The Field Collection program is organized to make direct contact with  individuals and business officials to enforce tax filing and payment  requirements. Group managers select  and assign collection cases to revenue officers for resolution. Cases are removed from Field Collection’s  inventory of cases for potential selection when they are assigned to a revenue officer for resolution, are shelved; or expire under statute of limitations laws. Specifically, the lack of clearly defined objectives directly impacts IRS’s  ability to effectively measure Field Collection performance, assess risks to  the achievement of objectives, and assess the continued effectiveness of  automated processes. Finally, we identified the lack of adequate  procedures to guide group managers’ use of judgment in selecting cases. Specifically, when we asked focus  group participants what fairness means to them and how they apply  fairness in case selection, managers’ responses included: avoiding conflicts of interest, such as cases where the group manager  or revenue officer has a prior relationship with an individual or  business;  selecting cases with consideration of geography, such as to ensure  there are no areas where taxpayers are in a “tax free zone;” and diversifying selections by type of business, selecting cases so that the  Field Collection program provides broad coverage, cases selected are  representative, and no one group of taxpayers is selected more than  others. However, without clearly defined and clearly understood  objectives aligned to the Field Collection mission, program management  lacks reasonable assurance that case selection processes support  achievement of IRS’s mission, including applying tax law with integrity  and fairness to all. Automated Processes

The Field Collection program’s automated prioritization and decision  support systems are control procedures that are intended to help guide  staff to reduce risks in making decisions. Develop, document, and communicate control procedures guidance  for group managers to exercise professional judgment in the Field  Collection program case selection process to achieve fairness and  other program and collection case selection objectives. By evaluating  the Field Collection program’s internal control framework for selection, we  were able to determine whether IRS has processes in place that provide  reasonable assurance of fair case selection. IRS outlines planned actions to address each of our recommendations. However, it is not clear that these actions will be fully responsive to the  first recommendation that IRS develop, document, and communicate  Field Collection program and case selection objectives, including the role  of fairness, in clear and measurable terms. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) describe the Field Collection program’s  processes (automated and manual) for prioritizing and selecting cases  and (2) assess how well Field Collection case selection processes  support the collection program’s mission, including applying tax laws “with  integrity and fairness to all.”
To describe the case selection processes, we reviewed program  documents and interviewed knowledgeable IRS officials, including  officials in the Small Business and Self-Employed Division Collection and  Field Collection offices. Our document review included guidance in the  Internal Revenue Manual (IRM) and automated system manuals. To evaluate how well the case selection processes support program  goals, we compared the selection process and procedures to selected  standards in Standards for Internal Control in the Federal Government, to  include the standard that managers define program objectives, assess  risks to the objectives, and design controls to support the achievement of  the objectives and address the risks.
Why GAO Did This Study

IRS's Field Collection program is where IRS revenue officers make in-person contact with noncompliant individuals and business officials to enforce tax return filing and payment requirements. Sound processes for selecting cases are critical to maintain taxpayer confidence in the tax system and use federal resources efficiently. GAO was asked to review the processes IRS uses to select collection cases for potential enforcement action.
This report (1) describes the Field Collection program's automated and manual processes for prioritizing and selecting cases and (2) assesses how well Field Collection case selection processes support the collection program's mission, including applying tax laws “with integrity and fairness to all.” To address these objectives, GAO reviewed IRS documents and conducted interviews with IRS officials knowledgeable about the case selection processes, including a series of focus groups with IRS Field Collection managers. GAO evaluated how well the processes adhere to relevant federal standards for internal control.

What GAO Found

The Internal Revenue Service (IRS) uses automated processes to prioritize cases to be potentially selected for in-person contact to resolve a tax collection issue (see figure), but group managers in the Field Collection program manually select the cases to assign to revenue officers. For example, when reviewing cases, group managers consider characteristics of the revenue officer available—such as current workload—and case characteristics—such as potential collectability—when deciding whether to assign a case.
GAO found weaknesses in the Field Collection program's internal controls for case selection, including:
Program objectives are not clearly defined and communicated. IRS has not sufficiently developed and communicated specific and measurable program objectives, including fairness. GAO heard different interpretations of program objectives and the role of fairness from focus group participants. Without clearly defined and clearly understood objectives aligned to its mission, Field Collection management does not have reasonable assurance that case selection processes support achievement of that mission. Further, the lack of clearly articulated objectives undercuts the effectiveness of Field Collection management's efforts to measure performance and assess risks.
Documentation and assessment of case selection risks are inadequate. The Field Collection program's automated prioritization and decision support systems are control procedures that may guide staff to reduce risks. However, the Field Collection program does not have documented procedures for periodically reviewing automated aspects of case selection. Further, the Field Collection program lacks sufficient guidance for group managers to exercise judgment in case selection. These deficiencies limit the Field Collection management's ability to provide reasonable assurance that selection decisions effectively support achievement of IRS's mission.

What GAO Recommends

GAO is making five recommendations, including that IRS: develop and document objectives in clear and measurable terms, including fairness; provide guidance for group managers' use of judgment in selecting cases; and develop procedures to assess automated and manual processes. IRS agreed with the recommendations and outlined planned steps to address them.