TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
OPPORTUNITIES EXIST TO ENHANCE THE INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM
Reference No. 2000-30-130
In 1991, the Internal Revenue Service (IRS) established the International Field Assistance Specialization Program (IFASP) to provide technical assistance in the examination of certain complex international tax issues so that there would be, among other benefits, increased revenue raising capabilities, fewer disputes due to better developed issues, and less time spent on examinations. The IRS developed the program because of the rapid growth of international tax issues during the 1970s and 1980s. Likewise, the IRS recognized it had a relatively inexperienced workforce in the international enforcement area.
The resources devoted to the IFASP are relatively small (approximately $1.5 million annually), considering its 8 specialists are responsible for assisting approximately 631 international examiners in areas of complex international tax law. To meet their responsibilities, IFASP specialists are expected to deliver a program of direct field assistance by providing written audit techniques and guidelines, continuing professional education, and documents outlining the IRSí position on complex areas of international tax law. Given the programís limited budget and high expectations, we determined if the management information system (MIS) of the IFASP provided reliable measures to document the performance of the program.
The IFASP is an important resource to the International Enforcement Program and is staffed with experienced international examiners who are trained in complex areas of international law. However, there are limitations with the MIS that kept us and the IRS from determining whether the IFASP was realizing the benefits expected when the IFASP was implemented. In addition, the IFASPís customers suggested actions could be taken to enhance the way services are delivered.
The International Field Assistance Specialization Program Is an Important Resource to the International Enforcement Program
The IFASP was established to support and improve international examinations that annually result in billions of dollars of recommended additional taxes. The IFASPís eight specialists were well-trained, experienced international examiners. The specialists had, collectively, 122 years of experience in the IRSí International Program, and each of the specialists earned at least 80 hours of continuing professional education in international tax issues during the last 2 years.
We conducted 2 surveys and received responses from 67 international examiners on 1 survey, and 60 group managers and 9 attorneys that were management officials in the Office of the Associate Chief Counsel (International) on the other. The results in both surveys showed strong support for the IFASP. In the survey of the international examiners, 64 percent of the respondents indicated that the IFASP involvement helped them in their examination and most said they would use IFASP again. Eighty-seven percent of the management officials believed that the IFASP assistance improved the quality of examinations.
Weaknesses in Measuring and Delivering Program Services
Ideally, effective MISs enhance program accountability by supplying managers with critical information for documenting performance, measuring progress towards achieving goals, and reporting accomplishments Ė in short, whether the benefits are being realized. However, neither the IRS nor we could quantify how much actual effect the IFASP has had on international tax issues or if more examinations could have benefited from the IFASP. Moreover, international examination assessments are trending downward, the number of examinations with international tax issues is increasing, and the IFASP customers suggested actions could be taken to enhance the way services are delivered. Because of these conditions, we believe there are opportunities to enhance the program.
One improvement lies with linking the IFASP indicator in the International Case Management System (ICMS) to the specific issues that the IFASP helped develop. Not specifying in the ICMS database which issue(s) the IFASP was involved with makes it difficult, if not impossible, to measure the effect the IFASP has on any given issue or examination. Another opportunity for improvement lies with improving the way the IFASP delivers its services. IFASP assistance is usually requested and given over the telephone. While the telephone can be an efficient way to communicate on an individual basis, our survey of international examiners and managers suggests that the IRS management has not fully leveraged the benefits of communications technology. Approximately 82 percent of respondents indicated that they would like to exchange more information electronically with the IFASP through the IRSí Intranet.
Summary of Recommendations
The Commissioner, Large and Mid-Size Business Division, should take steps to improve the MIS by better linking the IFASP to specific issues listed in the ICMS. Further, the IFASPís service delivery could be enhanced by receiving and disseminating more information electronically.
Managementís Response: The Commissioner, Large and Mid-Size Business Division, agreed with our recommendations. The LMSB Division is currently in the process of revising and incorporating the ICMS into the Coordinated Examination Management Information System (CEMIS). As part of the revision they will add an IFASP involvement indicator to specific issues listed on CEMIS.
The LMSB Division is also in the process of providing all of its employees secured Intranet access so they can communicate from the audit site. The Division is developing a referral process for specialists to provide services to all IRS personnel, and the IFASP electronic referral will be included in this process.
Managementís complete response to the draft report is included as Appendix VI.