(Washington, DC) The IRS 2007 Employee Satisfaction Survey highlighted the IRS Oversight Board's September 25-26th meeting. The 2007 survey, which has been revised to use the same questions as the Federal Human Capital Survey, showed a 21 percentage point improvement in the employee participation rate over last year's survey. Senior IRS officials also updated the Board on the agency's progress in meeting key performance measures, its corporate audit programs and current and future National Research Program initiatives, including the Subchapter S-Corporation and Individual Income Reporting Compliance studies.
Board Briefed on Survey
The Oversight Board was pleased by the 2007 Employee Satisfaction Survey participation rate. In 2006, only 43 percent of IRS employees took part in the annual survey. This year, 64 percent participated – a gain of more than 50 percent. "The improvement in employee participation in the survey is gratifying for a number of reasons," said Board Chair Paul Jones. "First, this is a great start for the survey with so many employees taking part in it. Obviously, they value the survey's importance, as does the Board. I'm also delighted that the NTEU encouraged its members to participate in the survey, which clearly made a difference.Second, we are now confident that the IRS has a good baseline that it can use to take action on areas that need improvement. Taking follow-up action is critical to using the survey effectively and keeping participation high. And third, we see overall and continued progress in employee job satisfaction."
The 2007 Survey found that 69 percent of all IRS employees are satisfied with their jobs. Many of the operating divisions and other parts of the agency exceeded that figure. For example, Tax Exempt and Government Entities (TE/GE) and Large & Mid-Size Business (LMSB) came in at 79 percent and 76 percent respectively. However, at the other end of the scale, the two largest operating divisions – Small Business/ Self Employed (SB/SE) and Wage and Investment (W&I) fell short of the Agency-wide 69 percent mark by one and two percentage points respectively.
The 2007 survey also showed that IRS employees strongly believe that their work is important. Most employees also felt that their immediate supervisor or team leader was doing a good job. However, fewer thought their work unit was able to recruit people with the right skills or that proper steps are taken to "deal with a poor performer who cannot or will not improve."
Steady Progress Being Made on Key Measures
IRS Acting Commissioner Linda E. Stiff made a presentation to the Board describing the progress the IRS has made over the past five years in meeting critical performance measures. From 2002 to 2006, the IRS has improved its American Customer Service Index rating from 62 to 65. E-filing for individuals has shown remarkable gains, growing from 35.6 million in 2002 to a projected 57 million in 2007. Enforcement revenues also continue to rise, from 34.1 billion in FY2002 to a projected 53.3 billion in FY2007. Business Systems Modernization (BSM) performance has stabilized and is delivering value to customers through programs such as the Customer Account Data Engine and e-Services. Board Chair Jones said, "Clearly, steady and balanced progress is being made and the IRS is to be commended for its hard work and determination. There is every reason to believe that this positive trend will continue into the future and we have high expectations for the agency's performance in the months and years ahead."
Current and Planned Research Studies and Long-Term Measures Discussed
To help reduce the U.S. $290 billion net tax gap, the IRS must understand non-compliance. Knowing what keeps some taxpayers from paying their taxes can help the agency focus on "problem areas." However, determining exactly where the problem areas are and finding ways to improve compliance requires timely, regular research and analysis.
For that reason, the Board is very pleased that its long-time recommendation for additional research on compliance may be coming to fruition. If sufficient resources are appropriated in FY2008, the IRS will be able to carry out several long-term research initiatives to improve compliance estimates, measures and detection of non-compliance.
At the meeting, IRS Director of Research, Analysis and Statistics (RAS) Mark J. Mazur and the Board discussed current and planned National Research Program reporting compliance studies. For the Subchapter S-Corporation study, he reported that data will be available by the end of 2007, with analysis beginning in 2008. The Individual Income study will include a sample of 13,000 individual returns per year, beginning with the 2006 tax year. The study will use a new methodological approach that relies on an annual sample of around 13,000 individual returns to substantially reduce the burden on taxpayers in any one year, compared to the tax year 2001 study that required a sample of around 46,000 returns. Planning and implementation are underway, with audits starting in October 2007.
In addition, the Board and Mr. Mazur discussed the progress of additional long-term measures. In March 2007, the Oversight Board approved five long-term goals and requested the IRS to identify additional goals for employee engagement and customer satisfaction, and develop a measure to assess progress in modernizing its technology systems. The IRS gave the Board a status report on its work to identify and develop the additional measures.
LMSB Gives Overview on Exam Programs
Large and Mid-Size Business (LMSB) Commissioner-designee Frank Ng provided an overview to the Board on the Division's strategy, priorities and challenges. As the corporate tax environment changes, the IRS must be prepared to meet new challenges, such as globalization, complex business models, aggressive tax planning, and increased regulatory scrutiny. To meet these challenges, the IRS must make the most of its limited resources and use improved data and advanced technology to save resources and boost productivity. Commissioner Ng discussed new approaches to large corporate tax administration, such as the Limited Issue Focused Examination (LIFE) and Compliance Assurance Program (CAP). Both initiatives are focused on resolving issues early, reducing the need for post-filing examinations, and reducing burden on both corporations and the IRS. The Board was further briefed on the accounting rule known as FIN 48, which requires companies to disclose how much money they have set aside if a tax shelter or tax-cutting arrangement is successfully challenged by government in the courts. These FIN 48 disclosures have the potential to impact the LMSB examination program.
IRS Strategic Plan Update Discussed
The Board also discussed with Acting Commissioner Stiff the need for the Agency to begin updating its current five-year strategic plan that expires in 2009. One of the Board's most important statutory responsibilities under the IRS Restructuring and Reform Act of 1998 is to review and approve the IRS' strategic plan. "The IRS strategic plan is more than just a plan. It is the Agency's road map to the future. The strategic plan sets forth a clearly-defined vision of tax administration and the goals that must be met to fully realize it," observed Board Chair Jones.
The IRS Oversight Board will next meet in Washington, DC on November 13-14, 2007.