This management advisory report provides information about and recommendations for improving the project management of the Internal Revenue Service’s (IRS) Walk-In Program Management Information System (MIS).

The IRS Restructuring and Reform Act of 1998 resulted in a new IRS mission statement which reflects a shift in tax administration that emphasizes taxpayer service. The emphasis on service to taxpayers to accomplish the agency’s mission has elevated the significance of the IRS’ Customer Service programs including the Walk-In Program. Each year, approximately 10 million taxpayers seek tax assistance at more than 400 walk-in sites.

The General Accounting Office (GAO), IRS Inspection Service (now the Treasury Inspector General for Tax Administration), and Customer Service have reported that the Walk-In Program does not have accurate or sufficient management information to make informed program decisions, and that the Program does not have a system to determine the quality of walk-in service. We initiated this audit to determine the effectiveness of the Walk-In Program MIS in capturing information needed to produce an effective customer-driven program. Accurate data regarding the reasons taxpayers seek face-to-face assistance and the quality of that assistance are critical if the Walk-In Program is to support the IRS’ mission of providing top quality service to taxpayers.

Customer Service management implemented a quality review process that should provide management with information needed to measure the quality of service provided to taxpayers at walk-in locations. Customer Service has also begun implementing the Q-Matic, a technologically advanced MIS to replace the Walk-In Program’s current MIS, the Resource Management Information System (RMIS). However, Customer Service needs to implement the Q-Matic in accordance with Office of Management and Budget requirements to ensure that it delivers all expected outcomes within prescribed costs and time frames.

Customer Service is implementing the Q-Matic at an estimated cost of approximately $5.5 million. When fully implemented, all individual Q-Matic systems installed at walk-in sites will be electronically linked to form the MIS.

However, this acquisition is not being managed according to all requirements of an investment management process, including the development of a complete and accurate business case. Implementation costs have not been fully identified and documented, and funding for the Project has not been secured. Plans to address problems identified during a test period have not been formally documented to ensure the problems are monitored and resolved. As a result, the $5.5 million cost estimate may be even higher, continued funding for the Project is uncertain, and project management controls are not in place to ensure that the system will deliver the expected outcome of an improved MIS that can replace the RMIS.

To ensure that the Q-Matic will be an effective Walk-In Program MIS, Customer Service should update the Q-Matic business case or project plan to reflect complete and accurate implementation costs and to secure full funding for the Project. Management needs to determine and document how the individual Q-Matic systems will be networked, whether crucial consolidated reports can be delivered, and who will be responsible for these tasks, the IRS or the vendor. Additionally, management needs to identify the type of system to be used for small walk-in offices and ensure that accurate data on all taxpayer assistance are entered into the Q-Matic.

Management’s Response: Customer Service management agreed with the findings and recommendations in this report and has implemented or planned corrective actions. The Q-Matic project plan will be updated with the necessary revisions. Customer Service is working with Information Systems and has prepared a Request for Information Services to develop a network solution. Once the network has been established, Q-Matic will be able to provide consolidated reports. Customer Service will identify and test an appropriate Q-Matic system for the small walk-in offices.

To improve the accuracy of taxpayer assistance data, Customer Service will continue to explore ways to use Q-Matic to capture information for taxpayers served at workstations located away from the area where the Q-Matic equipment is located. They have created a training class to instruct all Customer Service Representatives (CSR) on the proper use of Q-Matic closing codes. Customer Service will also establish a process of examining monthly closing code reports and contacting CSR managers to determine reasons for using the "Other Issues" code and if additional closing code(s) should be established.