TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
OPPORTUNITIES TO IMPROVE THE EFFECTIVENESS OF
INTERNAL REVENUE SERVICE ADVOCACY EFFORTS
Reference No. 199910061
The National Taxpayer Advocate has made important contributions to resolve issues negatively affecting taxpayers. For example, 5 of 18 legislative recommendations made in the FY 1997 Taxpayer Advocateís Annual Report to Congress were included, either in whole or in part, in the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998.
During Fiscal Years (FY) 1997 and 1998, Taxpayer Advocates worked on over 300 advocacy activities designed to improve IRS processes and recommend changes to tax legislation. Taxpayer Advocates are responsible for assisting taxpayers in resolving problems with the IRS, identifying areas in which taxpayers have problems in dealings with the IRS, and proposing changes in the IRSí practices to reduce these problems. The National Taxpayer Advocateís staff works with local advocates and IRS functional areas to identify issues affecting taxpayers. The staff also initiates corrective actions to improve the performance of IRS systems and prevent the occurrence of similar problems.
The objective of this review was to assess the effectiveness of the IRSí efforts to identify, evaluate, and resolve systemic and procedural issues affecting taxpayers. In our opinion, the National Taxpayer Advocate can provide additional guidance and oversight to the field offices for identifying, prioritizing, and evaluating issues affecting taxpayers. Controls should be strengthened to ensure that systemic and procedural issues affecting taxpayers are resolved timely and effectively. In addition, a methodology needs to be developed to measure program accomplishments, as well as formal goals for the advocacy program.
The National Taxpayer Advocate is responsible for making important contributions (legislative changes and advocacy initiatives) to resolve issues negatively affecting taxpayers. However, controls did not always ensure that systemic and procedural issues affecting taxpayers were effectively identified, evaluated, and resolved. Accordingly, the National Taxpayer Advocate can improve the effectiveness of advocacy efforts in the following areas.
Guidance and Oversight Related to the Identification and Evaluation of Issues Affecting Taxpayers Can Be Improved
Local advocates and advocacy councils did not always follow a structured or consistent approach to prioritizing and evaluating issues affecting taxpayers. Further, information recorded in the Problem Resolution Office Management Information System was not always accurate, and advocacy efforts were not always tracked and effectively coordinated.
Controls Over the Resolution of Issues Affecting Taxpayers Should Be Strengthened
Recommendations contained in advocacy reports were not formally monitored to ensure that corrective actions were taken or considered timely. Also, data contained on the Commissionerís Reporting and Tracking System were not always complete or accurate.
A Methodology to Measure Advocacy Program Accomplishments Needs to Be Developed
There is no methodology in place to measure advocacy program accomplishments resulting from advocacy projects or other advocacy efforts.
Summary of Recommendations
We recommended that the National Taxpayer Advocate provide additional guidance and information to assist local advocates in identifying significant issues affecting taxpayers. The National Taxpayer Advocate also needs to track and monitor the status of recommendations made to national IRS management to ensure that corrective actions are taken timely. In addition, the National Taxpayer Advocate should establish advocacy program goals and develop a system to measure advocacy program accomplishments consistent with IRS guidelines for managing statistics.
Management's Response: IRS management agreed with our recommendations. The Commissioner responded that they are currently modernizing the Taxpayer Advocate Service to provide better support to customers. The new structure directs management attention to two major program areas: casework and advocacy. Operating Division Taxpayer Advocates will manage systemic analysis and advocacy, and provide program guidance and support to advocacy analysts located throughout the country. Operating Division Taxpayer Advocates are also responsible for identifying systemic problems, working with the Operating Divisions to resolve them, and monitoring the results of the advocacy program.
Additionally, the National Taxpayer Advocate and the Program Executive for Taxpayer Treatment and Service Improvements (TSI) are working to incorporate advocacy projects into the TSI database. Plans include developing a separate area for advocacy. Operating Division Taxpayer Advocates will be able to track the status of advocacy projects, recommendations, and corrective actions through the TSI database. Finally, new organizational measures were drafted and are now being refined by National Taxpayer Advocate management.
Managementís complete response to a draft of this report is included as Appendix IV.
Office of Audit Comment: IRS management agreed with the report recommendations and provided general corrective actions for the summary of recommendations contained in the Executive Summary. However, the response did not address all of the corrective actions necessary to implement the eight specific recommendations presented in this report. Additionally, management's response did not identify the responsible official or include a plan and methodology for tracking the effectiveness of corrective actions, as specified in the Commissionerís January 14, 1999, memorandum "Responding to Treasury Inspector General for Tax Administration Audit Products." As a result, we could not determine whether adequate corrective action was planned for each specific recommendation.
We understand that the Taxpayer Advocate Service is reorganizing and that it may not be possible to determine when specific corrective actions will be completed for each recommendation. However, to avoid oversight during the reorganization, the National Taxpayer Advocate should develop specific corrective actions for each recommendation, establish a proposed completion date, identify the responsible official, and develop a plan and methodology for tracking the effectiveness of the corrective action.