Summary

In response to a congressional request, GAO discussed the Internal Revenue Service's (IRS) efforts to improve its handling of taxpayer correspondence to determine whether the IRS Adjustments/Correspondence Branches: (1) accurately and clearly correspond with taxpayers; and (2) comply with administrative procedures.

GAO reviewed a random sample of IRS cases involving correspondence and found that: (1) about half of the correspondence contained correct, complete, and clear information; (2) 31 percent contained critical errors involving incorrect adjustments and unresponsive letters to taxpayers; (3) 16 percent contained noncritical problems involving unclear or incomplete letters or incomplete actions; and (4) in 68 percent of the cases, IRS personnel failed to comply with administrative procedures requiring them to send acknowledgement letters and interim responses to taxpayers. GAO also found that IRS: (1) planned to implement a new computer system in 1990 which would facilitate the selection of appropriate responses to taxpayer inquiries; (2) lacked specific information on the quality of its cases involving correspondence; and (3) had difficulty retaining examiners because of the strict requirements and lack of advancement.