphasis on helping taxpayers understand and meet their tax responsibilities.

Despite this increased emphasis on customer service, the Senate Committee on Appropriations was deeply concerned about the findings in a May 2001 Treasury Inspector General for Tax Administration (TIGTA) audit report on the IRS Taxpayer Assistance Centers (TAC).  That report showed our 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 upon the results of our 2001 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 required the TIGTA to conduct visits to all of the TACs and report to the Congress on whether taxpayers are provided correct and prompt answers to their tax law questions.  Consequently, we are conducting anonymous visits to all of the TACs over a 2-year period.

TACs

One of the IRS’ FY 2003 major management challenges, as defined by the TIGTA, is to provide quality customer service to each and every taxpayer.  Taxpayers have several options from which to choose when they need assistance from the IRS.  These options include walk-in service at the TACs, toll-free telephone assistance, and the IRS Internet site called The Digital Daily.

The IRS is committed to providing top-quality service to taxpayers, as shown by the IRS Field Assistance (FA) office’s mission to minimize the burden to customers in satisfying their tax obligations by providing the right services at the right location at the right time.  The FA office has overall responsibility for the TACs, and its services are provided in 403 TACs organized into 7 geographical areas located throughout the United States.

To accomplish its mission, the FA office provides professional assistance, education, and compliance services to customers that desire face-to-face interaction.  IRS employees that work in the TACs assist customers by 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.  Operating guidelines require IRS employees to identify themselves, provide their identification number either verbally or visually to all taxpayers, and assist taxpayers in a professional and courteous manner.

According to the IRS, the TACs served approximately 5.7 million taxpayers from January through June 2003.  Approximately 1.2 million of these taxpayers visited the TACs for assistance with tax law.  Figure 1 shows the percentage of time spent by employees in the TACs on the various services detailed above.

Figure 1:  Percentage of Time Spent by IRS Employees in the TACs Assisting Taxpayers

 

Figure 1 was removed due to its size.  To see the Figure 1, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

Auditor reviews of the TACs

We have issued nine bi-monthly and two semiannual reports on the results of our visits to the TACs from January 2002 through June 2003.  This report covers the period January through June 2003 but also includes a summary of the results of all auditor visits to the TACs from January 2002 through June 2003.  (See Appendix X for year‑to-date accuracy rates by month.)  During this period, TIGTA auditors made 605 anonymous visits to 303 TACs located in 50 states and Washington, D.C.  Our auditors received correct answers to 729 (60 percent) of the 1,213 questions asked.  (See Appendix XI for the overall accuracy rate from January 2002 through June 2003.) 

From January through June 2003, auditors made 206 anonymous visits to 104 TACs located in 32 states.  (See Appendix V for specific states visited.)  During these visits, the auditors asked 411 questions related to 21 tax law topics that are within the scope of topics that TAC employees should have been trained to answer.  Our 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.

This is the third semiannual trend report on the results of our visits to the TACs.  The review was conducted in the IRS Customer Assistance, Relationships, and Education function in the Wage and Investment (W&I) Division and combines the results of our visits to the TACs from January through June 2003.  This review was conducted in accordance with Government Auditing Standards.  Detailed information on our audit objectives, scope, and methodology is presented in Appendix I.  Major contributors to the report are listed in Appendix II.

Taxpayers Received Correct Answers to More Tax Law Questions When Compared to the Same Period Last Year

IRS employees correctly answered 71 percent of the questions asked and incorrectly referred only 2 percent to publications from January through June 2003, compared to correctly answering 53 percent of the questions asked and referring 20 percent to publications from January through June 2002.  From January through June 2003, our auditors visited 104 TACs and asked 411 tax law questions. 

Figure 2 shows the breakdown of the accuracy rates for this period.

Figure 2:  Responses to Tax Law Questions (411)

 

Correct

Correct but Incomplete

Incorrect

Ref. to Pub.

Service Denied

Correct Toll-Free Referral

Responses

274

19

103

10

1

4

Percentages

67%

5%

25%

2%

0%

1%

Source: Anonymous visits performed by TIGTA auditors.

 

Figure 3 shows the comparison in accuracy rates for both periods in 2002 and 2003.

 Figure 3:  Comparison of January Through June 2002 and January Through June 2003 Semiannual Accuracy Rates

 

Figure 3 was removed due to its size.  To see Figure 3, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

 

We commend the IRS for the corrective actions it has taken in response to our previously issued reports.  We believe the increase in accuracy rates can be attributed to the corrective actions taken by the IRS in response to our previously issued bi-monthly and semiannual reports.  For example, the Referred to Publication responses significantly decreased after the IRS implemented a zero-tolerance policy.  As a result of the reduction in Referred to Publication responses, IRS employees provided responses to more questions that were correctly answered. 

Despite improvements, additional managerial oversight is needed to ensure the TACs are providing top-quality customer service to taxpayers.  For example, TIGTA auditors experienced minimal improvement in the number of incorrect responses received in comparison with those received in 2002.  Auditors received incorrect answers to 126 (27 percent) of 470 questions asked from January through June 2002 and to 103 (25 percent) of 411 questions asked during this same period in 2003.

An analysis of the responses received from January through June 2003 to our tax law questions identified the following trends.  If the IRS addresses these trends with its employees, it may increase taxpayers’ chances of receiving correct answers to their questions and ensure taxpayers receive consistent levels of customer service.  (See Appendix VIII for results by tax law topic.)

Taxpayers have a higher chance of receiving accurate answers when IRS employees follow required procedures to use tax instructions, forms, and publications to answer questions

Accuracy rates decrease when IRS employees do not use available tax instructions or publications to assist them in answering taxpayers’ questions.  IRS employees used available tax instructions or publications when answering 357 (87 percent) of the 411 questions asked.  Analysis of the responses to these questions showed the accuracy rate was 76 percent.  In contrast, the accuracy rate was only 43 percent when tax instructions or publications were not used.

Figure 4 shows the accuracy rates for tax law questions when IRS employees did and did not use tax instructions or a publication(s) when providing assistance to our auditors.

Figure 4:  Responses to Questions for Which Employee Use of Instructions, Forms, and Publications Was Documented (411)

 


Questions Answered



Correct



Incorrect

Ref. to Pub.



Service Denied

Correct Toll-Free Referral

Form/Pub. Used

357

76%

22%

1%

0%

1%

Form/Pub. Not Used

54

43%

43%

9%

2%

4%

Source:  Anonymous visits performed by TIGTA auditors.

During the fall of 2002, IRS employees were trained in and required to use the Publication Method when assisting taxpayers.  This Method requires IRS employees to obtain the appropriate publication, discuss specific information related to the topic, ask appropriate questions to obtain facts when assisting a taxpayer, and then respond to the taxpayer’s issue or question.

In compliance with the Publication Method, IRS employees are to make sure taxpayers receive an answer.  However, during seven of our visits, IRS employees referred the auditors to IRS publications and generally advised the auditors to conduct their own research to find the answers to their questions.  Auditors also documented that some employees are still choosing to assist taxpayers without using available resources or asking all required questions.

Taxpayers have a higher chance of receiving accurate answers when IRS employees ask probing questions to obtain relevant facts from the taxpayers

IRS employees did not always ask all the probing questions outlined in tax instructions or publications.  The risk that taxpayers will receive incorrect answers is increased when IRS employees do not ask all questions to obtain relevant facts. 

The accuracy rate is significantly affected when IRS employees ask questions to obtain relevant facts from taxpayers.  For example: 

·        Fifty-four (92 percent) of 59 questions for which IRS employees asked all probing questions outlined in the tax instructions and publications were correctly answered. 

·        Nine (31 percent) of 29 questions for which IRS employees did not ask any probing questions were correctly answered.

For each scenario, TIGTA auditors identified and remembered facts relating to all the potential probes that could be asked by an IRS employee.  While all the probes may not have been necessary to provide a correct answer, certain probes provide key information needed to ensure all relevant facts were obtained from the taxpayer. 

For example:

·        For 29 (60 percent) of 48 Earned Income Tax Credit (EITC) questions, IRS employees did not ask the auditors if they had valid Social Security Numbers (SSN).  To claim the EITC, the qualifying child of a taxpayer must have a valid SSN.

·         For 11 (61 percent) of 18 Scholarship questions, IRS employees did not ask the auditors the amounts of the scholarships they received.  Scholarship money received is taxable only if the amount of the scholarship exceeds the cost of tuition, fees, and books. 

By not using available resources to ask all required questions, IRS employees are making assumptions and providing answers without considering facts relevant to ensuring the answers given are correct. 

Taxpayers that visit the TACs in certain geographical locations may receive inconsistent levels of customer service

The TAC location affects overall accuracy rates.  Results from the TACs visited in 7 areas in 32 states from January through June 2003 show the following: 

·        Seventy-five (82 percent) of 92 questions asked in Area 4 were correctly answered.

·        Thirty-one (60 percent) of 52 questions asked in Area 6 were correctly answered.

·        Seven (6 percent) of 127 questions asked in Areas 5 and 6 resulted in auditors being referred to a publication, compared to none in Areas 2 and 7.

(See Appendices VI and VII for accuracy rates by state and geographical area.)

The burden on taxpayers is increased when they rely upon the IRS to help them comply with the tax law, but they are not provided correct responses to tax law questions.  If the accuracy results for the 411 questions asked between January and June 2003 are indicative of the actual responses taxpayers receive when they visit a TAC, we estimate 103 taxpayers could have received incorrect responses to tax law questions.  Also, approximately 1.2 million taxpayers that visited the TACs from January through June 2003 to ask tax law questions were at risk of receiving incorrect responses to their tax law questions.  We are not making any recommendations at this time but will monitor this during the annual filing season audits of the TACs.

Taxpayers Received Answers to Tax Law Questions Employees Were Not Trained to Answer

When providing answers to 127 (57 percent) of 223 “out of scope” questions, IRS employees did not follow referral procedures.  Out of scope questions are those that are beyond the level of training received by employees working in the TACs.  IRS guidelines require that employees that receive an out of scope question offer to call the appropriate IRS toll-free telephone line on behalf of the taxpayer or to submit the question in writing to a subject-matter expert(s) via the Internet (R-mail).  Figure 5 provides a breakdown of employees’ answers to tax law questions beyond their level of training.

Figure 5:  Responses to Out of Scope Tax Law Questions (223)

 

Correctly Referred

Questions Answered

Correct

Incorrect

Ref. to

Pub.

Responses

96

56

32

39

Percentages

 43%

25%

14%

17%

Source:  Anonymous visits performed by TIGTA auditors.

The IRS does not want the employees in the TACs to answer tax law questions beyond their skill level or for which they have not been trained.  This reduces employee assumptions or interpretation of tax law for complicated questions and reduces the risk that taxpayers will receive incorrect answers to their questions.  Employees are not expected to be experts in all aspects of tax law.  The burden on taxpayers is increased when they rely upon the IRS to help them comply with the tax law, but they are provided with incorrect answers.  We are not making any recommendations at this time but will monitor this during the annual filing season audits of the TACs.

Management Implemented a Quality Assurance Program, but Improvements Are Needed

Beginning in October 2002, the FA office instituted a Quality Assurance Program for the TACs that will help identify ways to improve the accuracy and quality of its work processes.  However, improvements could be made to the program to make it more effective.

As part of the Quality Assurance Program, the Quality Assurance staff plays the role of taxpayers and makes anonymous visits to the TACs, completing the steps a taxpayer might take if he or she decided to visit a TAC to obtain answers to a tax law question(s).  Results of these reviews are provided to each employee’s manager with specific feedback on the quality of service provided in the TACs. 

During FY 2003, the Quality Assurance staff visited 252 TACs and asked 1,239 tax law questions that were within the scope of questions IRS employees are trained to answer.  Based upon the IRS’ request that we review the Quality Assurance Program, the following limitations were identified that, if addressed, would strengthen the program.

The Quality Assurance staff developed scenarios that were too simplistic and did not adequately assess the employees’ knowledge of tax law and IRS procedures

From October 2002 through June 2003, the Quality Assurance staff asked 1,157 tax law questions (93 percent of the total for FY 2003) that the employees could easily answer (i.e., the questions did not require the employees to ask additional probing questions and for the most part could be answered with a yes or no response).  In April 2003, we advised the Quality Assurance staff that they should revise the scenarios.  They agreed, and in July 2003 the Quality Assurance staff began using scenarios that require IRS employees to ask probing questions to correctly answer the questions.  This should allow the Quality Assurance staff to better assess the employees’ knowledge of tax law and IRS procedures.

The Quality Assurance staff randomly chose scenarios and tax law topics that could inhibit trend analyses

For all 1,239 questions, the Quality Assurance staff selected questions from 24 topics designed to cover a wide range of tax law topics.  In addition, each staff member selected the question(s) each preferred when making anonymous visits to the TACs.  They did not weigh the number of questions asked per tax law topic or the specific number of times each scenario was used.  Therefore, the Quality Assurance staff could not easily or adequately use the results to identify trends or opportunities for improvement.   

The Quality Assurance Program does not have a process to provide accurate trends on the overall quality of assistance provided in the TACs

For 112 questions asked at the TACs by the Quality Assurance staff, the results were not correctly input into the Program’s database.  Results from the Quality Assurance staff visits to the TACs are documented in a Data Capturing Instrument sheet and manually input into a database that is used to calculate tax law accuracy rates and identify trends.  The Quality Assurance staff uses the data to provide feedback to TAC managers.  We selected a judgmental sample of 50 of 112 questions and compared information documented in the Data Capturing Instrument to information captured in the database.  For 6 (15 percent) of 40 sheets, information in the Data Capturing Instrument did not match that in the database.  We were unable to locate the remaining 10 Data Capturing Instruments in IRS records.

Beginning in Calendar Year 2004, we plan to limit our reviews of the TACs to the filing season.  The Quality Assurance Program will be the main source of continuous feedback to TAC employees and managers.  Without a process to balance the use of scenarios and ensure accurate and sufficient information is captured in their database, the Quality Assurance staff will be unable to effectively assess the quality of service provided to taxpayers and provide useful feedback including trends to TAC managers and employees for improving the quality of service.  

Recommendation

We recommend the Commissioner, W&I Division:

1.      Revise the Quality Assurance Program to include a systematic methodology to select scenarios and ensure the accuracy and sufficiency of information captured in the Quality Assurance database.

Management’s Response:  In October 2003, the IRS changed its methodology for selecting scenarios for Quality Assurance staff reviews.  Scenarios are now selected based upon the frequency of questions asked on a specific topic from Customer Account Services function toll-free telephone line data. 

Beginning with the February 2004 shopping reviews, a designated reviewer will check all inputs into the database for accuracy.  This will be performed monthly.  In addition, the Quality Assurance manager will conduct sample reviews of each reviewer’s Data Collection Instrument for accuracy. 

Improvements Were Made to Provide Accurate Taxpayer Assistance Center Office Hours and Addresses to Taxpayers  

Addresses were posted on the IRS Internet site, The Digital Daily, for the 104 TACs visited and matched the addresses posted at the TACs for 87 (88 percent) of 99 TACs.  In addition, office hours were posted on The Digital Daily for all 104 TACs visited and matched the office hours posted at the TACs for 74 (71 percent) of the 104 TACs. 

Taxpayers can access The Digital Daily 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 telephone numbers or automated telephone messaging system at the TACs 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, from July through December 2002, 2 percent of TAC addresses and 43 percent of TAC office hours posted at the TACs did not match those on The Digital Daily.  As a result, our second semiannual trend report included a recommendation to ensure TAC addresses and office hours made available to taxpayers are accurate.

In preparing for the 2003 Filing Season, IRS managers were required to certify that all TAC office hours and addresses were correct on The Digital Daily and on the automated telephone messaging system at the TACs.  The IRS informed us that the data available to taxpayers from its Internet site were the most reliable.  Figures 6 and 7 show the comparison of TAC addresses and office hours posted on The Digital Daily to addresses and office hours provided to taxpayers via the IRS toll-free telephone numbers and automated telephone messaging system. 

Figure 6:  Comparison of Accuracy of Information Provided
via Internet to Toll-Free

 

Occurrences

Percent

Address Correct

104

100%

Office Hours Correct

93

89%

Source:  Anonymous visits performed by TIGTA auditors.

 

Figure 7:  Comparison of Accuracy of Information Provided via Internet to the Automated Telephone Messaging System

 

Occurrences

Percent

Address Correct

66

73%

Office Hours Correct

62

69%

Source:  Anonymous visits performed by TIGTA auditors.

When TAC office hours and addresses made available to taxpayers are not accurate and timely updated, taxpayers may find it difficult to seek and obtain face-to-face contact with the IRS.  We are not making any recommendations at this time but will monitor this during the annual filing season audits of the TACs.

Auditors Had Positive Experiences When They Visited Taxpayer Assistance Centers

During our visits to the TACs from January through June 2003, IRS employees were professional and courteous, limited our wait time, and appropriately provided their names. 

·        IRS employees were professional and courteous in 203 (99 percent) of 206 visits to the TACs.

·        Wait time for service was 1 hour or less for 198 (96 percent) of our 206 visits.

·         IRS employee names were given or visible in 147 (71 percent) of our 206 visits.

Auditors Were Not Always Offered Customer Survey Comment Cards

For 95 (91 percent) of 104 TACs visited from January through June 2003, auditors observed that Customer Survey Comment Cards were available for taxpayers.  However, for 92 (45 percent) of the 206 visits, auditors were not offered a Comment Card.  The IRS developed Customer Survey Comment Cards to obtain feedback on the quality of service received at the TACs.  Each TAC should have Comment Cards available for all taxpayers that visit the TACs for assistance, and IRS employees are required to offer a Customer Survey Comment Card to every taxpayer who is provided with face-to-face service.

Taxpayers have the option to complete the Comment Card and place it in a secure drop box located in the TAC or to mail it directly to an independent contractor the IRS hired to collect and summarize taxpayer feedback.  Taxpayers that completed Customer Survey Comment Cards from January through July 2003 gave the IRS an overall customer satisfaction rate of 87 percent and dissatisfaction rate of 8 percent. 

The IRS is to be commended for obtaining high satisfaction rates; however, the contractor reported that less than 4 percent of the total number of taxpayers that visited the TACs from January and July 2003 completed a Customer Survey Comment Card.  While completing the Comment Card is voluntary, IRS employees that do not follow procedures to offer taxpayers Comment Cards limit opportunities for a broader depiction of how satisfied taxpayers are with the quality of service at the TACs.  We will continue to monitor this area during the FY 2004 Filing Season reviews of the TACs.

 

Appendix I

 

Detailed Objectives, Scope, and Methodology

 

The overall objective of this review was to determine if the Internal Revenue Service (IRS) provided accurate and timely responses to taxpayers’ tax law questions from January through June 2003.  In addition, we assessed whether IRS employees were professional and courteous to our auditors that made anonymous visits to the Taxpayer Assistance Centers (TAC).  We also evaluated whether TAC addresses and office hours made available to taxpayers were accurate, whether IRS employees adhered to operating guidelines on referral procedures, and whether all taxpayers were provided an opportunity to participate in the customer satisfaction survey at the TACs.  Finally, we evaluated the Field Assistance (FA) Quality Assurance Program. 

To achieve these objectives, we:

I.                    Determined if the IRS provided quality service and accurate responses to tax law inquiries at the 104 TACs visited from January through June 2003.  This included evaluating the results of our visits to identify trends.  We asked 411 tax law questions that an individual taxpayer might ask.  The questions were based upon the training provided to IRS employees in the TACs during the fall of 2002 and the scope of services for tax law assistance prescribed in the Fiscal Year 2002 FA Operating Procedures.

II.                 Determined if IRS employees 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 85 additional TACs and asked 223 questions that were beyond the IRS employees’ level of training.

III.               Determined the quality of service provided by the IRS employees.

IV.              Determined if accommodations in the TACs visited were suitable to provide quality customer service.

V.                 Determined if Customer Survey Comment Cards were available at the TACs and offered to taxpayers.

VI.              Evaluated the IRS FA office Quality Assurance process to improve the quality of customer service offered in the TACs.  We reviewed 1,239 questions and identified 112 for which the results were not correctly input into the Quality Assurance Program’s database.  We used a judgmental sample to randomly select 50 of 112 questions and compared information documented in the Data Capturing Instrument to information captured in the database.  We used a judgmental sample because we did not want to project the results.

 

Appendix II

 

Major Contributors to This Report

 

Michael R. Phillips, Assistant Inspector General for Audit (Wage and Investment Income Programs)

Augusta R. Cook, Director

Frank Jones, Audit Manager

Russell Martin, Audit Manager

Tanya Boone, Senior Auditor

Pamela DeSimone, Senior Auditor

Lena Dietles, Senior Auditor

Deborah Drain, Senior Auditor

Jack Forbus, 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

 

Report Distribution List

 

Commissioner  C

Office of the Commissioner – Attn:  Chief of Staff  C

Deputy Commissioner for Services and Enforcement  SE

Deputy Commissioner, Wage and Investment Division  SE:W

Director, Customer Assistance, Relationships, and Education, Wage and Investment Division  SE:W:CAR

Director, Strategy and Finance, Wage and Investment Division  SE:W:S

Director, Communications and Liaison, Small Business/Self-Employed Division  SE:S:MS:CL

Director, Field Assistance, Wage and Investment Division  SE:W:CAR:FA

Director, Stakeholder Partnerships, Education, and Communication, Wage and Investment Division  SE:W:CAR:SPEC

Chief Counsel  CC

National Taxpayer Advocate  TA

Director, Office of Legislative Affairs  CL:LA

Director, Office of Program Evaluation and Risk Analysis  RAS:O

Office of Management Controls  OS:CFO:AR:M

Audit Liaison:  

Chief, Customer Liaison, Small Business/Self-Employed Division  SE:S:COM

GAO/TIGTA Liaison, Wage and Investment Division  SE:W:S:PA

 

Appendix IV

 

Outcome Measures

 

This appendix presents detailed information on the measurable impact that our recommended corrective action will have on tax administration.  This benefit will be incorporated into our Semiannual Report to the Congress.

Type and Value of Outcome Measure:

·        Taxpayer Burden – Potential; 103 taxpayers (see pages 4 and 10).

Methodology Used to Measure the Reported Benefit:

If the accuracy results for the 411 tax law questions we asked from January and June 2003 are indicative of the actual responses taxpayers receive when they visit a Taxpayer Assistance Center, we estimate 103 taxpayers could have received incorrect responses to tax law questions.

 

Appendix V

 

States Visited From January Through 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 32 states visited in which auditors asked questions within the scope of service include Alabama, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, New Mexico, New York, Ohio, Rhode Island, South Carolina, Texas, Utah, West Virginia, Wisconsin, and Wyoming.

 

The 27 states visited in which auditors asked questions outside the scope of service include Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Hampshire, New York, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Wisconsin, and Wyoming.

 

Appendix VI

 

Accuracy Rates by State January Through June 2002

 

States Visited

Accuracy Rates

ALABAMA

50%

ARIZONA

45%

ARKANSAS

38%

CALIFORNIA

61%

DISTRICT OF COLUMBIA

33%

FLORIDA

44%

GEORGIA

46%

HAWAII

38%

ILLINOIS

72%

IOWA

100%

MARYLAND

13%

MASSACHUSETTS

28%

MINNESOTA

50%

MONTANA

44%

NEBRASKA

100%

NEVADA

75%

NEW HAMPSHIRE

83%

NEW JERSEY

44%

NEW YORK

60%

NORTH CAROLINA

46%

NORTH DAKOTA

100%

OREGON

58%

RHODE ISLAND

75%

SOUTH CAROLINA

19%

SOUTH DAKOTA

50%

WASHINGTON

64%

OVERALL

53%

Source:  Anonymous visits performed by Treasury Inspector General for Tax Administration (TIGTA) auditors.

 

Accuracy Rates by State January Through June 2003

 

States Visited

Accuracy Rates

ALABAMA

75%

ARKANSAS

50%

CALIFORNIA

75%

COLORADO

75%

CONNECTICUT

50%

DELAWARE

50%

FLORIDA

68%

GEORGIA

79%

HAWAII

50%

IDAHO

50%

IOWA

100%

ILLINOIS

79%

INDIANA

100%

KANSAS

50%

KENTUCKY

80%

MARYLAND

71%

MASSACHUSETTS

75%

MICHIGAN

100%

MISSISSIPPI

83%

MISSOURI

75%

MONTANA

63%

NEBRASKA

81%

NEW MEXICO

63%

NEW YORK

75%

OHIO

75%

RHODE ISLAND

25%

SOUTH CAROLINA

75%

TEXAS

52%

UTAH

38%

WEST VIRGINIA

75%

WISCONSIN

63%

WYOMING

75%

OVERALL

71%

Source:  Anonymous visits performed by TIGTA auditors.

 

Appendix VII

 

Accuracy Rates by Geographical Area January Through June 2003

 

Area

Correct

%

Correct but Incomplete

%

Incorrect

%

Referred to
Publication

%

Service Denied

%

Referrals

%

Questions Asked

1

37

66

0

0

17

30

1

2

0

-

1

2

56

2

19

53

6

17

9

25 

0

0

1

3

1

3

36

3

60

71

2

2

21

25

1

1

0

-

0

-

84

4

67

73

8

9

16

17

1

1

0

-

0

-

92

5

49

65

2

3

19

25

4

5

0

-

1

1

75

6

31

60

0

0

17

33

3

6

0

-

1

2

52

7

11

69

1

6

4

25

0

0

0

 

0

-

16

Totals

274

67

19

5

103

25

10

2

1

-

4

1

411

Source:  Anonymous visits performed by Treasury Inspector General for Tax Administration auditors.

 

Appendix VIII

 

Accuracy Rates by Tax Law Topic January Through June 2003

 

Tax Law Topics

Questions Asked

Correct

Correct but Incomplete

Incorrect

Referred to Publication

Service Denied

Referrals

Adoption Credit

1

---

---

---

1(100%)

---

---

Alimony

1

1 (100%)

---

---

---

---

---

Amended Return

5

1 (20%)

3 (60%)

1 (20%)

---  

---  

---

Capital Gains and Losses

24

17 (71%)

---

4 (17%)

---

---

3 (13%)

Child Care Credit

8

6 (75%)

---

1 (13%)

1 (13%)

---

---

Elderly/Disabled Credit

6

4 (67%)

---

1 (17%)

---

1 (17%)

---

Child Tax Credit

19

17 (89%)

---

2 (11%)

---

---

---

Dependents

60

40 (67%)

---  

20 (33%)

---  

---  

---

Earned Income Tax Credit

48

32 (67%)

6 (13%)

10 (21%)

---

---

---

Education Credit

16

11 (69%)

---

5 (31%)

---

---

---

Filing Status

35

32 (91%)

2 (6%)

1 (3%)

---

---

---

Gambling

4

4 (100%)

---

---

---

---

---

Interest Income

10

2 (20%)

---

8 (80%)

---

---

---

Itemized Deductions

24

12 (50%)

---

11 (46%)

---   

---

1 (4%)

Medical Expenses

10

9 (90%)

---

1 (10%)

---

---

---

Retirement

57

35 (61%)

---

19 (33%)

3 (5%)

---

---

Sale of Home

17

10 (59%)

5 (29%)

1 (6%)

1 (6%)

---

---

Scholarship

18

5 (28%)

---

12(67%)

1 (6%)

---

---

Social Security Income

40

31 (78%)

3 (8%)

4 (10%)

2 (5%)

---

---

Student Loan Interest

8

5 (63%)

---

2 (25%)

1 (13%)

---

---

Source:  Anonymous visits performed by Treasury Inspector General for Tax Administration auditors.

 

Appendix IX

 

Listing of Reports Issued for January 2002 Through June 2003 Audits

 

Management Advisory Report:  Taxpayers Continue to Receive Incorrect Answers to Some Tax Law Questions (Reference Number 2002-40-086, dated April 2002).

 

Management Advisory Report:  Taxpayers Continue to Receive Incorrect Answers to Some Tax Law Questions (Reference Number 2002-40-113, dated June 2002).

 

Management Advisory Report:  Progress Was Made to Provide Taxpayers With Correct Answers to Tax Law Questions (Reference Number 2002-40-161, dated August 2002).

 

Trends in Customer Service in the Taxpayer Assistance Centers Show Procedural and Training Causes for Inaccurate Answers to Tax Law Questions (Reference Number 2003-40-023, dated November 2002).  (Semiannual Report for January Through June 2002)

 

Taxpayers That Visited Taxpayer Assistance Centers in July and August 2002 Received Incorrect Answers to Some Tax Law Questions (Reference Number 2003-40-024, dated November 2002).

 

Taxpayers That Visited Taxpayer Assistance Centers During September and October 2002 Received More Correct Answers to Tax Law Questions Than in Prior Months (Reference Number 2003-40-040, dated December 2002).

 

Taxpayers That Visited Taxpayer Assistance Centers in November and December 2002 Received Incorrect Answers to Some Tax Law Questions (Reference Number 2003-40-072, dated March 2003).

 

Trends in Customer Service in the Taxpayer Assistance Centers Continue to Show Procedural Causes for Inaccurate Answers to Tax Law Questions (Reference Number 2003-40-158, dated August 2003).

 

Progress Was Made to Provide Taxpayers With Correct Answers to Tax Law Questions, but Improvements Are Needed to Ensure Referral Procedures Are Followed (Reference Number 2003-40-120, dated May 2003).  (Semiannual Report for July Through December 2002)

 

Taxpayer Assistance Center Employees Improved the Accuracy of Answers to Tax Law Questions but Answered Some Questions Beyond Their Level of Training (Reference Number 2003-40-157, dated July 2003).

 

Taxpayer Assistance Center Employees Continued to Improve the Accuracy of Answers to Tax Law Questions During May and June 2003 (Reference Number 2003-40-198, dated September 2003).

 

Appendix X

 

Accuracy Rates by Month
January 2002 Through June 2003

 

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.

 

Appendix XI

Accuracy Rates
January 2002 Through June 2003

 

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.

 

From January 2002 through June 2003, Treasury Inspector General for Tax Administration auditors asked 1,213 tax law questions.  The chart below shows the accuracy rates for those questions.

 

Appendix XII

 

Management’s Response to the Draft Report

 

The response was removed due to its size.  To see the response, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.