Summary
Congress created the Taxpayer Advocate Service (TAS) to assist taxpayers in resolving problems with the Internal Revenue Service (IRS) and to propose changes to IRS's practices to mitigate problems affecting taxpayers in general. TAS uses case advocacy and systemic advocacy, respectively, to address these two goals. GAO was asked to address (1) why TAS's caseload has increased since 2004, (2) how well TAS conducted its case advocacy activities in terms of measures such as customer satisfaction and quality, and (3) how well TAS measures and reports its systemic advocacy efforts. GAO interviewed TAS and IRS managers and other staff, reviewed TAS and IRS documents, and analyzed TAS and IRS data.
The number of individual taxpayer cases opened by TAS increased substantially in fiscal years 2005 and 2006 and our analysis of TAS and IRS data shows that these increases correlated with increases in IRS enforcement activities both overall and in some specific IRS enforcement programs. For example, changes in the number of tax refunds frozen by IRS coincided with changes in the number of frozen refund cases at TAS. While TAS made changes after fiscal year 2004 to its guidance for accepting new taxpayer cases, this did not notably influence TAS's caseload increase in fiscal years 2005 and 2006. For example, TAS created two additional case acceptance criteria in fiscal year 2006 that resulted in a little more than 500 of the approximately 244,000 cases received that year. TAS measures customer satisfaction and found that the taxpayers TAS serves remained satisfied from fiscal years 2002 to 2006. TAS also measures the quality of its case advocacy and found that this improved from 2002 to 2004 and stayed about the same in 2005 and 2006. While these case advocacy measures are sound, there is important missing information in that TAS does not have meaningful measures of case advocacy efficiency or cost. A meaningful measure of efficiency would consider the ratio of cases closed to the time spent on them and take into account case complexity and the quality of the work, and unit cost information is needed to fully understand this information. TAS is developing the means to capture time per case, the key component of unit cost, and case complexity. TAS currently does not measure the effectiveness of its systemic advocacy efforts. TAS is piloting a program to study systemic advocacy effectiveness in a few areas, but not broadly. Also, it is difficult to determine what actions were taken to address systemic issues raised in the annual report to Congress, TAS's primary method for providing information to Congress and the public about its systemic advocacy efforts. For example, the report describes serious problems faced by the taxpayers but does not include the status of addressing those issues.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
James R. White
Government Accountability Office: Strategic Issues
(202) 512-5594
Recommendations for Executive Action
Recommendation: The National Taxpayer Advocate should improve TAS case advocacy performance measures with the addition of a true measure of efficiency that incorporates case complexity and quality and a cost measure.
Agency Affected: Department of the Treasury: Internal Revenue Service: Office of the Taxpayer Advocate
Status: In process
Comments: To address this recommendation, the Taxpayer Advocate Service (TAS) plans to develop a time reporting system that will assist in quantifying staff costs. This is being done in two phases. Phase I, which involves a timer application that is part of the Taxpayer Advocate Management System (TAMIS), will track the amount of on-line time a TAS employee spends on a case. This phase has been completed. Phase II will allow TAS staff to capture off-line time spent on a case. In February 2007, TAS submitted a work request to IRS's Modernization and Information Technology Services (MITS) office for Phase II. Also, in December 2006, TAS submitted a request to MITS to develop an on-line case complexity screen. Due to MITS's limited resources and competing priorities, MITS will not be able to deliver the system changes until late December 2008. We contacted TAS in early February 2008. TAS is still on track for the system changes to be delivered in December 2008.
Recommendation: The National Taxpayer Advocate should supplement the detailed information on specific systemic advocacy issues currently being developed with a broad measure of the effectiveness of systemic advocacy.
Agency Affected: Department of the Treasury: Internal Revenue Service: Office of the Taxpayer Advocate
Status: In process
Comments: TAS has identified the following metrics that may be useful in measuring the effectiveness of systemic advocacy: (a) percent of recommendations in National Taxpayer Advocate's Annual Reports to Congress addressed (e.g., through hearings, enactment, implementation of policy, etc.) or further pursued by TAS within four years of publication; (b)percent of TAS Immediate Interventions that are fully or substantially resolved within one year of identification; and (c) percent of TAS Advocacy Projects resolved or, where applicable, percent of TAS recommendations addressed by IRS within two years of project initiation (excluding issues also raised in the Annual Report to Congress). These measures are not perfect and are subject to change. However, TAS believes that they will aid in objectively assessing the performance of its systemic advocacy efforts. TAS will continue to modify these measures as necessary to ensure that they will truly enable TAS to broadly measure the effectiveness of systemic advocacy (implementation date--October 2007). In October 2006, TAS began evaluating the quality of closed Intermediate Interventions and Advocacy Projects (the two components of systemic advocacy) through monthly reviews that assess 20 specific attributes for timeliness, accuracy, and communication. The information from the FY 2007 baseline year was used to develop FY 2008 goals. TAS recently administered its first internal customer satisfaction survey for systemic advocacy. The data from the survey will be analyzed during FY 2008. FY 2008 will be used as a baseline for establishing long-term goals for FY 2009 through 2011. At the end of FY 2007, TAS identified the required data sources and methodology for delivery of systemic advocacy efficiency and effectiveness baseline measures. The results related to these measures will be reported quarterly through the TAS Business Performance Review (BPR) process. TAS will continue to analyze the results for these measures throughout FY 2008 to establish targets for FY 2009 through 2011. We will follow-up with TAS to obtain additional information related to the data sources and methodology and examples of the information reported through the BPR process before we close this recommendation.
Recommendation: The National Taxpayer Advocate should improve TAS reporting by (1) describing actions taken in response to TAS legislative recommendations, (2) describing actions taken by IRS to address the most serious problems encountered by taxpayers, and (3) making it clear that the most serious problems included in the annual report to Congress are at least 20 of the most serious problems but not necessarily all of the top problems faced by taxpayers.
Agency Affected: Department of the Treasury: Internal Revenue Service: Office of the Taxpayer Advocate
Status: Implemented
Comments: (1) The National Taxpayer Advocate's 2007 Annual Report to Congress includes a chart that summarizes congressional action on TAS legislative recommendations that were proposed in the 2003-2006 Annual Reports. (2) The Office of Internal Controls within IRS uses the Joint Audit Management Enterprise System (JAMES) to track open and implemented IRS, GAO, and Treasury Inspector General for Tax Administration findings, recommendations, and planned corrective actions. JAMES includes planned actions, actions taken, the status of the recommendations, and the responsible organization for addressing the recommendations. IRS is now using JAMES to track the actions it has taken to address the most serious problems included in the National Taxpayer Advocates's Annual Report. The most serious problems included in the 2006 Annual Report have been entered into JAMES and the most serious problems included in the 2007 Annual Report should be entered into JAMES by August 2008. TAS has also posted on its website "report cards" for its 2004, 2005, and 2006 Annual Reports. For example, the 2006 "report card" includes the most serious problems, the National Taxpayer Advocate's recommendations, and IRS's response including any actions taken to address the recommendations. (3) The National Taxpayer Advocate's 2006 Annual Report to Congress clarified that the most serious problems included in the report are at least 20 of the most serious problems but not necessarily all of the top problems faced by taxpayers. The report is dated December 31, 2006. The 2007 Annual Report, dated December 31, 2007, includes the same information.
