TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION
THE OFFICE OF APPEALS CLOSED CASE
FILES ARE OVERWHELMING ONSITE STORAGE SPACE
Issued on January 15, 2008
Highlights
Highlights of
Report Number: 2008-10-055 to the
Internal Revenue Service Chief,
Appeals.
IMPACT ON TAXPAYERS
The Office of
Appeals (Appeals) creates an internal file containing copies of documents
related to each hearing conducted. However,
because it closes more than 100,000 cases a year, Appeals is running out of
storage space for these files and has begun shipping them to offsite storage
for a fee. Appeals could save the time
for creating the files and expense of the offsite storage to improve taxpayer
services in support of its mission. The
staff time used to create the files could be used to process additional Appeals
cases, and the funds used to pay for the offsite storage could be used to fund
additional staff positions in Appeals.
WHY TIGTA DID THE AUDIT
The Appeals closed case files contain information that is duplicated
in the official administrative files. TIGTA
reviewed the uses of the Appeals files and the costs to create and store them
to determine whether Appeals’ policy for maintaining closed files was effective
and efficient. The overall objective of
this review was to determine whether Appeals has an effective process to
efficiently retain closed case information.
WHAT
TIGTA FOUND
The Appeals closed case filing system is rapidly becoming
unmanageable and losing the benefit of its original reason for creation. Appeals closed case files are used primarily
because Appeals has had difficulty in obtaining administrative files promptly
from the Internal Revenue Service (IRS) business units. Because its inventory is consistently more
than 100,000 closed cases per year, and some closed case files are retained for
up to 10 years, Appeals is faced with difficult decisions about the method it
uses to retain these files. Some case
files are no longer easily accessible to Appeals employees, and Appeals is
running out of storage space. In addition,
the Appeals files contain duplicate information that is available in the
administrative files and, in some cases, electronically on the Appeals computer
system. Further, Appeals did not know
how often its files were used and by whom, what documents were requested, what
types of cases were reviewed most often, or how often its files were needed as
the cases got older.
Due to space limitations, Appeals has begun to ship some
files to a
In Calendar Year 2003, Appeals began development of the
Paperless Attachment Program to create and store electronic versions of its
files. However, the Program was not
adequately planned or tested. In Fiscal
Year 2007, Appeals suspended the Program to evaluate technical alternatives and
to implement a project management approach.
Appeals should further assess the storage and technical requirements of
the Program and conduct controlled tests before implementing it.
WHAT TIGTA RECOMMENDED
The
Chief, Appeals, should conduct
an analysis to determine how often and when Appeals files are accessed,
including what documents are most often reviewed; based on this analysis, issue
new guidelines for retention of Appeals files; destroy or return the existing
Appeals files currently stored at a Federal Records Center and discontinue
sending them for storage; and conduct further planning, analysis, and testing
of the Paperless Attachment Program.
In their
response to the report, IRS management agreed with all recommendations and plans
to take appropriate corrective actions.
READ THE
FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go to:
http://www.treas.gov/tigta/auditreports/2008reports/200810055fr.html.
Email
Address: inquiries@tigta.treas.gov
Phone Number: 202-622-6500
Web Site:
http://www.tigta.gov