TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
GPRA: THE EXAMINATION DIVISION SHOULD ENSURE PROPER DISCLOSURE OF THE SAMPLE LIMITATIONS RELATING TO ITS CUSTOMER SATISFACTION MEASURE
Reference No. 2000-10-082
This audit was performed as part of the Treasury Inspector General for Tax Administrationís overall strategy to assess the reliability of the Internal Revenue Serviceís (IRS) customer satisfaction performance measures as they relate to the Government Performance and Results Act of 1993 (GPRA). The overall objective of our review was to assess the validity of the information used to measure customer satisfaction for the Examination Division.
The GPRA requires federal agencies to establish standards for measuring their performance and effectiveness. The law requires executive agencies to prepare multi-year strategic plans, annual performance plans, and performance reports on prior year accomplishments. The first annual performance reports must be provided to the Congress by March 31, 2000. The Congress will use the GPRA measurement results to help evaluate the IRSí budget appropriation. Therefore, it is essential that the IRS accurately measure its success in meeting the performance goals.
The IRS has prepared a strategic plan and an annual plan establishing goals for the agency. One of the IRSí three strategic goals is to provide top quality service to each taxpayer. The IRS is measuring its success in achieving this goal through surveys conducted by an outside vendor. Taxpayers who receive specific kinds of services are being asked to complete a survey to rate the service they received. These survey results are summarized and used to evaluate the overall satisfaction with the IRSí service.
IRS management has not established an effective process to ensure that the survey is conducted appropriately to measure the level of satisfaction customers receive from interactions with all Examination Division program areas. As a result, the IRS needs to qualify any of the data from the Examination Division Customer Satisfaction Surveys that will be presented in the Fiscal Year (FY) 1999 Annual Performance Report.
The Examination Divisionís Customer Satisfaction Survey Process Contains Limitations That Could Affect the Validity of the Measure
We identified limitations with the customer satisfaction survey process that result in an increased risk that the measure is not reliable. We determined that the data are not fully representative of the universe of examination cases. The survey population is based solely on audit closures of individual taxpayers. Audit closures involving corporate, estate, excise, and gift tax returns are not included in the survey population.
Another limitation is that the customer satisfaction measure includes only those contacts with taxpayers that occur as part of an audit. For example, taxpayers contacted as part of working innocent spouse determinations will not be surveyed unless the case involves an audit. The volume of innocent spouse cases increased to the point where the Examination Division had approximately 46,000 cases in its inventory as of December 31, 1999.
In addition, only 34 percent of the taxpayers to whom a survey was sent responded. The IRS requires at least a 70 percent response rate to the surveys. The low response rate of 34 percent means the IRS is using the opinion of those who responded to the survey and is assuming that the non-respondents have the same opinion.
We did find that the controls over the automated case control system, used to identify the survey population for the Examination Divisionís field and office functions Customer Satisfaction Survey, largely were in place. The controls were sufficient to preclude the existence of a significant number of uncontrolled examinations, which would have an adverse effect on the validity of the survey population.
Summary of Recommendations
The Assistant Commissioner (Examination) should clearly state the limitations of the sampling process and the resultant effect on the Examination Divisionís ability to report customer satisfaction in the FY 1999 Annual Performance Report. The Assistant Commissioner should also consider actions to increase the response rate to the surveys in order to decrease the risk associated with projecting to those taxpayers who do not respond to the survey. One possible approach would be to conduct a telephone survey of the taxpayers not responding to the mail survey.
Managementís Response: Managementís response was due on May 5, 2000. IRS management requested, and was given an extension of 5 workdays; however, as of May 12, 2000, IRS management had not responded to this draft report.