Taxpayer Experience at the Taxpayer Assistance Centers Could Be Improved

 

September 2004

 

Reference Number:  2004-40-152

 

 

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 1, 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 - Taxpayer Experience at the Taxpayer Assistance Centers Could Be Improved  (Audit # 200440032)

 

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 whether the IRS provided accurate and timely responses to taxpayers’ tax law questions during the 2004 Filing Season.  In addition, we assessed whether IRS employees were professional and courteous to 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, IRS employees adhered to operating guidelines on referral procedures, and all taxpayers were provided an opportunity to participate in the customer satisfaction survey at the TACs.

Providing quality customer service is the IRS’ first step to taxpayer compliance.  One of the IRS’ major strategies for Fiscal Year (FY) 2004 is to reduce taxpayer burden by improving the quality and efficiency of service delivery. Taxpayers have several options from which to choose when they need assistance from the IRS; these options include walk-in service at the TACs.  According to the IRS, the TACs served approximately 3.8 million taxpayers during the period January through April 2004.  Approximately 794,170 of these taxpayers visited the TACs for assistance with the tax law.

Taxpayers did not always receive accurate answers to their tax law questions when visiting the TACs.  IRS employees correctly answered 67 percent of the 250 in‑scope tax law questions auditors asked during the 2004 Filing Season.  Although this is an increase from the 51 percent accuracy rate we reported for the 2002 Filing Season, it is a decrease from the 70 percent accuracy rate reported for the 2003 Filing Season. 

IRS employees were professional and courteous in 122 (98 percent) of 125 TACs visited; however, the TACs may not provide all of the services taxpayers expect and may not be open during the hours expected. 

The IRS web site, IRS.gov, states, “IRS Taxpayer Assistance Centers are your one‑stop resource for face‑to-face tax help and solutions to tax problems, every business day.”  Because of the complexity of the tax law and the number of taxpayers the IRS serves, not all IRS employees can be trained and be experts on all tax topics and provide all tax services.  Yet the IRS has not adequately educated taxpayers on what services are offered at the TACs, creating a burden for those taxpayers that visit a TAC asking questions on tax law topics that are out of the scope of IRS employees’ training and authorization.  In fact, IRS employees provided answers to 31 (32 percent) of 98 out-of-scope questions they were not trained or authorized to answer.  This increases the risk that taxpayers will receive inaccurate answers to their questions. 

Although most addresses for the TACs visited were correct, only 43 (68 percent) of the 63 TACs visited had hours of operation that matched those posted on IRS.gov or provided through the toll-free telephone numbers.  In addition, auditors were not offered a Customer Survey Comment Card for 47 (38 percent) of 125 visits.  The IRS uses Comment Cards to obtain taxpayers’ feedback regarding the quality of customer service they receive at the TACs. 

Beginning in October 2002, the IRS instituted a Quality Assurance Program for the TACs that should help identify ways to improve the accuracy and quality of its work processes.  In addition, in FY 2004, it is revising the system to incorporate the Embedded Quality Measurement System used in other Wage and Investment Division offices and functions and will be soon piloting the use of Contact Recording, an automated quality monitoring system that captures voice elements of customer contacts and employees’ corresponding computer desktop activities, including customer account activity.  We plan to conduct a review of the system in FY 2005. 

We recommended the Commissioner, Wage and Investment Division, ensure that, as the Quality Assurance Program is being revised, ways are identified to improve work processes and the quality of the taxpayer experience when visiting the TACs.  The Commissioner should ensure IRS.gov and publications used to educate and inform taxpayers on how to obtain tax assistance from the IRS provide a clear explanation of the services offered at the TACs.  The Commissioner should also consider providing a list of tax law topics answered by TAC employees or training screeners to explain to taxpayers what tax law questions TAC employees can answer. 

Management’s Response:  IRS management agreed with two of our three recommendations and our reported outcome.  The IRS has implemented the Embedded Quality Measurement System to measure individual and organizational performance of the TACs.  This measurement system will be used to provide feedback to employees and identify trends, training needs, and other changes needed to improve work processes.  In addition, the IRS plans to determine the feasibility of implementing our recommendation to provide a clear explanation of services offered at the TACs on IRS.gov and in publications.  If feasible, the IRS will add information on services provided at the TACs to IRS.gov and Your Federal Income Tax for Individuals (Publication 17). 

The IRS does not agree with our recommendation to provide taxpayers with a list of tax law topics answered by TAC employees or training screeners to explain to taxpayers what tax law questions TAC employees can answer due to the potential perceptions that may be generated by doing so.  For example, management believes providing a list of tax law topics to customers may give the appearance that customers must determine on their own the types of services the IRS provides rather than being assisted by TAC employees.  In addition, management believes customers are unlikely to read a list containing tax law topics.

Management continues 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 is a true measure of the quality of responses provided by the IRS.  Management’s complete response to the draft report is included as Appendix VIII.

Office of Audit Comment:  We understand the IRS’ past experience has shown that taxpayers do not read signs displayed in the TACs.  However, we still believe that the IRS should pursue having greeters ask taxpayers questions to determine their specific tax law issue.  At a minimum, the greeters could determine if the tax law issue related to individual or business taxes, estate or trust taxes, etc. This action would prevent some taxpayers from having to wait before being informed that their questions cannot be answered by TAC employees.  While we still believe our recommendation is worthwhile, we do not intend to elevate our disagreement concerning it to the Department of the Treasury for resolution.

Copies of this report are also being sent to the IRS managers affected by the report recommendations.  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 Do Not Always Receive Correct Answers to Tax Law Questions

Recommendation 1:

Taxpayers Do Not Always Experience One-Stop Quality Customer Service When Visiting Taxpayer Assistance Centers

Recommendations 2 and 3:

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 – Accuracy Rates for States Visited During the 2004 Filing Season

Appendix VI – Accuracy Rates by Geographical Area January Through April 2004

Appendix VII – Accuracy Rates by Tax Law Topic January Through April 2004

Appendix VIII – Management’s Response to the Draft Report

 

Background

Providing quality customer service is the Internal Revenue Service’s (IRS) first step to taxpayer compliance.  One of the Congress’ principal objectives in enacting the 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 postfiling enforcement efforts and prefiling 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. 

The quality of service provided to taxpayers remains among the major management challenges the IRS faces in Fiscal Year (FY) 2004.  One of the IRS’ major strategies for FY 2004 is to reduce taxpayer burden by improving the quality and efficiency of service delivery.  Taxpayers have several options from which to choose when they need assistance from the IRS.  These options include walk-in service at the Taxpayer Assistance Centers (TAC), toll-free telephone assistance, and the IRS Internet site, IRS.gov. 

The complexity of the tax law has made it even more important that the IRS ensure these services are available to all taxpayers.  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 403 TACs in 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 3.8 million taxpayers during the period January through April 2004.  Approximately 794,170 of these taxpayers visited the TACs for assistance with the 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 Figure 1, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.

Because of the complexity of the tax law and the need to serve millions of taxpayers with tax law questions, TAC employees are not trained to answer all types of tax law questions.  Instead, they are trained and authorized to answer tax law questions related to specific tax topics as long as they are within their expertise and training. These are called in-scope questions; they include specific tax law topics related to lines on the U.S. Individual Income Tax Return (Form 1040), such as income, filing status, exemptions, deductions, and related credits. 

When assisting taxpayers, IRS employees must first determine if the tax law questions are in-scope. If the questions are in-scope, the employees are required to use the Publication Method Guide to provide the answers.  The Guide is a tool to guide IRS employees through the complex maze of tax laws and computations. 

When receiving out‑of‑scope questions, IRS employees are required to offer to call the appropriate IRS toll‑free telephone number on behalf of the taxpayers or to submit the questions in writing to a subject‑matter expert(s) via the IRS Internet (R‑mail).  Questions submitted via R‑mail are assigned to employees, and taxpayers are to receive responses within 15 business days.

We conducted this audit in the IRS Customer Assistance, Relationships, and Education function in the Wage and Investment (W&I) Division during the period January through May 2004.  During the period January through April 2004, Treasury Inspector General for Tax Administration (TIGTA) auditors made 125 anonymous visits asking 2 questions each at 63 TACs located in 22 states.  See Appendix V for specific states visited.  In addition, auditors completed visits to 29 TACs and asked 98 questions outside the scope of topics employees were trained to answer.  Auditors presented scenarios around specific tax topics designed to require IRS employees to ask questions, for example, to determine taxpayers’ eligibility for deductions and credits.

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 Do Not Always Receive Correct Answers to Tax Law Questions

Of the 250 in‑scope tax law questions auditors asked during the 2004 Filing Season review, IRS employees correctly answered 67 percent and incorrectly referred only 2 percent to publications.  Figure 2 shows the breakdown of the accuracy rates for this period.  See Appendix VII for results by tax law topic.  The IRS’ FY 2004 accuracy rate goal for the TACs is 80 percent.

Figure 2: Responses to Tax Law Questions (250)

 

Correctly Answered

Correctly Answered but Incomplete

Correctly Referred

Incorrectly Answered

Ref. to Pub.

Service Not Provided

Responses

148

20

18

53

4

7

Percentages

59%

8%

7%

21%

2%

3%

Source: Anonymous visits performed by TIGTA auditors.

Although this is an increase from the 51 percent accuracy rate we reported for the 2002 Filing Season, it is a decrease from the 70 percent accuracy rate reported for the 2003 Filing Season.  Figure 3 shows the comparison of the results for Filing Seasons 2002, 2003, and 2004.

 

Figure 3:  Comparison of Accuracy Rates for Filing Seasons 2002, 2003, and 2004 

 

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.

There has been a significant decrease in the Referred to Publication responses, yet TIGTA auditors have had a slight increase in the number of instances in which IRS employees did not provide service.  For 5 (71 percent) of the 7 questions for which auditors were not provided service, IRS employees did not follow existing referral procedures.  The IRS has made a business decision to close the TACs, in most cases, promptly at the advertised time, which avoids overtime costs.  If there are taxpayers that have not been served, employees are instructed to refer taxpayers to the toll-free telephone numbers.  However, auditors visited a TAC near closing time and were advised that they would have to return another day during normal business hours.  For the other two questions, the TAC was only accepting payments on the date of the auditor’s visit.

In addition, the IRS experienced minimal improvement in the number of incorrect responses.  As reported in prior reviews, incorrect answers occur mainly because the employees do not use the tools provided them and do not ask questions sufficient to answer the taxpayers’ questions correctly.

Taxpayers have a higher chance of receiving accurate answers when IRS employees follow required procedures

Accuracy rates decrease when IRS employees do not use the Publication Method Guide, available tax instructions, and publications to assist them in answering taxpayers’ questions. IRS employees used available tax instructions or publications when answering 196 (78 percent) of the 250 questions asked, with an accuracy rate of 73 percent.  In contrast, the accuracy rate was only 46 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 publications when providing assistance to our auditors.

Figure 4: Responses to Questions for Which Employee Use of Instructions, Forms, and Publications Were Documented (250)

Use of Form/
Pub


Questions Answered

Correctly Answered

Correctly Referred

Incorrectly Answered

Ref. to Pub

Service Not Provided

Used

196

73%

3%

24%

0%

0%

 Not Used

54

46%

24%

9%

7%

13%

Source:  Anonymous visits performed by TIGTA auditors.

IRS employees are required to use the Publication Method Guide or 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. 

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

IRS employees continue to assist taxpayers without asking all the probing questions outlined in the Publication Method Guide or using the tax instructions or publications. The risk that taxpayers will receive inaccurate answers is increased when IRS employees do not ask all questions to obtain relevant facts. 

·         Forty-seven (87 percent) of 54 questions for which IRS employees asked all probing questions outlined in the tax instructions and publications were correctly answered.

·         Three (11 percent) of 28 questions for which IRS employees did not ask any probing questions were correctly answered.

Each scenario was designed and presented to ensure IRS employees probe or ask specific questions to ensure they have all the necessary information to answer the questions. 

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 12 (41 percent) of 29 dependent questions, IRS employees did not ask the auditors if they had valid Social Security Numbers. For a taxpayer to claim someone as a dependent, the person must have a valid Social Security Number. 

·         For 13 (65 percent) of 20 scholarship questions, IRS employees did not ask the auditors the amounts of the scholarships received.  Scholarship money received is taxable only if the amount of the scholarship exceeds the cost of tuition, fees, and books.

When 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 22 states during the period January through April 2004 showed the following: 

·         Seventy-eight (72 percent) of 108 questions asked in Areas 3, 5, and 7 were correctly answered.

·         Forty-four (61 percent) of 72 questions asked in Areas 1 and 2 were correctly answered.

·         Four (57 percent) of 7 questions for which service was not provided occurred in Area 4, compared to 2 in Area 1 and 1 in Area 2.

See Appendices V and VI 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 and they are not provided correct responses to tax law questions. Additionally, helping taxpayers understand and meet their tax obligations is essential to voluntary compliance.  Given the complexity of the tax law, it is essential that the IRS ensure FA employees understand the significance of their role in the tax system and the importance of correctly applying the tax law. 

If the accuracy results for the 250 questions asked between January and April 2004 are indicative of the actual responses taxpayers receive when they visit a TAC, an estimated 53 taxpayers could have received incorrect responses to tax law questions.  Also, approximately 794,170 taxpayers that visited the TACs during the period January through April 2004 to ask tax law questions were at risk of receiving incorrect responses to their tax law questions. 

The IRS should ensure employees are properly trained on the tax law as well as on the importance of using all available tools and resources to answer tax law questions.  Beginning in October 2002, the FA Office instituted a Quality Assurance Program for the TACs that should help identify ways to improve the accuracy and quality of its work processes.  In addition, in FY 2004, it is revising the system to incorporate the Embedded Quality (EQ) Measurement System used in other W&I Division offices and functions and will be soon piloting the use of Contact Recording. Contact Recording is an automated quality monitoring system that captures voice elements of customer contacts and employees’ corresponding computer desktop activities, including customer account activity.  We plan to conduct a review of the system in FY 2005. 

Recommendation

The Commissioner, W&I Division, should: 

1.      Ensure that as the Quality Assurance Program is being revised management identifies ways to improve work processes and the quality of the taxpayer experience when visiting the TACs.

Management’s Response: The IRS has implemented EQ to measure individual and organizational performance of the TACs.  EQ is a standardized managerial review process that uses a common set of evaluation standards to provide feedback to employees and identify trends, training needs, and other changes needed to improve work processes.

Taxpayers Do Not Always Experience One-Stop Quality Customer Service When Visiting Taxpayer Assistance Centers

IRS employees were professional and courteous in 122 (98 percent) of 125 TACs visited.  In addition, addresses were posted on IRS.gov for all 63 TACs visited. Addresses matched those posted at the TACs for 52 (85 percent) of 61 TACs. However, the TACs may not provide all the services taxpayers expect and may not be open during the hours posted.

IRS.gov states, “IRS Taxpayer Assistance Centers are your one-stop resource for face-to-face tax help and solutions to tax problems, every business day.” Yet the IRS does not provide unlimited tax help at its TACs.  Because of the complexity of the tax law and the number of taxpayers the IRS serves, not all IRS employees can be trained and be experts on all tax topics and provide all tax services.  However, the IRS has not adequately educated taxpayers on what services are offered at the TACs, creating a burden for those taxpayers that visit a TAC asking questions on tax law topics that are out of the scope of the IRS employees’ training and authorization.  In addition, the IRS does not ensure office hours are current on its systems accessed via IRS.gov or the toll-free telephone numbers. 

Taxpayers may not be able to obtain answers to tax law questions when visiting the TACs, or employees may provide answers to questions for which they are not trained

Taxpayers may not be aware that IRS employees are not trained to answer questions on all tax topics. The IRS offers assistance through, for example, toll-free telephone numbers, walk-in services, and IRS.gov. It educates taxpayers on these services, for example, through various publications and IRS.gov.  However, IRS.gov, Your Federal Income Tax for Individuals (Publication 17), and IRS Guide to Free Tax Services (Publication 910) do not state that the TACs cannot provide answers to all tax law questions.

When taxpayers walk into a TAC, they use the Q‑MATIC system to select the type of assistance desired (e.g., return preparation, tax law question, account inquiry, payment).  In some larger TACs, IRS employees called screeners determine the reason for a taxpayer’s visit and make the Q‑MATIC system choice for the taxpayer.  Once a choice is made, the taxpayer is issued a number and waits for assistance until the number is called. 

However, taxpayers that visit a TAC may experience an unnecessary wait time for assistance only to find the employees are not trained to answer their questions.  During the filing season, in particular, taxpayers can have long wait times from the time they walk in until they reach an assistor. In 22 (18 percent) of 125 visits made during the 2004 Filing Season, auditors had wait times greater than 30 minutes. 

Regardless of whether taxpayers use the Q‑MATIC system or screeners determine the reasons for the visits, taxpayers are not usually advised that the employees assisting them in the TACs are limited to specific tax topics when answering questions.  It is usually only after taxpayers ask assistors their specific tax questions that they are informed their questions are out of the scope of the employees’ training.  At that time, IRS employees offer to call the toll-free telephone number and let the taxpayer speak with an employee trained in the tax law topic.

In some instances, employees may answer taxpayers’ questions even though they have not been trained or authorized to answer questions on the specific tax topic. During the 2004 Filing Season review, IRS employees provided answers to 31 (32 percent) of 98 out-of-scope questions they were not trained or authorized to answer.  This increases the risk that taxpayers will receive inaccurate answers to their questions. 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 (98)

 

Correctly Referred

Questions Answered

Correct

Incorrect

Ref. to

Pub.

Responses

67

12

7

12

Percentages

 68%

39%

 23%

39%

Source: Anonymous visits performed by TIGTA auditors.

The IRS does not want 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 and the risk that taxpayers will receive incorrect answers to their questions.  Employees are not expected to be experts in all aspects of tax law.  According to FA Office management, experienced employees are more likely to answer out-of-scope questions because they believe they know the correct answers and feel obligated to answer.

Taxpayers visiting the TACs may not find the offices open

Most addresses for the TACs visited matched the addresses posted on IRS.gov and through the toll-free telephone numbers.  However, only 43 (68 percent) of the 63 TACs visited had hours of operation that matched those posted on IRS.gov and provided through the toll-free telephone numbers.  The National Taxpayer Advocate has also reported to the Congress that taxpayers continue to complain that TACs were closed on the date visited. 

Taxpayers can access IRS.gov and follow links to obtain the addresses and office hours of the TACs located in their states.  Taxpayers that do not have access to the Internet may call the IRS toll-free telephone numbers or automated telephone messaging systems at the TACs to obtain this information.  The FA Office operating procedures require TAC managers to ensure TAC hours provided to taxpayers via IRS.gov and toll-free telephone numbers are accurate and timely updated. 

Auditors were not always offered Customer Survey Comment Cards

For 61 (97 percent) of 63 TACs visited during the period January through April 2004, auditors observed that Customer Survey Comment Cards were available for taxpayers. However, for 47 (38 percent) of the 125 visits, auditors were not offered a Comment Card.  The IRS developed 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 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 secure drop boxes located in the TACs.  Comment Cards are forwarded to an independent contractor the IRS hired to collect and summarize taxpayer feedback.  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.

Recommendations

The Commissioner, W&I Division, should: 

2.      Ensure IRS.gov and publications used to educate and inform taxpayers on how to obtain tax assistance from the IRS provide a clear explanation of the services offered at the TACs.

Management’s Response:  The IRS plans to determine the feasibility of implementing this recommendation.  If feasible, the IRS will add information on services provided in the TACs to IRS.gov and Publication 17.  The IRS will also include information on the web site and in Publication 17 stating the IRS will refer customers to the appropriate function for assistance with services that are outside the scope of services provided in the TACs.

3.      When taxpayers visit the TACs, consider providing them a list of tax law topics answered by TAC employees or training screeners to explain to taxpayers what tax law questions TAC employees can answer.

Management’s Response:  The IRS does not agree with this recommendation due to the potential perceptions that may be generated by providing customers a list of tax law topics answered by TAC employees.  For example, management believes providing a list of tax law topics to customers may give the appearance that customers must determine on their own the types of services the IRS provides rather than being assisted by TAC employees.  In addition, management believes customers are unlikely to read a list containing tax law topics.

Office of Audit Comment:  We understand the IRS’ past experience has shown that taxpayers do not read signs displayed in the TACs.  However, we still believe the IRS should pursue having greeters ask taxpayers questions to determine their specific tax law issue.  At a minimum, the greeters could determine if the tax law issue related to individual or business taxes, estate or trust taxes, etc. This action would prevent some taxpayers from having to wait before being informed that their questions cannot be answered by TAC employees. 

 

Appendix I

 

Detailed Objectives, Scope, and Methodology

 

The overall objective of this review was to determine whether the Internal Revenue Service (IRS) provided accurate and timely responses to taxpayers’ tax law questions during the period January through April 2004.  In addition, we assessed whether IRS employees were professional and courteous to the 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, IRS employees adhered to operating guidelines on referral procedures, and all taxpayers were provided an opportunity to participate in the customer satisfaction survey at the TACs. 

To accomplish our objectives, we:

I.                   Determined whether the IRS provided quality service and accurate responses to tax law inquiries at the 63 TACs visited during the period January through April 2004. Auditors visited nine TACs in each of the seven areas.  We judgmentally selected three large, medium, and small TACs from each of the seven areas based on the number of taxpayer visits and geographic proximity to each other to reduce travel time.  We asked 250 tax law questions that an individual taxpayer might ask.  The questions were based upon the scope of services for tax law assistance prescribed in the Fiscal Year 2004 Field Assistance (FA) Office guidelines.

II.                Determined whether IRS employees followed FA Office 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 29 additional TACs and asked 98 questions that were beyond the IRS employees’ level of training.  These TACs were also selected based on their geographical proximity to the TACs visited to ask in-scope questions.

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

IV.             Determined whether TAC addresses and office hours provided to taxpayers via the Internet, the toll-free telephone numbers, and the TACs’ automated telephone messaging systems matched information posted in the TACs.

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

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, Lead Auditor

Pamela DeSimone, Senior Auditor

Lena Dietles, Senior Auditor

Deborah Drain, Senior Auditor

Edie Lemire, Senior Auditor

Grace Terranova, Senior Auditor

Jerome Antoine, Auditor

Robert Baker, Auditor

Jean Bell, Auditor

Vacenessia Brown, Auditor

Andrea Hayes, Auditor

Kathy Henderson, Auditor

Patricia Jackson, 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  SE:W:CAR

Director, Strategy and Finance  SE:W:S

Chief, Performance Improvement, Wage and Investment Division  SE:W:S:PI

Director, Field Assistance SE:W:CAR:FA

Director, Stakeholder Partnerships, Education, and Communication  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:  Senior Operations Advisor, Wage and Investment Division  SE:W:S

 

Appendix IV

 

Outcome Measures

 

This appendix presents detailed information on the measurable impact that our recommended corrective actions 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; 53 incorrect answers to tax law questions (see page 4).

Methodology Used to Measure the Reported Benefit:

If the accuracy results for the 250 tax law questions we asked during the period January through April 2004 are indicative of the actual responses taxpayers receive when they visit a Taxpayer Assistance Center, we estimate 53 taxpayers could have received incorrect responses to tax law questions.

 

Appendix V

 

Accuracy Rates for States Visited During the 2004 Filing Season

 

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 22 states visited in which auditors asked questions within the scope of service include Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Massachusetts, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Texas, Vermont, and Virginia.

 

Appendix VI

 

Accuracy Rates by Geographical Area

January Through April 2004  

 

Area

Correctly Answered

%

Correctly Answered but Incomplete

%

Correctly Referred

%

Incorrectly Answered

%

Incorrectly Referred to
Publication

%

Service Not Provided

%

Questions Asked

1

21

58

1

3

0

-

11

31

1

3

2

6

36

2

18

50

4

11

7

19

6

17

0

-

1

3

36

3

25

69

1

3

3

8

7

19

0

-

0

-

36

4

22

61

1

3

4

11

4

11

1

3

4

11

36

5

21

58

5

14

1

3

9

25

0

-

0

-

36

6

20

59

3

9

0

-

9

26

2

6

0

-

34

7

21

58

5

14

3

8

7

19

0

-

0

 

36

Totals

148

59

20

8

18

7

 53

21

 4

2

7

3

250

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

 

Appendix VII

 

Accuracy Rates by Tax Law Topic

January Through April 2004

 

Tax Law Topics

Questions Asked

Correctly Answered

Correctly Answered but Incomplete

Correctly Referred

Incorrectly Answered

Incorrectly Referred to Publication

Service Not Provided

Adjustment to Income

1

1 (100%)

---

---

---

---

---

Adoption Credit

2

---

---

1 (50%)

1 (50%)

---

---

Alimony

20

11 (55%)

4 (20%)

---

5 (25%)

---

---

Capital Gains and Losses

15

7 (47%)

---

5 (33%)

2 (13%)

---

1 (7%)

Child Care Credit

3

2 (67%)

---

---

---

---

1 (33%)

Child Support

7

2 (29%)

5 (71%)

---

---

---

---

Child Tax Credit

21

16 (76%)

---

---

3 (14%)

1 (5%)

1 (5%)

Dependents

29

25 (86%)

---

---

4 (14%)

---

---

Earned Income Tax Credit

15

12 (80%)

1 (7%)

---

1 (7%)

---

1 (7%)

Education Credit

4

2 (50%)

---

---

2 (50%)

---

---

Elderly Care Credit

2

2 (100%)

---

---

---

---

---

Filing Status

19

11 (58%)

4 (21%)

2 (11%)

2 (11%)

---

---

Gambling

1

1 (100%)

---

---

---

---

---

Innocent Spouse

3

---

3 (100%)

---

---

---

---

Interest Income

7

2 (29%)

---

---

4 (57%)

---

1 (14%)

Itemized Deductions

22

12 (55%)

---

3 (14%)

7 (32%)

---

---

Medical Expenses

9

8 (89%)

---

---

1 (11%)

---

---

Retirement

27

15 (56%)

---

3 (11%)

6 (22%)

2 (7%)

1 (4%)

Sale of Home

8

3 (38%)

1 (13%)

2 (25%)

1 (13%)

1 (13%)

---

Scholarship

20

7 (35%)

---

1 (5%)

12 (60%)

---

---

Social Security Income

14

9 (64%)

2 (14%)

1 (7%)

1 (7%)

---

1 (7%)

Student Loan Interest

1

---

---

---

1 (100%)

---

---

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

 

Appendix VIII

 

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.