TIGTA Seal graphic

Treasury Inspector General for Tax Administration

Press Release


March 8, 2016
TIGTA - 2016-06
Contact: Karen Kraushaar, Director of Communications
Karen.Kraushaar@tigta.treas.gov
(202) 622-6500

Inconsistent Use of Over-age Correspondence Lists Contributes to Taxpayer Burden and Unnecessary Interest Payments

WASHINGTON — The inconsistent use of over-age correspondence lists by some managers at the Internal Revenue Service (IRS) causes delays in processing taxpayers’ correspondence, creating a burden for taxpayers who must wait to obtain assistance and, in some cases, receive refunds. This is a finding in an audit report that the Treasury Inspector General for Tax Administration (TIGTA) issued today.

The IRS’s internal guidelines state that correspondence from taxpayers is generally considered over-age if not resolved within 45 days. Customer satisfaction surveys identified that taxpayers were dissatisfied with the length of time the IRS took to resolve their cases. In addition, these delays can result in the IRS unnecessarily paying interest to taxpayers.

TIGTA initiated this audit to evaluate the IRS processes for timely resolving taxpayer correspondence. Over-aged correspondence has steadily increased from 40 percent in Fiscal Year 2012 to 49 percent in Fiscal Year 2015.

In previous reviews, TIGTA reported that the IRS should develop a consistent process to ensure that managers complete their reviews of Automated Age Listings - that is, correspondence over-age reports. TIGTA identified that the IRS has taken actions to improve correspondence inventory management. For example, the IRS developed and implemented its Phased Approach to Inventory in all its campuses during Fiscal Year 2014. The objective of this approach is to close as many cases as early as possible to reduce inventory and improve the timeliness of case resolutions.

The IRS also initiated a pilot in February 2015 to develop a consistent process for monitoring over-age reports. Despite these actions, the percentage of over-age correspondence continues to increase. This results, in part, from some managers continuing to not follow internal guidelines that require the use of over-age reports to monitor and reduce inventory.

TIGTA’s analysis of eight customer service representatives’ over-age reports for three consecutive weeks identified that 16 to 82 percent of their over-aged assigned cases remained unresolved. TIGTA has previously reported on this same issue. Management responded that they would ensure that managers completed these reviews, noting that they would develop a consistent process to ensure that managers completed correspondence over-age report reviews. However, some managers continue to not adhere consistently to the required use of over-age reports, which contributes to the IRS’s inability to effectively reduce over-aged inventory.

“Delays in processing correspondence create a burden for taxpayers, who must wait to obtain assistance and, in some cases, receive refunds. For the IRS, the delays can result in the unnecessary payment of interest,” said J. Russell George, Treasury Inspector General for Tax Administration. “In FY 2014, the IRS paid more than $27.6 million to taxpayers as a result of not timely processing or resolving correspondence cases,” he added.

TIGTA recommended that the IRS ensure that managers provide and receive annotated over-age reports from their employees on a weekly basis. The IRS agreed with both recommendations and plans to assess current procedures to develop a consistent process related to the over-age reports.

Read the report.

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Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.