TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION
THE OFFICE OF APPEALS NEEDS TO
IMPROVE THE MONITORING OF ITS CAMPUS OPERATIONS QUALITY
Issued on May 10, 2007
Highlights
Highlights of
Report Number: 2007-10-071 to the
Internal Revenue Service Chief, Appeals.
IMPACT ON TAXPAYERS
The centralization of certain types of
cases into the campus operations is a major Office of Appeals (Appeals) strategy
for improving service to taxpayers and reducing case processing time. The Appeals Quality Measurement System, which
is used by Appeals to monitor and report on the overall quality of casework,
was not modified to produce a statistically valid evaluation of the quality of
casework performed within specific campuses or specific work streams. As a result, Appeals may not detect areas
needing improvement within the campuses or be able to determine if its strategy
for improving quality is successful.
Campus
personnel did not always follow the correct procedures or make the correct
determinations on taxpayer appeals, which could result in increased taxpayer
burden, reduction of taxpayer rights and entitlements, reduction of taxpayer
privacy and security, and lost revenue to the Federal Government.
WHY TIGTA DID THE AUDIT
The centralization of the Appeals casework was a
major new initiative that affected the quality of casework as well as the
length of time cases were processed in Appeals.
Significant new initiatives were undertaken by Appeals to implement the
campus operations. TIGTA’s audit
objective was to evaluate the quality and effectiveness of the centralized
campus operations.
WHAT
TIGTA FOUND
Appeals
was not monitoring the quality of work performed within the campuses in a
statistically valid manner, Appeals did not always offer face-to-face hearings,
campus employees made incorrect determinations, and proper notifications were
not provided in Innocent Spouse cases. There
were unnecessary delays when the campuses processed Collection Due Process and
Offer in Compromise cases and long periods of inactivity during the processing of
Penalty Appeals cases and Innocent Spouse claims.
WHAT TIGTA RECOMMENDED
The Chief, Appeals, should revise the
methodology used to select statistically valid samples of cases closed by the
campus operations to measure and report on the quality of casework; provide
updated guidance and training sessions to ensure employees adhere to legal
notification requirements when processing Innocent Spouse cases; communicate
clarifications of the penalty abatement policies as well as emphasize the need
for proper case research and application of penalty abatement criteria; and implement
a review process to ensure campus employees make the correct decisions on
statute of limitations claims. The
Chief, Appeals, should also adopt consistent language for Uniform
Acknowledgment Letters issued for Innocent Spouse, Non-Docketed, and Offer in
Compromise cases to adequately inform taxpayers of the opportunity for
requesting face-to-face hearings; revise the methods used to monitor the aging
of Penalty Appeals cases and Innocent Spouse claims; and establish a timeliness
standard for issuing Uniform Acknowledgment Letters for all Appeals
casework.
Management agreed with our
recommendations and is evaluating the options for measuring and evaluating
campus case quality. Appeals plans to
update Innocent Spouse case procedures and revise the notification letters used
for these types of cases, conduct random sample
reviews of refund claim cases to ensure proper decisions are being made, adopt
consistent language in the Uniform Acknowledgement Letters to inform taxpayers
of their options for requesting a face-to-face hearing, use real-time data to
identify and address potential over-age cases, update the Internal Revenue
Manual for the new processes, implement new action codes to track timely
issuance of the Uniform Acknowledgment Letters, and update the procedures to
document the new timeliness standard.
READ THE
FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go to:
http://www.treas.gov/tigta/auditreports/2007reports/200710071fr.html.
Email
Address: Bonnie.Heald@tigta.treas.gov
Phone Number: 202-927-7037
Web Site:
http://www.tigta.gov