Detailed Information on the
Internal Revenue Service Taxpayer Service Assessment

Explore the mix of service options (phones, walk-in, internet, volunteer services) to ensure that the most efficient and effective means is used to deliver service. Spring 2008 Update: The launch of an electronically searchable Publication 17, Your Federal Income Tax, on IRS.gov; improving the training curriculum for volunteers in the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs; and releasing tax publications in additional languages, including Chinese, Russian, Korean, and Vietnamese were several of the notable recommendations from the Taxpayer Assistance Blueprint the IRS implemented in FY 2008. Additionally, an estimated wait time announcement to inform taxpayers the expected wait time (ETW) to speak to a customer service representative was also piloted during the 2008 filing season with 60% of callers receiving the wait time message. Results of the accuracy of the EWT and taxpayer behavior of those receiving the message is being analyzed and will be used to design an optimum set of messages. The web-based application “Where’s My Refund?” continues to provide an efficient method for taxpayers to check the status of their refunds, initiate an on-line refund trace, and provide an updated address if their refund was not deliverable as originally addressed. During the 2008 filing season (January 1, 2008 through June 1, 2008), the refund inquiry application received almost 36 million inquiries, a 20% increase from the same period during the 2007 filing season. Beginning in January 2008, the IRS expanded the value of the application by introducing a Spanish language version with almost 300,000 inquiries in its first year launch. As a testament to its success, the IRS used the same functionality to create a web application to assist taxpayers looking for their Economic Stimulus payment. The "Where's My Stimulus Payment?" application has been used by more than 19 million taxpayers since payment issuance started in May 2008. The IRS introduced a Spanish language version on May 27, 2008. In late 2008 the IRS will introduce an additional web based service enhancement taxpayers can use to access, view, and print their personal tax return and account transcripts through a secure channel entitled "My IRS Account." In 2009, "My IRS Account" will be enhanced to allow taxpayers to submit certain forms online, such as change of address and disclosure authorization forms, and to obtain a payoff amount for their tax liability. Data on use and viability will be analyzed and used in the determination of future needs and direction the IRS will take the application. A Facilitated Service Research Project (FSRP) was deployed to 15 select Taxpayer Assistance Center in 2008. FSRP is a self-help, with guidance function that gives taxpayers the tools (a computer with IRS.gov access and a phone) and an opportunity (with a TAC employee on-hand) to help themselves to IRS services. Traditional assistance will remain an option for any TAC customer who prefers face-to-face service. An analysis of FSRP data, observations, and lessons learned is underway with implementation of additional enhancements planned for the 35 additional sites scheduled to be launched in FY 2009.

Improve program performance by researching the impact of taxpayer service programs on voluntary compliance and reporting findings by 2007. (Delayed until 2008) Spring 2008 Update: In FY 2008, IRS began to research the right method of communication to meet taxpayer needs and improve its understanding of taxpayers needs through analysis of the errors they make. Also in FY 2008, IRS awarded a contract to have a survey conducted to gain a better understanding of taxpayer burden. The first survey conducted will be of individuals and is scheduled for late 2008, with results available for analysis in 2009. A second contract is planned for the design of a multi-year research plan to identify the impact of services provided on compliance. Contract award is planned for late FY 2008 with data collection and model building expected to begin in FY 2009.

Improve financial information as part of the IRS-wide financial management improvements. Spring 2008 Update: IRS continues to make great strides in addressing its financial management challenges and has resolved or substantially mitigated several material weaknesses and other less significant weaknesses in its internal controls. IRS has made progress in developing its cost accounting program including the issuance of a servicewide cost accounting policy in 2007 that provides guidance on managerial cost concepts. Cost pilot projects have been initiated to explore ways to apply cost information to various activities, a major step forward in efforts to develop cost benefit information needed to make better informed management decisions. Throughout the remainder of FY 2008 and continuing into FY 2009, the IRS will continue to explore ways to improve the use of the financial information available from the Integrated Financial System.

Improve the accuracy and consistency of tax law information provided to taxpayers by developing and implementing a single tool for use by walk-in and telephone assistors. Spring 2008 Update: By February 2008, a single tool Interactive Tax Law Assistor (ITLA) Version 1.0 was successfully launched for 45 of the 116 tax law categories (TLCs), replacing both the Probe & Response Guide (P&R Guide) and the Publication Method Guide (PMG) used by assistors at both Taxpayer Assistance Centers (TAC) and on the toll-free lines. The initial 45 categories represented the most frequently-asked tax topics, accounting for more than 50% of all tax law inquiries in both location types. ITLA Version 2.0 development is underway to address the remaining tax law categories. The Customer Online Decision Support (COLDS) Release 2 project, expected to be available in 2010, will take ITLA to the next level by providing the external customer with access to tax law information online, in an easily understandable format, via irs.gov.

Set long term goals for all programs during 2005.

Use customer satisfaction measures in its published performance budget.

Improve program performance by improving the accuracy of tax law telephone information provided to taxpayers to 90 percent accuracy by 2010.

The Budget streamlines taxpayer service programs by reducing dependence on walk-in service centers and increasing reliance on more efficient telephone and internet service. Because taxpayers have indicated a willingness to use lower cost service channels for certain transactions, the TAB Strategic Plan contains a Taxpayer Assistance Center research initiative to test a combination of assisted and self-assisted services. A TAB Program Management Office has been established to implement the strategies detailed in the TAB Phase 2 Report released to Congress in April 2007.

Measure: Customer Service Representative (CSR) Level of Service (%)

Explanation:The percent of time that taxpayers calling IRS toll-free operations successfully reach a live assister

Measure: Customer Accuracy - Tax Law Phones (%).

Explanation:Percent of answers provided by IRS telephone assisters on tax law questions which are accurate

Measure: Tax Law Accuracy for Walk-in Service (Percent of answers provided by IRS field assisters which are accurate.)

Explanation:Percent of answers provided by IRS field assisters which are accurate. Comparable data is unavailable after 2004.

Measure: Customer Accuracy - Customer Accounts (Phones) (%).

Explanation:Percent of answers provided by IRS telephone assisters on taxpayer accounts questions which are accurate.

Measure: Accuracy of Adjustments and Responses to Taxpayer Correspondence

Explanation:Percent of adjustments to taxpayer accounts and answers to taxpayer issues provided by correspondence units which are accurate.

Measure: Customer Satisfaction with Telephone Service

Explanation:Percent of customers responding they are either satisfied or very satisfied with IRS' telephone service (based on surveys of a random group of recent customers).

Measure: Customer Satisfaction with Walk-in Service

Explanation:Percent of customers responding they are either satisfied or very satisfied with IRS' walk-in service (based on surveys of a random group of recent customers).

Measure: Customer Satisfaction with Correspondence Service

Explanation:Percent of customers responding they are either satisfied or very satisfied with IRS' correspondence service (based on surveys of a random group of recent customers).

Measure: Customer Contacts Resolved Per Staff Year

Explanation:Total taxpayer contacts resolved for IRS customer service programs (phones, internet, walk-in) divided by FTE used.

Is the program purpose clear?

Explanation: The program's purpose is to reduce taxpayer burden by providing professional and courteous service to customers. This is accomplished by responding accurately to individual and practitioner technical and account inquiries, resolving customer account issues and providing account settlement (payment) options. Casework involves telephone calls, written correspondence, e-mail, and face-to-face assistance. Taxpayers serviced by the program gain a better understanding of tax laws, tax obligations and responsibilities relating to tax compliance. Employees are equipped with the necessary tools and training to provide everyday tax solutions and one-stop quality service. Services offered include tax law assistance, education and resolution of accounts and collection work.

Evidence: IRS' mission is laid out in its strategic plan and emphasizes customer service as required by the 1998 Restructuring Act. The purpose of its customer service programs is further detailed in the Internal Revenue Manual (IRM 1.1.13.10.4 p.60 "Organization and Staffing, Wage & Investment Division"). See also the IRS Restructuring and Reform Act of 1998, the Wage & Investment and Small Business/Self Employed Strategy and Program Plan, the Customer Accounts Services Concept of Operations, the Field Assistance mission statement IRM 1.1.13.9.6 and Concept of Operations.

Does the program address a specific and existing problem, interest or need?

Explanation: The Customer Service program addresses the specific needs of the taxpaying public for assistance in completing required tax forms, understanding employment tax laws and responding completely to notices, bills, and letters issued by the IRS.

Evidence: In our nation's self assessment tax system, taxpayers must understand complex rules for preparing tax returns and responding to correspondence from IRS. 130 million individual taxpayers and millions of businesses interact with IRS each year (see IRS Data Book table 2). Customer service functions help these taxpayers understand tax requirements.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The IRS is the primary point of taxpayer contact for individual and business tax account assistance within the government. In many cases responding to taxpayer questions requires access to taxpayer data which is only legally available to IRS.

Evidence: Tax assistance is also available from for profit and nonprofit organizations. The nonprofits complement IRS services and some are partially supported by IRS grant programs. However, these grant programs are not included in this evaluation.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: There is no evidence that an alternative structure would be more effective or efficient in delivering customer service. However, IRS does work to improve service and deploy alternative delivery methods (e.g., use of the internet rather than phones or correspondence).

Evidence: IRS uses a rich set of performance metrics to monitor and improve performance. Numerous General Accounting Office (GAO) and Tax Inspector General (IG) studies have also helped guide recent improvements in service levels.

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: IRS' customer service programs are intended to benefit all taxpayers in need of assistance. So, IRS' challenge is not so much targeting specific taxpayers as it is making sure that all taxpayers have access to efficient means to receive services. IRS uses a variety of means to reach taxpayers (web, phone, walk-in sites, and correspondence) and has recently introduced more language options. While improvements are still needed, IRS services are available to the vast majority of potential users.

Evidence: IRS' efforts to provide customer service are detailed in its strategic plan, performance plan, performance reports, and taxpayer publications.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Customer Service uses balanced measures for each of its sub-programs to track its success. These consist of measures of quantity, quality/accuracy and customer satisfaction. Telephone service has a measure of taxpayer success in reaching a live assister (level of service). The purpose of taxpayer service is to reduce taxpayer burden by providing professional and courteous service to customers. Taken together, IRS' balanced measures indicate IRS' success in meeting its goals (outcome).

Evidence: See IRS' annual performance plan and internal business unit Strategy and Program plans and Business Performance Review System reports for details on performance measures. Quality and customer satisfaction measures are based on random samples of actual customer interactions.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: While IRS has solid customer service performance measures, it has not yet set long term-goals. IRS has committed setting long term-goals in 2005.

Evidence: See IRS' strategic plan.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Customer Service uses the same balanced measures for annual progress as for long term progress (i.e., quality, customer satisfaction and telephone level of service). IRS has committed to introducing an efficiency measure (customer contacts per FTE) for this program. IRS should work to develop cost-based (rather than FTE-based) efficiency measures.

Evidence: See IRS' annual performance plan and internal business unit Strategy and Program plans and Business Performance Review System reports for details on performance measures. Quality and customer satisfaction measures are based on random samples of actual customer interactions.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Customer service has set ambitious targets for improvement. Targets are set annually through IRS' integrated budget and performance management planning process.

Evidence: See IRS' annual performance plan and internal business unit Strategy and Program plans and Business Performance Review System reports for details on performance measures and targets.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: IRS provides customer service support directly to taxpayers rather than working through partner agencies.

Evidence: Customer service functions do cooperate with other IRS functions to effectively serve taxpayers. IRS also runs several grant programs to assist taxpayers (e.g., Low Income Taxpayer Clinics). However, these are not covered as part of this program.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The IRS has extensive internal processes to look at performance and hires contractors to research customer service and satisfaction. In addition, these programs are frequently subject to IG and GAO audits. The IG regularly tests the accuracy of field office tax law assistance. GAO completes an annual audit of the tax filing season including a review of customer service functions. These audits provide an independent, quality assessment of customer service success in achieving its goal of providing "professional and courteous service." They often include auditor tests of IRS systems or reviews of samples of customer interactions. However, these audits have not yet provided data on the impact of customer service programs on IRS' ultimate compliance mission.

Evidence: Examples of evaluations include: GAO-04-84 IRS's 2003 Filing Season Showed Improvements, Tax IG-200440090 Taxpayer Assistance Center Employees Correctly Answered More Tax Law Questions During November and December 2003 Than Compared to One Year Ago, Tax IG-200440057 Toll-free Assistance to Taxpayers Is Professional and Timely, and Tax IG-200430038 Access to the Toll-free Telephone System Was Significantly Improved.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: IRS has a rigorous planning, budgeting and performance management process that integrates performance planning and budgeting. Budget requests are built around identified performance gaps and include expected performance increases.

Evidence: See Treasury's integrated budget and performance plan. While IRS presents integrated performance plans and budgets, it needs to continue to refine its systems for quantifying the specific performance impacts of specific resource changes. However, IRS has committed to improving this process for the 2006 budget cycle. IRS is also proposing a new budget structure in 2006 which shows the full costs of programs such as customer service.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: IRS has processes to focus on and improve management and performance. IRS has also agreed to add an efficiency measure in 2006 and set long term goals for its performance measures in 2005. In addition to these efforts, IRS should research the impact of customer service on compliance.

Evidence: IRS plans to begin using a "closures per FTE" efficiency measure for its correspondence unit in 2006.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The IRS collects a great deal of performance information. Measures are reviewed monthly at the corporate level and continuing improvement efforts are made to achieve annual goals. Site level performance measures are captured on a weekly basis and distributed and discussed with field personnel. Toll-free telephone performance by half hour, stratified by 58 separate applications is continually monitored for needed staffing shifts each day. Customer satisfaction surveys of taxpayers are conducted continually, with quarterly and annual reports by site and program. These results are analyzed as feedback to managerial actions previously taken to improve taxpayer service.

Evidence: IRS collection and use of measurement information is shown in its quarterly Business Performance Review System reports and other internal and external performance documents. For example, in January of 2004 IRS used its performance reporting system to identify a drop in telephone service accuracy. It took management action (e.g., training) within weeks to improve service to expected levels.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Managers are evaluated based on achieving "commitments" outlined in their performance plans. These commitments are actions designed to move the Customer Service program toward its goals.

Evidence: IRS uses a four step Performance Management System (PMS) process to ensure management accountability for achieving strategic goals. The key features of the PMS process are expectations planning, progress monitoring, performance evaluation and performance recognition. Performance commitments and expectations are developed, during the planning stage, that tie strategic business goals with demonstrable actions. Progress toward business goals are monitored throughout the performance cycle. Managers are evaluated annually and recognized accordingly.????

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: IRS has consistently spent its largely salaries and expenses operating funds in a timely manner and for the intended purposes.

Evidence: See GAO-04-126 Financial Audit: IRS's Fiscal Years 2003 and 2002 Financial Statements. IRS uses financial reports generated within the Automated Financial System (AFS), Business Performance Management System (BPMS) reports, Work Plans to plan and execute its budget.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: IRS has committed to introducing an efficiency measure (contacts per FTE) for this program. However, it does not yet have data for this measure. It has begun to experiment with competitive sourcing for tax law telephones, but has not yet planned or completed major studies.

Evidence: See Treasury's integrated budget and performance plan.

Does the program collaborate and coordinate effectively with related programs?

Explanation: Customer service functions coordinate closely with other IRS offices, federal, state and private sector organizations to provide income tax assistance to taxpayers. Customer service completes detailed annual filing season planning and execution efforts and memorandums of understanding on a variety of cross division efforts.

Evidence: Examples include linking IRS, Small Business Administration and other web sites to make it easer for taxpayers to find answers to tax and related questions. In addition, IRS has joined with the Federal Emergency Management Agency (FEMA) to create teams to help victims of disasters get tax relief. IRS also teams up with state governments and/or private organizations to set up tax help sites in non-traditional locations (e.g., malls).

Does the program use strong financial management practices?

Explanation: Weaknesses in IRS' financial systems result in a lack of reliable day-to-day management data. IRS is in the process of implementing a modernized financial management system for its administrative programs.

Evidence: Per GAO 2003 report on the IRS financial audit (GAO-04-126): IRS lacks "a financial management system that can produce timely, accurate, and useful information needed for day to day decisions."

Has the program taken meaningful steps to address its management deficiencies?

Explanation: IRS is in the process of implementing a new administrative financial accounting system (October 2004) to address the problems outlined in question 3.6. It has committed to introduce unit cost measures once this new system is functional.

Evidence: See IRS' Business Systems Modernization spending plans.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: As shown by its performance measures, the IRS has made progress in improving level of service and maintained high levels of customer satisfaction in telephone and walk-in service. However, accuracy remains a challenge in all its customer service programs, and IRS has not yet set long term targets. As a result, credit for this question is limited to "small extent." IRS plans to set long term goals in 2005.

Evidence: See Treasury's annual performance reports and IRS business unit Business Performance Review reports. IRS improved the percentage of taxpayer calls answered from just 62 percent in 2001 to 87 percent in 2004. For 2003 customer satisfaction was 95 percent for telephone service, 87 percent for walk-in service and 58 percent for correspondence.

Does the program (including program partners) achieve its annual performance goals?

Explanation: Customer service programs have a mixed record on achieving their performance goals. IRS' customer service programs have shown improvements in service but missed many of their performance goals for 2003 and FY 2004.

Evidence: As shown in its performance measures, In 2004 customer service achieved its performance goals for telephone level of service. It missed goals for telephone tax law accuracy and walk-in tax law accuracy.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: Customer Service does not currently measure efficiency. IRS has committed to introducing an efficiency measure (contacts per FTE) this program for the 2006 budget. It is likely that customer service has become more efficient due to greater use of the web, particularly products like "where's my refund" which divert customers from labor intensive telephone functions. However, any improvements cannot be demonstrated without efficiency measures.

Evidence:  

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: IRS argues that due to both the complexity and volume of telephone calls, walk-in contacts and correspondence received there are no comparable programs either governmental or private. IRS' research division has conducted several reviews comparing its Customer Service operation to other government agencies as well as private industry. These reports conclude that there is no 'industry standard' and each organization must determine its own standards based on its unique circumstances. In conclusion the report states, "If other organizations are less rigorous about reporting (or even measuring) their accuracy than is IRS, and if IRS deals with a broader range on issues, some of which are more complex than are issues dealt with by other organizations, then IRS' attempts to balance performance with speed, accuracy, friendliness, etc. might make its measures non-comparable."

Evidence: See IRS Research projects: "Phone System Customer Service Metrics for Comparisons with Other Organizations."; "How Far are People Willing to Drive for a Service"; IRS Customer Travel Findings"; "Phone System Interactive Voice Response: Customer Service Metrics and Suggestions"; "Phone System Wait Time: Customer Service Metrics" and; "Phone System Call Abandonment."

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Per evaluations by the Tax IG and GAO, IRS has improved its customer service significantly in recent years. Although problems remain - particularly with accuracy - improvements in management, technology and resources have led to improved telephone service and access to many products and services on the web.

Evidence: GAO noted service improvements in its GAO 04-84 IRS's 2003 Filing Season Showed Improvements. "While IRS provided significantly more accessible telephone service, the accuracy rate of IRS responses declined. The accuracy of tax law assistance provided at walk-in sites improved..."