The newly created Tax Exempt and Government Entities (TE/GE) Division is committed to providing its customers with the highest quality service possible in a timely, efficient and courteous manner. Our objective for this audit was to evaluate whether the TE/GE Division effectively implemented a telephone operation that provided quality customer service. To meet this commitment, the TE/GE Division established a centralized customer service site in the Ohio Key District Office (OKDO). The implementation of the TE/GE Division’s centralized telephone operation should improve the quality and timeliness of service provided to its customers by assisting them in understanding and complying with applicable tax laws.

The Internal Revenue Service (IRS) has made significant progress in implementing the centralized telephone operation for the TE/GE Division and has demonstrated that it is responsive to inquiries being made by customers. During Fiscal Year (FY) 1999, the TE/GE Division’s centralized customer service call site reported that it received 185,521 telephone calls, of which 156,447 callers spoke to a Customer Service Representative (CSR). In addition, the TE/GE Division implemented review processes to determine whether CSRs are properly responding to customers’ inquiries.

While the TE/GE Division has made considerable progress in implementing its telephone operation, additional enhancements are needed to provide customers with the highest quality service in a timely, efficient, and courteous manner. Specifically, the IRS needs to ensure that TE/GE Division employees have the technology and resources not only to manage the current call volume but also to meet future growth. Also, goals and performance measures are needed to determine whether the IRS is meeting customer and stakeholder expectations. In addition, the TE/GE Division needs to enhance its guidelines for CSRs and management reviews and improve its quality assurance process so that inefficiencies and other areas needing improvement can be identified.

The TE/GE Division’s centralized customer service site is not able to use the latest telephone technology, which inhibits its ability to provide timely and effective service to its customers. The current infrastructure:

• Does not have the capacity to expand.
• Cannot redirect misrouted telephone calls.
• Does not always permit managers to monitor calls on a real-time basis.
• Does not permit reports to be generated automatically.
• Has limited call routing capabilities.
• Has insufficient voice messaging capabilities.
• Does not have the capability to let customers use the Automated Self-Service Applications.

Improvements to the infrastructure at the TE/GE Division’s centralized customer service site are necessary to provide organizations with high-quality customer service. The lack of a dedicated toll-free routing system leads to inefficiencies for organizations to access the IRS’ resources. The TE/GE Division’s centralized customer service site also lacks the tools to effectively monitor and quickly make adjustments to telephone service requirements.

The IRS has not established specific program goals to measure the effectiveness or efficiency of the centralized telephone operation. Specific goals are needed to effectively measure the success of the TE/GE Division’s centralized customer service call site and assess whether it is meeting customer and stakeholder expectations. Without program goals, priorities of the TE/GE Division cannot be effectively communicated to provide the necessary guidance for monitoring the performance of the telephone operation. The Commissioner, TE/GE Division, advised us that a team has been established to formulate the program goals for the customer service operation.

The TE/GE Division does not have processes in place to track and analyze the reasons customers are making inquiries and whether these inquiries are resolved on initial contact. The Quality Assurance process could be used by the TE/GE Division to determine the reasons for the inquiries and identify opportunities to improve the responses provided to customers. This process can also be used to capture information on areas where inquiries could be managed through automation.

The TE/GE Division also does not have sufficient guidelines in place to assist CSRs in responding to customer inquiries. On 1 day, we monitored 16 telephone calls and observed that some CSRs experienced difficulties in readily identifying materials that would answer the customer’s inquiry.

The TE/GE Division’s centralized customer service call site has not developed a comprehensive business resumption plan in the event that its operation is disrupted. While the OKDO had drafted a disaster plan in the event that the Federal Office Building was destroyed, the TE/GE Division still needs to develop a plan for other short-term disruptions. Since its inception in February 1999, the TE/GE Division’s centralized customer service call site has experienced one significant disruption when the IRS was unable to answer questions. The lack of a business resumption plan increases taxpayer burden because customers must re-contact the IRS to get their questions resolved in the event the IRS or the TE/GE Division’s call sites experience a major disruption in the telephone operation.

The IRS needs to ensure that the TE/GE Division’s centralized customer service call site receives sufficient technology to manage future growth, provide its employees with the tools to effectively monitor the operation, and make the necessary adjustments that will improve the overall effectiveness of the telephone operation. This technology should also give TE/GE Division customers the ability to use automated self-service applications for immediate access to selected information without waiting for a CSR.

The Commissioner, TE/GE Division, should ensure that goals are established for measuring the effectiveness, efficiency, and timeliness of the customer service call site. In addition, the Commissioner, TE/GE Division, needs to enhance CSR guidelines and improve the Quality Assurance process of the telephone operation by tracking the reasons organizations are calling and ensuring appropriate actions are taken to improve service either through automation or taxpayer education. The Commissioner, TE/GE Division, should also have a comprehensive business resumption plan in place in the event the telephone operation is disrupted.

Management’s Response: TE/GE Division management will look for ways to improve its telephone system to manage future growth and effectively monitor the telephone operation. The TE/GE Division’s Phase III Design Team is developing program goals for the centralized customer service telephone operation.

The Quality Assurance staff will improve the desk guide and develop job aids similar to those used at other IRS Customer Service sites. The Quality Assurance function will also improve its processes by tracking the reasons organizations are calling and ensuring appropriate actions are taken to improve service either through automation or taxpayer education. In addition, the TE/GE Division will analyze the steps needed to minimize the effects of a business disruption on the telephone operation, including the costs and benefits of implementing these steps.

Management’s complete response to the draft report is included as Appendix V.