TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

 

 

Inefficiencies in Processing Operations Assistance Requests Caused Taxpayers Unnecessary Delays

 

 

 

May 18, 2007

 

Reference Number:  2007-10-068

 

 

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.

 

Phone Number   |  202-927-7037

Email Address   |  Bonnie.Heald@tigta.treas.gov

Web Site           |  http://www.tigta.gov

 

May 18, 2007

 

 

MEMORANDUM FOR NATIONAL TAXPAYER ADVOCATE
DEPUTY COMMISSIONER FOR SERVICES AND ENFORCEMENT
CHIEF, APPEALS

 

FROM:                            Michael R. Phillips /s/ Michael R. Phillips

Deputy Inspector General for Audit

 

SUBJECT:                    Final Audit Report – Inefficiencies in Processing Operations Assistance Requests Caused Taxpayers Unnecessary Delays (Audit # 200510040)

 

This report presents the results of our review of the Operations Assistance Request (hereafter referred to as OAR or Request) process.  The overall objectives of this review were to determine whether the OAR process is efficient and whether the Taxpayer Advocate Service (TAS)[1] has an effective method to track OARs.  The National Taxpayer Advocate identified the Request process as an area of concern that should be reviewed by the Treasury Inspector General for Tax Administration.

Impact on the Taxpayer

The OAR process is critical to ensure taxpayer problems are addressed correctly and timely.  However, because the process is paper intensive, the Requests were not always delivered to and from other functions (Operations) using the most expeditious method, Operations sometimes rejected the Requests instead of taking the appropriate action to assist taxpayers, and the TAS did not always send Requests to the appropriate Operations liaisons, causing further delays to reroute the Requests.  These delays are significant to taxpayers, many of whom had already experienced either a systemic delay trying to resolve problems with the Internal Revenue Service (IRS) or had a financial hardship that required an immediate response.

Synopsis

The TAS did not always deliver Requests to Operations liaisons using the most expeditious method.  We estimate approximately 39,600 (28 percent) of the 140,709 Requests closed as completed in Fiscal Year (FY) 2005 were delayed because the most expeditious method available was not used.  Likewise, Operations liaisons did not return completed Requests to the TAS using the most expeditious method available.  An estimated 36,300 Requests (26 percent) were not returned immediately to the TAS once the recommended actions had been completed.  

The TAS uses the Taxpayer Advocate Management Information System (TAMIS) to record, control, and process taxpayer cases and to analyze core tax issues, laws, policies, and internal IRS processes.  However, TAS personnel did not record milestone dates in the TAMIS properly.  We estimate approximately 90,000 (64 percent) of the 140,709 Requests had at least 1 error on the OAR milestone dates recorded on the TAMIS, including case assignment and case closure dates.  As a result, TAS management cannot rely on the System to accurately assess the Request process and identify trends.  Fully automating the Request process would dramatically improve the reliability of OAR data on the TAMIS, as well as eliminate the inefficient process of manually sending Requests to and from the TAS.

When the TAS sends Requests to Operations liaisons, it provides a Requested Completion Date.  If Operations believes the Requested Completion Date is not reasonable, the TAS is required to obtain a Negotiated Completion Date with Operations, to ensure action is taken as expeditiously and realistically as possible to resolve the taxpayers’ inquiries.  However, we found 42,731 (30 percent) of the 140,709 Requests that had not been completed by the Requested Completion Date either did not have a Negotiated Completion Date or the Request had been received by the TAS after the Negotiated Completion Date.  These Dates should be used to facilitate communication between the TAS and Operations during the OAR process.  Regular communication would ensure Requests are worked expeditiously, address any problems, and provide additional time to resolve the taxpayer’s issue, if needed.

During FY 2005, Operations rejected 20,463 Requests without addressing the TAS’ recommended actions.  Of these, 6,472 (32 percent) were rejected because they were misrouted to the wrong Operations liaison.  Generally, there was little or no information in the TAMIS history to establish why the TAS employees sent the Requests to the wrong person, such as use of an outdated liaison list.  The remaining 13,991 rejected Requests were closed for a reason other than being misrouted.  Further, 46 percent of the Requests rejected by Operations in FY 2005 were closed with the reason “Other,” which provides no useful information to TAS management.  Although the Operations Assistance Request (Form 12412) contains seven reasons why an OAR can be rejected, the Service Level Agreements signed between the National Taxpayer Advocate and Operations executives do not allow for a Request to be returned without the recommended action being addressed.  It appeared that Operations employees did not always contact the TAS to discuss the reason(s) why a Request could not be processed.  Consequently, the TAS employee had to issue a second Request to Operations to address the taxpayer’s issue, which further delays the taxpayer’s case. 

Recommendations

We recommended the National Taxpayer Advocate automate the OAR process by giving Operations personnel the capability to input data and return Requests electronically.  Until the process is fully automated, the TAS and Operations should use the most expeditious method to deliver and return Requests.  We also recommended the National Taxpayer Advocate; the Commissioners, Small Business/Self-Employed Division, Wage and Investment Division, Tax Exempt and Government Entities Division, and Large and Mid-Size Business Division; the Chief, Appeals; and the Chief, Criminal Investigation, define the Requested and Negotiated Completion Dates clearly in their respective Service Level Agreements and establish and enforce procedures requiring management to follow up on these Dates.  The National Taxpayer Advocate also should require TAS employees to document their case histories when they communicate with Operations employees.  In addition, the National Taxpayer Advocate should revise Form 12412 to allow Requests to be closed as completed or misrouted only if they are sent to the wrong Operations liaison.  Finally, the National Taxpayer Advocate should evaluate a sample of misrouted Requests to determine the reasons they had been issued to the incorrect liaison or Operating Division.

Response

IRS management agreed with all but one of our recommendations.  Although the TAS did not agree with our recommendation to automate the OAR process by allowing Operations liaisons direct access to the TAMIS, they agreed to automate the OAR process through the Desktop Integration System, which sufficiently addresses our recommendation.  The TAS will revise its procedures and negotiate revisions to the Service Level Agreements with Operations regarding the method used to deliver and return OARs, along with the use of Requested and Negotiated Completion Dates.  TAS management agreed case advocates should document their case histories when communication occurs with Operations, and the TAS will reinforce this need during their annual training.  The TAS responded that the TAMIS alerts case advocates that action is required 1 day after the due date because advocates are permitted a 5-day grace period.  We believe the grace period should be eliminated to avoid delays and move a taxpayer’s case to resolution.  Also, TAS management stated they are in the process of revising Form 12412; however, it is unclear if these revisions will fully address our recommendation.  Finally, TAS management will evaluate a sample of misrouted OARs to determine the common causes of errors.  Management’s complete response to the draft report is included as Appendix VI.

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 Nancy Nakamura, Assistant Inspector General for Audit (Headquarters Operations and Exempt Organizations Programs), at (202) 622-8500.

 

 

Table of Contents

 

Background

Results of Review

The Operations Assistance Request Process Is Inefficient, Contributes to Inaccurate Data, and Causes Unnecessary Delays to Taxpayers

Recommendations 1 and 2:

The Taxpayer Advocate Service and Operations Are Not Complying With Completion Dates

Recommendations 3 and 4:

The Taxpayer Advocate Service and Operations Are Not Complying With the Service Level Agreements When Rejecting Operations Assistance Requests

Recommendations 5 and 6:

Appendices

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 – Operations Assistance Request (OAR) (Form 12412)

Appendix VI – Management’s Response to the Draft Report

 

 

Abbreviations

 

FY

Fiscal Year

IRS

Internal Revenue Service

OAR; Request

Operations Assistance Request

TAMIS

Taxpayer Advocate Management Information System

TAS

Taxpayer Advocate Service

 

 

Background

 

The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS) that provides assistance to taxpayers whose tax problems have not been resolved through normal IRS channels.  TAS employees are authorized to perform some case-related activities to resolve taxpayer problems; however, they are restricted from taking certain actions on taxpayer accounts that exceed their delegated and statutory authorities.[2]  Consequently, the TAS must rely on assistance from employees assigned to other IRS functions.  To request assistance from an operating or functional unit (Operations), the TAS issues an Operations Assistance Request (Form 12412) specifying the actions needed to help resolve the taxpayer’s problem.

The TAS and Operations have designated certain employees as liaisons who control and monitor the Operations Assistance Request (hereafter referred to as OAR or Request) process.  The TAS sends Requests to the appropriate Operations liaison on a paper Form 12412.  Both the TAS and Operations liaisons monitor the processing of Requests on the TAS database, the Taxpayer Advocate Management Information System (TAMIS).[3]  Although Operations employees cannot input information directly into the TAMIS, Operations liaisons can view information for specific Requests using an electronic web portal.  TAS employees can query and update Requests for case activity, and TAS and Operations employees can produce summarized reports for internal and external uses. 

The TAS and each operating unit formalized the OAR process with a Service Level Agreement (Agreement).  The Agreements outline required time periods, guidance for negotiating completion dates, procedures for elevating disagreements, a requirement of assigning liaisons, and establishment of quarterly meetings. 

The OAR process is critical to ensure taxpayer problems are addressed correctly and timely.  During Fiscal Year (FY) 2005, the TAS closed 161,172 Requests related to 109,400 TAS cases, based on a November 17, 2005, extract of the TAMIS.  Because some taxpayer cases may involve more than one issue or more than one action, the TAS may need to issue more than one Request to resolve a taxpayer’s case.  In addition, the TAS may have to issue a replacement Request for a taxpayer if Operations rejects the initial one. 

Prior to passage of the IRS Restructuring and Reform Act of 1998,[4] the Problem Resolution Program assisted the taxpayers.  Although IRS employees performed case work for the Problem Resolution Office, they reported to different operating units authorized to perform specific case-related activities.[5]  After enactment of the IRS Restructuring and Reform Act of 1998, the TAS replaced the Problem Resolution Program and became an independent function within the IRS.  TAS employees report to the National Taxpayer Advocate, not the operating units.

This review was performed at the IRS National Headquarters in Washington, D.C., and the Treasury Inspector General for Tax Administration Field Office in Denver, Colorado, with discussions and information provided by the TAS, Small Business/Self-Employed Division, Tax Exempt and Government Entities Division, Wage and Investment Division, Criminal Investigation function, and Office of Appeals during the period December 2005 through September 2006.  The audit 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.

 

 

Results of Review

 

The Operations Assistance Request Process Is Inefficient, Contributes to Inaccurate Data, and Causes Unnecessary Delays to Taxpayers

During FY 2005, the TAS closed 161,172 OARs related to 109,400 TAS cases.  Of these, 140,709 (87 percent) were completed, while 20,463 (13 percent) were rejected by Operations for various reasons.  It took an average of 22 days to close the 140,709 completed Requests.  However, we identified inefficiencies in the Request process that led to processing delays and contributed to inaccurate data in the TAMIS.  Many taxpayers who request assistance from the TAS have already experienced either a systemic delay trying to resolve problems with the IRS or have a financial hardship that requires an immediate response.  Given the substantial volume of Requests, it is important that both the TAS and Operations process them effectively and efficiently, to provide relief to burdened taxpayers as quickly as possible. 

The TAS did not always deliver Requests to Operations liaisons using the most expeditious method.  We estimate approximately 39,600 (28 percent) of the 140,709 Requests were delayed because the TAS did not use the most expeditious method available.  Likewise, Operations liaisons did not return completed Requests to the TAS using the most expeditious methods available.  We estimate Operations did not immediately return 36,300 (26 percent) Requests to the TAS once the recommended actions had been completed.  

In addition, TAS personnel did not record milestone dates properly in the TAMIS for approximately 66 percent of the Requests in our random variable sample.  We estimate approximately 90,000 (64 percent) of the 140,709 Requests closed as completed in FY 2005 had at least 1 error on the OAR milestone dates recorded on the TAMIS.  As a result, TAS management cannot rely on the TAMIS to accurately assess the Request process and identify trends.

Further, it did not appear the TAS and Operations were communicating to establish the dates when Requests should be completed to address taxpayers’ issues, and a significant number of Requests were rejected by Operations.  We believe the Request process can be improved to reduce the processing delays, errors, and rejections. 

The current process for shipping OARs to and from Operations is inefficient

The TAS and Operations did not always use the most expeditious method to exchange Requests.  Currently, the TAS and Operations liaisons send Requests via facsimile, hand delivery, internal mail, priority mail, and regular mail.  Each of these methods has benefits and limitations including cost, time, and staff resources.  No single method will work for all Requests because some involve just the Request, while others involve sending original documents and/or varying quantities of supporting documents.  However, because taxpayers seek the TAS’ assistance in resolving a hardship, possibly one that had already involved IRS delays, we believe the TAS and Operations should use the most expeditious delivery methods to minimize further burden to taxpayers.

The Agreements do not specify how Requests should be shipped between the TAS and Operations liaisons.  One agreement between the TAS and the Criminal Investigation function mentions the shipping method but states only that the Request can be sent via facsimile.  In addition, written procedures in the TAS Internal Revenue Manual do not provide direction to employees for the preferred method or best practices for shipping Requests to Operations liaisons.

We selected a random variable sample of 250 completed Requests and determined 180 were sent from the TAS to Operations liaisons using the most expeditious method (fax, internal mail, hand delivery, or priority mail).  However, the TAS could have sent the remaining 70 Requests (28 percent) more expeditiously, primarily by faxing them to Operations.  When projected to the entire population, we estimate the TAS could have sent approximately 39,600 of the FY 2005 Requests, related to 37,600 taxpayers, to the Operations liaisons in a more expeditious manner.

Generally, Operations needs to return the Form 12412 to the TAS only after the Request is completed.  Occasionally, Operations must return original documents or a large quantity of documents to the TAS.  Our sample identified 60 Requests (24 percent) that could have been returned to the TAS faster if Operations had faxed them to the TAS the day the requested actions had been completed.  When projected to the entire population, we estimate approximately 36,300 Requests, affecting 34,900 taxpayers, could have been returned to the TAS more expeditiously.

The TAS closed an additional 41 Requests from our sample without a completed Request or the completed Request was not in the TAS case file.  TAS officials stated that if Form 12412 is not provided, TAS employees may verbally contact Operations or research the case to determine if Operations had completed the requested action.  This takes additional time and may cause further delays to the taxpayer, especially if the TAS must take additional steps to resolve the taxpayer’s issue after Operations completes the Request.  One Operations liaison reported that Requests are not returned to the TAS because the Agreements do not require this action.  The Agreements require only that the Operations employee assigned the case discuss findings and recommendations on the final disposition of the case with the appropriate TAS employee.[6] 

Although the TAS expressed concerns related to the regular use of priority mail because of the cost, it issued internal guidance on May 24, 2006, regarding the shipping of Requests to Operations liaisons by stating in part:

For now, TAS Liaisons will use a facts and circumstance approach to determine the speed that an OAR and its documentation needs to be transmitted based on the taxpayer’s burden to be relieved.  We find that most often, faxes are the way to go, they’re expeditious and you get a confirmation receipt.  If a taxpayer’s situation requires the OAR receive expedite processing, TAS Liaisons can use priority mail if warranted.

The use of expeditious shipping methods to deliver Requests allows TAS employees to better track when Requests are received by Operations liaisons, provides better customer service to the taxpayer, and reinforces the priority consideration that should be given to Requests.  We agree that not all Requests should be sent by priority mail, only those that require the submission of original documents or are too large to fax.  Priority mail should not be the first choice, but it should be considered after the other expeditious methods, primarily faxing, have been considered.

OAR information on the TAMIS is unreliable

The TAMIS is a database dedicated to recording, controlling, and processing taxpayer cases and is used by the TAS in the analysis of core tax issues, laws, policies, and internal IRS processes.  It is a critical source of data for the National Taxpayer Advocate’s Annual Report to Congress, for internal feedback reporting to Operations, and for recommending changes to tax legislation and internal IRS processes.  Accurate information on the TAMIS is important for both the TAS and Operations to identify trends, successes, and areas needing improvement to better serve taxpayer needs.

The TAS creates, updates, and monitors Requests on the TAMIS and has created a TAMIS web portal for IRS Operations to review this information.  With the introduction of the TAMIS web portal, Operations liaisons have the capability of accessing Request information on the TAMIS; however, the access is read only.  Only TAS personnel are authorized to input data directly to the TAMIS.

We considered six dates used in the Request process and recorded on the TAMIS to be milestones.  In our random variable sample of 250 Requests completed during FY 2005, we identified 164 (66 percent) with 1 or more of the 6 milestone dates incorrectly input to the TAMIS.  We estimate 90,000 of the 140,709 Requests on the TAMIS were unreliable for controlling and monitoring of the OAR process.  Figure 1 shows the number of errors for each of the six milestone dates in our sample.[7]

Figure 1:  OAR Dates Not Reliable on the TAMIS

 

OAR Dates on the TAMIS

Random Variable Sample of 250 Completed OARs From a Population of 140,709

Sample
Errors

Estimated Errors for Population

The TAS Sends OAR to Operating Unit

42

23,259

 

Operations Liaison Receives OAR

64

32,644

 

Operations Liaison Acknowledges OAR

50

26,904

 

Operations Liaison Assigns OAR

46

23,555

 

Operations Employee Completes OAR

64

34,136

 

The TAS Receives Completed OAR

85

47,419

 

Total

164*

90,000*

 

(*)  Columns do not total because some OARs contained more than one incorrect date on the TAMIS.

 

Source:  Our analysis of unedited TAMIS data, TAS case information, and operating unit information for a random variable sample of 250 Requests completed during FY 2005 from a population of 140,709.  See Appendix IV for details on the random variable sample estimates.

 

In addition, the TAMIS did not accurately track the dates throughout the OAR process.  The TAMIS reported an average of 21.70 calendar days to process the 140,709 Requests completed during FY 2005.  However, we estimated the average processing time for Requests completed in FY 2005 was 24.55 calendar days.  Based on our sample results, we estimated the TAMIS understated the average processing time by 2.85 calendar days.  Some actions were understated while others were overstated on the TAMIS.  Figure 2 shows the average calendar days by component for Requests completed during FY 2005.




Figure 2:  Average Calendar Days to Process
140,709 OARs Completed During FY 2005

Components of the
OAR Process

Unedited TAMIS
Average Number
of Calendar Days

Estimate From Random Variable Sample of 250 Completed OARs From a Population of 140,709

Average
Calendar Days
the TAMIS Is Understated/(Overstated)

Net Result for
Average Number
of Calendar Days

Send OAR to Operating Unit

4.95

(2.09)

*2.85

Acknowledge OAR

1.14

1.70

2.84

Assign OAR

0.62

0.00

0.62

Complete OAR Action(s)

11.85

3.06

14.91

Return OAR to the TAS

3.14

.18

3.32

Total Process

21.70

2.85

*24.55[8]

(*)  Net result for rows do not total due to calculation rounding.

Source:  Our analysis of unedited TAMIS data, TAS case information, and operating unit information for a random variable sample of 250 Requests completed during FY 2005 from a population of 140,709.

The TAS does not always send the Request to Operations on the same date it records as the “sent date” on the TAMIS.  This date is critical to the OAR process because time starts when the TAS sends a Request to Operations and ends when the TAS receives the completed Request from Operations.  We also found several incorrect dates recorded on the TAMIS, including the liaison received date, acknowledged date, date assigned, and date assistance actions were completed.  These errors occurred because Operations liaisons did not provide information consistently to the TAS employees using Document Transmittals (Form 3210) and Forms 12412.  Sometimes these documents were not returned or not associated with the TAS case file, and occasionally, documentation was incomplete.  Most of the Agreements between the TAS and Operations do not require Operations to return the completed Form 12412 to the TAS.  However, these Agreements require Operations personnel assigned the Request to communicate the resolution to the TAS employee.

The TAS also tracks the date a completed Request is received.  We determined this date is not always accurate on the TAMIS.  In 13 instances, the TAS date-stamped the completed Request with the date it was received but documented the TAMIS with a different date.  An additional 22 Requests were faxed by Operations to the TAS, but the TAS did not record the faxed date on the TAMIS.  TAS personnel told us the dates recorded in the TAMIS depended on the time of day the Request was faxed, as well as the time zones of the TAS and Operations employees.  We believe the date Operations faxed the Request to the TAS should be considered the date on which the completed Request was received. 

We also identified 43 situations in which the TAS closed Requests prematurely and documented the wrong date on the TAMIS, although Operations had not yet completed the recommended actions.  This occurred when Operations returned the Form 12412 to the TAS with an update or status of the Request; however, TAS employees mistakenly viewed this action as receipt of a completed Request.  Consequently, the Request processing time was understated when the TAS closed the Request before Operations had completed all of the necessary actions on a taxpayer’s account.  Because of these inaccuracies, the TAMIS provides management with misleading information that indicates faster processing times than taxpayers are actually experiencing.  In addition, management does not have the information necessary to identify problems and implement actions to reduce taxpayers’ delays. 

The OAR process should be fully automated

The OAR process begins when the TAS liaison issues a Request to an Operations liaison using a hardcopy Form 12412 along with Form 3210.  The Operations liaison returns the Form 3210 to the TAS with the date on which the Request was received and identifies the Operations employee assigned to the Request.  Once the Operations employee completes the necessary actions on a taxpayer’s account, the Operations liaison returns the completed Form 12412 to the TAS liaison, with the closed date and a description of the actions taken.  The TAS is required to update the TAMIS once this information is received.

Since Operations liaisons have “read-only” access to Request information through the TAMIS web portal, they cannot directly update the Requests on the TAMIS.  TAS employees must manually document all dates and actions on the TAMIS.  One Operations liaison told us the TAMIS web portal is not useful because the TAS does not update it timely and it cannot be used to track and manage the inventory of Requests.  As a result, many Operations liaisons either do not obtain access to the TAMIS web portal or do not use it regularly.  In many instances, Operations liaisons developed their own spreadsheets to manage their inventory of Requests. 

Fully automating the OAR process would dramatically improve the reliability of data on the TAMIS as well as the inefficient process of sending and returning Requests to and from the TAS.  A fully automated system would allow Operations liaisons the capability to update the System directly, which would virtually eliminate the unreliable data we identified on the TAMIS.  By sending and receiving Requests electronically, the System would accurately record milestone dates in the OAR process.  A fully automated System also would document the date Requests are read (acknowledged received) by the Operations liaisons, similar to how email can be used to determine when messages are received and read.  In addition, if Operations liaisons are given the ability to input data to the TAMIS, they can instantly update a Request with the individual assigned to address the recommended actions as well as the actions taken.  Further, the System would automatically input the dates those actions occurred.  Therefore, a fully automated TAMIS would substantially reduce human errors, timing differences, and insufficient documentation provided by Operations that cause Request data to be unreliable.

Although the TAS and Operations can improve the efficiency of the OAR process by delivering and returning Requests using the most expeditious method available (fax, hand delivery, internal mail, and priority mail), automation will make the process even more efficient and reliable and will significantly reduce or eliminate the time needed to deliver Requests between the TAS and Operations.  This will allow the IRS to reduce the number of unnecessary delays when responding to taxpayers, many of whom have already experienced IRS delays or financial hardships.

Recommendations

Recommendation 1:  The National Taxpayer Advocate should request that the TAMIS be reprogrammed to allow Operations liaisons the ability to directly input the information they are currently required to provide to the TAS in hardcopy, including the return of completed Requests.  In addition, the Operations liaisons should use the TAMIS web portal for the receipt of Requests being issued by the TAS. 

Management’s Response:  IRS management did not agree with our recommendation to automate the OAR process to allow Operations liaisons direct access to the TAMIS.  The TAS stated taxpayer information is confidential, and allowing Operations liaisons access to the TAMIS would require special, complex programming.  However, the TAS plans to develop an electronic OAR which Operations employees will be able to access through the new Desktop Integration System.   

Office of Audit Comment:  We believe the TAS’ plan to develop an electronic OAR accessible through the Desktop Integration System sufficiently addresses our recommendation. 

Recommendation 2:  Until the OAR process is fully automated, the TAS and Operations should reinforce the use of faxing or other expeditious methods to deliver and return Requests and clarify expectations for the return of completed Forms 12412 to the TAS.

Management’s Response:  IRS management agreed with the recommendation and will revise their procedures and negotiate revisions to the Service Level Agreements with Operations regarding the method used to deliver and return OARs.  Also, Small Business/Self-Employed Division management will reinforce the use of fax or other expeditious methods to deliver/return Form 12412 requests and clarify expectations.

The Taxpayer Advocate Service and Operations Are Not Complying With Completion Dates

When the TAS issues a Request, it specifies a date it anticipates the Request will be completed; this is called the Requested Completion Date.  The Agreements require TAS personnel to contact the Operations employee assigned the Request to discuss the Requested Completion Date.  If the TAS agrees that a Requested Completion Date is unreasonable, it is required to obtain a Negotiated Completion Date (usually later) with Operations. 

Our analysis of the TAMIS showed that Operations did not address the taxpayer’s issue and returned the completed Request to the TAS by the Requested Completion Date in 57,602 (41 percent) of the 140,709 Requests closed in FY 2005.  It appears the TAS is not always working with Operations to negotiate when a Request will be completed.  We determined 42,731 (74 percent) of the 57,602 Requests either did not document that a Negotiated Completion Date was secured or the Request was received by the TAS after the Negotiated Completion Date.  These 42,731 Requests were related to 37,212 taxpayers.

From our random variable sample of 250 completed Requests, we determined 116 required a Negotiated Completion Date because the TAS received the Request either after the Requested Completion Date or after the Negotiated Completion Date had expired, per the TAMIS.  Figure 3 shows the results of our analysis of these 116 Requests.

Figure 3:  OARs Requiring a Negotiated Completion Date

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 determined only 14 percent of the Requests that required a Negotiated Completion Date actually had one, were received by the due date, and had documentation supporting the negotiations with Operations.  The remaining 86 percent of the Requests either did not have a Negotiated Completion Date, were received after the due date, or did not have documentation that the TAS had discussed the Negotiated Completion Date with Operations.  Specifically:

The TAS did not agree with some of the Requests we identified as untimely because they were received within 5 workdays of the due dates.  The TAS Internal Revenue Manual requires that subsequent actions be taken within 5 workdays from a “follow-up date” notated on the TAMIS.  We believe a Requested Completion Date or Negotiated Completion Date is not a “follow-up date” but rather a date when the TAS expects the Request to be completed and received.  Further, the National Taxpayer Advocate disagreed with a previous Treasury Inspector General for Tax Administration recommendation to eliminate the 5-workday grace period allowed on follow-up dates.[9]  We continue to believe this provision of the Internal Revenue Manual is not prudent because it does not emphasize the urgency needed to resolve taxpayer issues.

One Operations employee explained he or she does not arrange for Negotiated Completion Dates with the TAS.  Others stated a Negotiated Completion Date was not applicable because they completed the recommended action on the Request prior to the Requested Completion Date.  Although Operations may have completed the recommended action prior to the Requested Completion Date, for the exceptions we identified Operations did not communicate the resolution with the TAS employee prior to that date.  These dates should be used to facilitate communication between the TAS and Operations during the OAR process.  Regular communication would ensure Requests are worked expeditiously, address any problems, and provide additional time to resolve the taxpayer’s issue, if needed. 

The purpose of a Negotiated Completion Date is to set a viable date because the Requested or previous Negotiated Completion Date cannot be met.  TAS employees should document their case histories to support why a Requested Completion Date or Negotiated Completion Date was not met, how much more time is necessary, and the actions remaining.  Without this information, the TAS may not identify OAR processing issues or delays with Operations that would allow the TAS to take corrective actions to better serve taxpayer needs.

Recommendations

Recommendation 3:  The National Taxpayer Advocate; the Commissioners, Small Business/Self-Employed Division, Wage and Investment Division, Tax Exempt and Government Entities Division, and Large and Mid-Size Business Division; the Chief, Appeals; and the Chief, Criminal Investigation, should define clearly the Requested and Negotiated Completion Dates.

Management’s Response:  IRS management agreed with the recommendation and will revise their procedures and negotiate revisions to the Service Level Agreements with Operations regarding the use of Requested and Negotiated Completion Dates.  Also, Small Business/Self-Employed Division management will publish an article in their Technical Digest to reinforce the need to communicate with the TAS on setting agreed-upon completion dates and the need to close cases within the agreed-upon timeframes.

Recommendation 4:  The National Taxpayer Advocate should require TAS personnel to document their case histories when communication between the TAS and Operations occurs, including instances when a Negotiated Completion Date is discussed.  Also, the TAS should revise and enforce procedures requiring follow-up to Requested and Negotiated Completion Dates prior to their expiration.  This would include reprogramming the TAMIS so the systemic follow-up occurs on or before the Requested and/or Negotiated Completion Date.

Management’s Response:  IRS management agreed that case advocates should document their case histories when communication occurs between the TAS and Operations.  The TAS will reinforce the need for better documentation as part of the annual training for case advocates.  When a Requested Completion Date or Negotiated Completion Date is input on an OAR screen, the TAMIS automatically establishes a follow-up date 1 day after the newly established date.  The National Taxpayer Advocate stated that case advocates face extreme difficulty in meeting timeliness goals in the face of rapidly increasing caseloads and decreasing staff.  Generally, case advocates are given a 5-day grace period to follow-up on an action item.  This grace period is necessary because unlike other IRS units, the TAS cannot simply shelve cases when inventories become too big.  However, the TAS is considering revising its policy of permitting the 5-day grace period because of the role that OARs play in moving cases along. 

Office of Audit Comment:  We believe case advocates should take action by the Requested Completion Date or the Negotiated Completion date to avoid delays and move the taxpayer’s case to resolution.  We believe the National Taxpayer Advocate should follow through with its reconsideration of the policy, and eliminate the 5-day grace period allowed on follow-up dates because this grace period undermines the importance of meeting follow-up dates and the sense of urgency inherent to the TAS.  We understand that case advocates may not always meet the follow-up dates and in those instances they should document the cases with an explanation.

The Taxpayer Advocate Service and Operations Are Not Complying With the Service Level Agreements When Rejecting Operations Assistance Requests

A rejected Request occurs when Operations returns it to the TAS without addressing the recommended action.  However, the Agreements do not allow Requests to be returned to the TAS as rejects but instead require that Operations contact the Local Taxpayer Advocate or the TAS liaison.  This includes Requests that are sent to the wrong Operations liaison (misrouted) for all but one of the Agreements.  A misrouted Request cannot be completed because the Operations liaison does not have the authority and/or expertise and the Request needs to be handled by another office.  Although the Agreements do not allow for Requests to be rejected, with the exception of one Agreement, the Form 12412 includes the following options to reject a Request:

If a Request is rejected, the TAS generally must prepare a new one and repeat the process.  This delays the resolution of the taxpayer’s issue(s), potentially causing burden to the taxpayer by extending the time to respond to his or her needs.  During FY 2005, 20,463 (13 percent) of the 161,172 closed Requests were closed on the TAMIS as rejects.  Figure 4 presents the reasons why Requests were rejected in FY 2005.

Figure 4:  OARs Rejected During FY 2005

 

 

Reason OARs Were Rejected

Number of OARs

Percentage of
Total

 

Other

9,466

46.3%

 

Routed to the wrong OAR operations liaison (misrouted)

6,472

31.6%

 

The operating unit disagrees with TAS’ recommended actions

1,997

9.8%

 

Supporting documentation was not attached

1,069

5.2%

 

OARs closed with multiple reasons[10]

920

4.5%

 

The TAS has the authority to complete the requested action(s)

322

1.6%

 

The Form 12412 is incomplete

174

.8%

 

The action requested by the TAS is unclear

43

.2%

 

Total OARs Rejected

20,463

100%

 

Source:  TAMIS data for Requests rejected during FY 2005.

 

We selected a random variable sample of 100 Requests rejected by Operations during FY 2005 to determine the reason they could not be processed.  Based on our analysis, we believe rejected Requests may be significantly reduced with better communication between the TAS and Operations.  In addition, the majority of misrouted Requests occurred because the TAS mistakenly sent them to the wrong Operations liaison.  Most of the misrouted Requests can be eliminated if the TAS uses the tools it already has available.  This would allow the IRS to further reduce the number of unnecessary delays passed on to the taxpayers.  The TAS independently reviewed the cases in our sample and concluded a significant number of misrouted Requests could have been avoided with Internal Revenue Manual, web, or Integrated Data Retrieval System research.[11] 

The OAR recommended action should be addressed by Operations unless the Request was misrouted

During FY 2005, 13,991 (68 percent) of the 20,463 rejected Requests were closed for reasons other than being misrouted.  These 13,991 Requests involved a total of 11,763 taxpayers.[12]  Further, 46 percent of the Requests rejected by Operations in FY 2005 were closed with the reason “Other,” which provides no useful information to TAS management.  When Operations returns a Request to the TAS without addressing the recommended action, it wastes IRS resources, causes delays in resolving the taxpayer’s issue, and is in violation of the Agreement.  As stated earlier, the Agreements require Operations to contact the TAS when a Request involves one of the reject reasons instead of returning the Request unworked.

It appeared that Operations employees did not always contact the TAS to discuss the reasons a Request could not be processed.  Consequently, the TAS employee has to issue a second Request to Operations to address the taxpayer’s issue.  With improved communication between the TAS and Operations, there would be fewer rejected Requests.  It appeared that many of the reasons for rejecting Requests could have been resolved over the telephone.  For example, Operations could verbally request that the TAS send missing documentation, clarify requests, or provide missing information.  In addition, even if the TAS has the authority to complete the requested actions, we believe Operations should still process the Request so the taxpayer is not further burdened because of an IRS procedural error.  Operations can work internally to address this issue with the TAS during their mandatory quarterly meetings.

The TAS did not send the majority of the misrouted OARs to the proper liaison

In our sample of 100 Requests rejected by Operations, 35 (35 percent) of 100 were misrouted, per the TAMIS.  Further, 27 (77 percent) of the 35 misrouted Requests occurred because the TAS employee sent the Request to the wrong Operations liaison.  We estimate 5,800 of the 20,463 Requests rejected (affecting approximately 5,000 taxpayers) were misrouted by TAS employees even though they had the necessary tools to determine where the Requests should have been sent.  The results of our sample are consistent with a recent study by the Wage and Investment Division that recommended TAS employees be informed of the resources available and use those resources to determine where Requests should be routed.  While it is possible misroutes could occur because of insufficient resources or inadequate guidance provided by Operations (such as the current list of liaisons), we did not identify any Requests that were misrouted for these reasons.

Several factors contributed to TAS employees misrouting Requests.  TAS employees who issue Requests must identify the appropriate liaison, which can be a complicated process.  TAS employees must consider the taxpayer’s issue, if the taxpayer’s account is currently assigned to an Operations employee, and the taxpayer’s location.  To facilitate the proper assignment of Requests to the correct liaison, the TAS provides several tools to its employees on its web site including a link to the Campus Locator Guide, which shows what issues are worked at which campuses.[13]  The TAS web site also contains an OAR routing guide that is issue specific and provides an explanation of the Request requirements and/or special instructions for each of the applicable campuses.  In addition, the current Agreements for each of the six operating divisions and their addendums (as provided by Operations) provide the liaison lists.

Although there appears to be adequate guidance available to TAS employees on the TAS web site, we were unable to ascertain why the majority of TAS-caused misroutes occurred.  TAS management believes Operations does not always provide them with an updated list of liaisons that are responsible for processing the Requests.  We could neither confirm nor refute the TAS’ claim that Operations failed to provide them with timely and updated information.  Generally, there was little or no information in the TAMIS history to establish why the TAS employees sent the Requests to the wrong person, such as an outdated liaison list.  Because the OAR process is paper driven, misrouted Requests cause delays to the taxpayer. 

Recommendations

Recommendation 5:  The National Taxpayer Advocate should revise Form 12412 to allow Requests to be closed as completed or as misrouted only if they had been sent to the wrong Operations liaison.

Management’s Response:  IRS management agreed with the recommendation that the Form 12412 should be revised and will revise the Form with two sections to indicate actions taken on the OAR, “Action Taken” and “Returned with No Action Taken.”

Office of Audit Comment:  Although IRS management has committed to revising the Form 12412, it is unclear whether the revisions will completely address our recommendation.  By allowing Operations liaisons to return an OAR to the TAS with no action taken, the resolution of taxpayer cases may continue to be delayed.  If the instructions for completing the “Action Taken” section clarify that it is not acceptable to return the OAR without taking the requested action unless the OAR was misrouted to the wrong liaison, this would sufficiently address our recommendation.

Recommendation 6:  The National Taxpayer Advocate should evaluate a sample of misrouted Requests to determine the reasons the Requests were issued to the incorrect liaison or operating division.  TAS management should then take appropriate action to reduce the number of misrouted Requests in the future.

Management’s Response:  IRS management agreed with the recommendation and stated they are currently in the process of evaluating a sample of misrouted OARs.  Also, they are developing an intranet tool to assist TAS employees with determining where an OAR should be sent.

 

Appendix I

 

Detailed Objectives, Scope, and Methodology

 

The overall objectives of this review were to determine whether the OAR process is efficient and whether the TAS has an effective method to track OARs.  The scope of our review included Requests that were closed on the TAMIS in FY 2005.  To achieve the objectives, we:

I.          Determined whether TAS or Operations personnel were causing delays when processing Requests.

A.        Obtained an extract of Requests closed in FY 2005 from the TAMIS.  We validated the reliability of the computer extract by comparing population totals to information obtained from TAS officials and reviewed selected fields for accuracy.

B.        Selected a random variable sample of 250 Requests closed as completed and secured applicable Request documents.

C.        Reviewed the sampled Requests to determine whether Agreement requirements were being met.

D.        Evaluated the management controls over the OAR process by reviewing the TAMIS web portal and audit trail for FY 2005.

II.        Determined whether the TAS and Operations were using the Negotiated Completion Date when processing Requests.

III.       Determined why a substantial number of Requests are being rejected.

A.        From the extract of Requests closed in FY 2005 from the TAMIS, selected a random variable sample of 100 Requests closed as rejects.

B.        Reviewed the sampled Requests to determine whether there were opportunities to decrease the number being rejected.

IV.       Determined whether Request information on the TAMIS is reliable by using the 250 sampled Requests that were closed on the TAMIS as completed. 

A.        Compared the Request data input to the TAMIS against information provided by Operations and TAS case files.

B.        Evaluated management controls over the OAR process by reviewing the accuracy of six milestone dates in the process.   

Sampling Plan

We consulted with a statistician to design our sampling methodology and to ensure our results were projected accurately.  We selected a random variable sample of 250 Requests closed in FY 2005 (from the TAMIS database) by using a standard deviation for each stratum based on the number of estimated days delayed.  A random variable sample was selected to allow us the opportunity to project time, if applicable.  The following table shows the sampling methodology.

Sampling Methodology

STRATA

TOTAL DAYS OPEN

# OF REQUESTS

ESTIMATED STANDARD DEVIATION

# OF REQUESTS
× STANDARD DEVIATION

SAMPLE SIZE

STRATUM 1

30 OR FEWER

113,374

7.5

850,305

161

STRATUM 2

31 TO 60

18,891

13.0

245,583

46

STRATUM 3

61 TO 90

4,685

22.5

105,413

20

STRATUM 4

91 TO 180

2,870

27.0

77,490

15

STRATUM 5

181 AND ABOVE

889

50.0

44,450

8

TOTALS

 

140,709

 

1,323,241

250

 

We took a second random variable sample of Requests from the rejected/returned population of Requests closed in FY 2005 (from the TAMIS database) using the following parameters:  a confidence level of 90 percent, an expected error rate of 10 percent, and a sampling precision of +5 percent.  Based on these parameters, our sample size was 100 rejected/returned Requests.  A random variable sample was selected to allow us the opportunity to project time, if applicable.  The following table shows the sampling methodology.

Sampling Methodology for Rejected Requests

STRATA

TOTAL DAYS OPEN

# OF REEQUESTS

ESTIMATED STANDARD DEVIATION

# OF REQUESTS
× STANDARD DEVIATION

SAMPLE SIZE

STRATUM 1

21 OR FEWER

16,238

7.5

121,785

62

STRATUM 2

22 TO 45

3,076

13.0

39,988

20

STRATUM 3

46 AND ABOVE

1,149

30.0

34,470

18

TOTALS

 

20,463

 

196,243

100

 

Appendix II

 

Major Contributors to This Report

 

Nancy A. Nakamura, Assistant Inspector General for Audit (Headquarters Operations and Exempt Organizations Programs)

Daniel R. Devlin, Assistant Inspector General for Audit (Small Business and Corporate Programs)

Michael E. McKenney, Assistant Inspector General for Audit (Wage and Investment Income Programs)

Carl L. Aley, Director

Janice M. Pryor, Audit Manager

Joseph P. Smith, Lead Auditor

Aaron R. Foote, Senior Auditor

Stephanie K. Foster, Senior Auditor

Mary F. Herberger, Senior Auditor

Daniel M. Quinn, Senior Auditor

David P. Robben, Senior Auditor

 

Appendix III

 

Report Distribution List

 

Commissioner  C

Office of the Commissioner – Attn:  Chief of Staff  C

Commissioner, Large and Mid-Size Business Division  SE:LM

Commissioner, Small Business/Self-Employed Division  SE:S

Commissioner, Tax Exempt and Government Entities Division  SE:T

Commissioner, Wage and Investment Division  S:W

Chief, Criminal Investigations  SE:CI

Chief Counsel  CC

Deputy National Taxpayer Advocate  TA

Director, Office of Legislative Affairs  CL:LA

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

Office of Internal Control  OS:CFO:CPIC:IC

Audit Liaisons:

Commissioner, Large and Mid-Size Business Division  SE:LM:CL

Commissioner, Small Business/Self-Employed Division  SE:COM

Commissioner, Tax Exempt and Government Entities Division  SE:T:CL

Commissioner, Wage and Investment Division  SE:W:S:W

National Taxpayer Advocate  TA

Chief, Appeals  AP:TP:SS

Chief, Criminal Investigation  SE:CI:S:PS

 

Appendix IV

 

Outcome Measures

 

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

Type and Value of Outcome Measure:

Methodology Used to Measure the Reported Benefit:

The TAS closed a total of 140,709 Requests as completed in FY 2005.  We selected a random variable sample of 250 Requests closed in FY 2005.  One or more of the 6 milestone dates reviewed were incorrectly documented on the TAMIS in 164 of the 250 Requests sampled.  Based on the sample, we estimate there were a total of 90,000 Requests with unreliable data on the TAMIS (our estimate is based on a 90 percent confidence level and a precision level of +5.33 percent).  See Figure 1 in the report for the number of errors identified in our sample and the projected number of errors over the population for the six milestone dates.  Our statistician confirmed the computed weighted averages used for each milestone date delayed to determine the number of Requests affected.

Type and Value of Outcome Measure:

Methodology Used to Measure the Reported Benefit:

The TAS closed a total of 140,709 Requests as completed in FY 2005.  From our random variable sample of 250 Requests closed in FY 2005, we found that 70 could have been sent by the TAS and received by Operations liaisons faster.  We estimate 39,600 (28 percent) Requests were delayed because of the delivery method used by the TAS when delivering the Requests to the Operations liaisons (based on a 90 percent confidence level and a precision level of +4.97 percent).  Because some taxpayers required more than 1 Request to resolve their accounts (the 140,709 Requests were associated with 102,604 taxpayers), we further estimate the 39,600 delayed Requests potentially adversely affected approximately 37,600 taxpayers.  See Appendix I for our overall sampling methodology.  Using a binomial probability distribution, Table 1 provides the computations of taxpayers affected by how Requests were delivered to Operations. 

Table 1:  Detailed Computation of Taxpayers Affected by the Method Through Which OARs Were Sent to Operations During FY 2005

 

 

Number of OARs Issued per Taxpayer

Count of Taxpayers With X Number of OARs

Estimated Number of Taxpayers Affected by the OAR Delivery Method * 

 

1 OAR

71,216

20,026

 

2 OARs

19,874

9,606

 

3 OARs

6,722

4,226

 

4 OARs

2,698

1,978

 

5 OARs

1,041

841

 

6 OARs

526

453

 

7 OARs

257

232

 

8 OARs

119

111

 

9 OARs

53

50

 

10 OARs

39

38

 

11 OARs

26

25

 

12 OARs

14

14

 

13 OARs

7

7

 

14 OARs

4

4

 

15 OARs

5

5

 

16 OARs

1

1

 

17 OARs

1

1

 

26 OARs

1

1

 

Total Taxpayers

102,604

37,619

 

Source:  TAMIS data for Requests completed during FY 2005.  *Based on a binomial probability distribution formula as follows:  Number of taxpayers multiplied by the sum of 1 minus the inverse of the error rate to the power of the number of Requests associated with those taxpayers.

 

Type and Value of Outcome Measure:

Methodology Used to Measure the Reported Benefit:

The TAS closed a total of 140,709 Requests as completed in FY 2005.  From our random variable sample of 250 Requests closed in FY 2005, we found that 60 could have been returned to the TAS more expeditiously and timely.  We estimate 36,300 (26 percent) Requests were delayed because of the delivery method used by Operations when returning completed Requests to the TAS (based on a 90 percent confidence level and a precision level of +4.88 percent).  Because some taxpayers required more than 1 Request to resolve their accounts (the 140,709 Requests were associated with 102,604 taxpayers), we further estimate the 36,300 delayed Requests potentially adversely affected approximately 34,900 taxpayers.  See Appendix I for our overall sampling methodology.  Using a binomial probability distribution, Table 2 provides the computations of taxpayers affected due to the delivery method used by Operations or because the delivery was not timely.

 

Table 2:  Detailed Computation of Taxpayers Affected by the Method Through Which OARs Were Returned to the TAS During FY 2005

 

 

Number of OARs Issued per Taxpayer

Count of Taxpayers With X Number of OARs

Estimated Number of Taxpayers Affected by the OAR Return Delivery Method* 

 

1 OAR

71,216

18,388

 

2 OARs

19,874

8,938

 

3 OARs

6,722

3,978

 

4 OARs

2,698

1,881

 

5 OARs

1,041

807

 

6 OARs

526

438

 

7 OARs

257

225

 

8 OARs

119

108

 

9 OARs

53

49

 

10 OARs

39

37

 

11 OARs

26

25

 

12 OARs

14

14

 

13 OARs

7

7

 

14 OARs

4

4

 

15 OARs

5

5

 

16 OARs

1

1

 

17 OARs

1

1

 

26 OARs

1

1

 

Total Taxpayers

102,604

34,907

 

Source:  TAMIS data for Requests completed during FY 2005.  *Based on a binomial probability distribution formula as follows:  Number of taxpayers multiplied by the sum of 1 minus the inverse of the error rate to the power of the number of Requests associated with those taxpayers.

 

Type and Value of Outcome Measure:

Methodology Used to Measure the Reported Benefit:

The TAS closed a total of 140,709 Requests as completed in FY 2005.  These 140,709 Requests were associated with 102,604 taxpayers (a TAS taxpayer may require more than 1 Request to resolve his or her account).  Based on the TAMIS, 57,602 of the 140,709 Requests were not returned to the TAS by the Requested Completion Date.  Further analysis of these Requests showed that 42,731 potentially affected 37,212 taxpayers because a Negotiated Completion Date was not documented or the Request was returned to the TAS after a Negotiated Completion Date.

Type and Value of Outcome Measure:

Methodology Used to Measure the Reported Benefit:

The TAS closed 20,463 Requests because they were rejected by Operations in FY 2005.  Based on the TAMIS, 13,991 of these Requests were rejected for a reason other than being misrouted.  These 20,463 Requests were associated with 15,965 taxpayers (a TAS taxpayer may require more than 1 Request to resolve his or her account).  Further, the 13,991 Requests were associated with 11,763 taxpayers and potentially adversely affected those taxpayers because the recommended actions on the Requests were not addressed by Operations.

Type and Value of Outcome Measure:

Methodology Used to Measure the Reported Benefit:

The TAS closed 20,463 Requests as rejects in FY 2005.  We selected a random variable sample of 100 Requests from those rejected in FY 2005.  Thirty-five of the 100 sampled Requests were rejected because they were misrouted to the wrong Operations liaisons.  Twenty-seven of the 35 were caused by TAS employees; we estimate 5,846 misrouted Requests were caused by TAS employees (based on a 90 percent confidence level and a precision level of +8.07 percent).  Based on the TAMIS, 6,472 of the 20,463 rejected Requests, affecting 5,454 taxpayers, were closed because they were misrouted.  We estimate the error rate of misrouted Requests caused by the TAS in FY 2005 was 90.3 percent (5,846/6,472).  We further estimate the 5,846 misrouted Requests caused by the TAS potentially adversely affected approximately 5,000 taxpayers.  See Appendix I for our overall sampling methodology.  Using a binomial probability distribution, Table 3 provides the computations of taxpayers affected because their misrouted Requests were caused by the TAS.

Table 3:  Detailed Computation of Taxpayers Affected by OARs Being Misrouted During FY 2005

 

 

Number of OARs Issued per Taxpayer

Count of Taxpayers With X Number of OARs

Estimated Number of Taxpayers Affected by OARs Being Misrouted* 

 

1 OAR

4,642

4,192

 

2 OARs

661

655

 

3 OARs

116

116

 

4 OARs

23

23

 

5 OARs

8

8

 

6 OARs

3

3

 

8 OARs

1

1

 

Total Taxpayers

5,454

4,998

 

Source:  TAMIS data for Requests closed as being misrouted only during FY 2005.  *Based on a binomial probability distribution formula as follows:  Number of taxpayers multiplied by the sum of 1 minus the inverse of the error rate to the power of the number of Requests associated with those taxpayers.

 

 

Appendix V

 

Operations Assistance Request (OAR) (Form 12412)

 

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

 

 

Appendix VI

 

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.



[1] The TAS is an independent organization within the Internal Revenue Service that provides assistance to taxpayers whose tax problems have not been resolved through normal channels.

[2] Delegation Order No. 267, January 17, 2001, and Internal Revenue Code Sections 7803 and 7811 (2007).

[3] The TAMIS is dedicated exclusively to recording, controlling, and processing taxpayer cases and is used by the TAS in the analysis of core tax issues, laws, policies, and internal IRS processes.

[4] Pub. L. No. 105-206, 112 Stat. 685 (codified as amended in scattered sections of 2 U.S.C., 5 U.S.C. app., 16 U.S.C., 19 U.S.C., 22 U.S.C., 23 U.S.C., 26 U.S.C., 31 U.S.C., 38 U.S.C., and 49 U.S.C.).

[5] Operating units include employees from collection, examination, customer service, and tax return processing who report to divisions or functions that include the Large and Mid-Size Business Division, Small Business/Self-Employed Division, Tax Exempt and Government Entities Division, Wage and Investment Division, Office of Appeals, and Criminal Investigation function.

[6] Only the Agreement between the TAS and the Criminal Investigation function requires the completed Requests to be returned to the TAS.

[7] Appendix IV explains the combined unreliable information estimate for the different results presented in this report.

[8] Our estimate is based on a 90 percent confidence level and a precision level of +2.32 days.

[9] The Taxpayer Advocate Service Needs to Improve Case Management to Ensure Taxpayer Problems Are Resolved Timely (Reference Number 2004-10-166, dated September 2004).

[10] A rejected Request can be closed on the TAMIS with more than one of the reject reasons listed.

[11] TAS monthly analyst conference call minutes dated March 16, 2006.  The Integrated Data Retrieval System is the IRS computer system capable of retrieving or updating stored information; it works in conjunction with a taxpayer’s account records.

[12] A TAS taxpayer may require more than one Request to resolve his or her account.        

[13] Campuses are the data processing arm of the IRS.  The campuses process paper and electronic submissions, correct errors, and forward data to the Computing Centers for analysis and posting to taxpayer accounts.