Figure 3 shows that a key indicator of taxpayer service, the level of  service (LOS)—defined as the percentage of people who want to speak  with an IRS assistor who were able to reach one—declined to about 38  percent in fiscal year 2015. Additionally, average wait times have  almost tripled from about 11 minutes to more than 30 minutes since fiscal  year 2010. IRS agreed with this  recommendation, but as of October 2015, had yet to implement it. We  also found that IRS’s taxpayer authentication tools have limitations. IRS Does Not Have Adequate Controls to Ensure Assistors Consistently Send Accurate Correspondence to Taxpayers

Since fiscal year 2010, IRS assistors achieved customer accuracy scores  of 85 percent or higher when working correspondence cases. However,  Treasury does not include correspondence overage rates as a  performance measure in its performance plan or annual financial report,  inhibiting its efforts to create a complete set of customer service  performance metrics for IRS. IRS has not yet developed a telephone measure benchmarked to the  best in business or customer expectations. Without defining a comprehensive  strategy with specific goals for customer service tied to the best in  business and customer expectations, Treasury and IRS are not effectively  conveying to Congress the types and levels of customer service expected  by taxpayers and the capabilities and resources IRS requires to achieve  those levels. In spite of these challenges, IRS  officials and tax preparation industry stakeholders reported relatively few  problems processing returns, which IRS attributed primarily to significant  advance planning. Matter for Congressional Consideration

To improve taxpayer service amid declining budgets and increased  responsibilities, Congress should consider requiring the Secretary of the  Treasury to develop a comprehensive customer service strategy in  consultation with the Commissioner of Internal Revenue that (1)  determines appropriate telephone and correspondence levels of service,  based on service provided by the best in business and customer  expectations; and (2) thoroughly assesses which services IRS can shift to  self-service options. Periodically conduct performance evaluations of IRS return  processing operations to identify inefficiencies. Treasury neither agreed nor disagreed with our recommendation to  update the Department’s performance plan to include correspondence  overage rates as a part of Treasury’s goals. Regarding our  recommendation to set up a control in IRS systems to require assistors to  send required correspondence before closing a case, IRS stated that it  would analyze its options for bolstering controls to address  correspondence concerns. Appendix I: Objectives, Scope, and Methodology

Our objectives in this report were to  1.  assess how well the Internal Revenue Service (IRS) provided  customer service compared to its performance in prior years and  identify opportunities for IRS to streamline services,  2.  assess how well IRS processed individual income tax returns  compared to its performance in prior years and identify opportunities  for IRS to streamline processing, and   3.  determine what resources IRS realized from implementing service  initiatives and describe IRS's progress toward implementing our prior  filing season-related recommendations. To answer the first and second objectives, we obtained and analyzed IRS documents and data, including  performance, budget, and workload data for return processing and  taxpayer services, and used this information to compare IRS’s  performance in 2015 to prior years (2010 through 2014) to identify  trends and anomalies; identified federal standards for evaluating customer service, such as  the Government Performance and Results Act Modernization Act and  executive orders, presidential memorandums and Office of  Management and Budget guidance to strengthen customer service,  and compared Department of the Treasury and IRS actions to those  standards;    visited IRS facilities in Austin to observe return processing and  assistors handling correspondence, and the Joint Operations Center  (which manages IRS’s telephone operations) in Atlanta to observe  assistors answering taxpayer calls and correspondence;   interviewed officials from IRS’s Wage and Investment division (which  is responsible for managing filing season operations) and external  stakeholders, including tax administration experts from major tax  preparation and software firms who interact with IRS on key aspects  of the filing season, to obtain contextual information about IRS’s  performance;  interviewed officials from the Department of the Treasury and IRS to  discuss goals and strategies to improve taxpayer services and steps  they have taken to measure performance in delivering such services;  conducted 10 discussion groups with IRS frontline staff and managers  located at five IRS campuses. 6.
Why GAO Did This Study

During tax filing season, IRS processes tax returns, issues refunds, and provides telephone, correspondence, online, and face-to-face services. GAO has reported that in recent years IRS has absorbed significant budget cuts and struggled to provide quality service. GAO was asked to report on the results of IRS's performance during the 2015 filing season. For this report, GAO assessed IRS's taxpayer service and individual income tax return processing. GAO also identified opportunities to streamline services and processes, among other issues.
GAO analyzed IRS documents and data, and observed operations at IRS processing and telephone sites. GAO compared IRS performance to prior years and its actions to federal standards for evaluating performance. GAO also interviewed IRS officials and external stakeholders, and conducted discussion groups with IRS frontline staff and managers.

What GAO Found

The Internal Revenue Service (IRS) provided the lowest level of telephone service during fiscal year 2015 compared to prior years, with only 38 percent of callers who wanted to speak with an IRS assistor able to reach one. This lower level of service occurred despite lower demand from callers seeking live assistance, which has fallen by 6 percent since 2010 to about 51 million callers in 2015. Over the same period, average wait times have almost tripled to over 30 minutes. IRS also struggled to answer correspondence in a timely manner and assistors increasingly either failed to send required correspondence to taxpayers or included inaccurate information in correspondence sent. IRS has taken steps to remind assistors to send correspondence, but does not have adequate controls to ensure that they send accurate correspondence before closing cases. GAO also found that the Department of the Treasury (Treasury) does not include correspondence performance goals in its performance plan, and therefore, does not have a complete set of measures to assess performance. The decline in service has coincided with a 10 percent reduction in IRS's annual appropriations, as well as resource allocation decisions by IRS to meet statutory responsibilities, such as implementing tax law changes and supporting information technology infrastructure.
More importantly, GAO found that Treasury and IRS have neither developed nor have any plans to develop a comprehensive customer service strategy to define appropriate service levels and benchmark to the best in business or customer expectations as GAO has previously recommended. Without such a strategy, Treasury and IRS can neither measure nor effectively communicate to Congress the types and levels of customer service taxpayers should expect, and the resources needed to reach those levels. Similarly, while IRS officials and stakeholders reported few problems with processing individual tax returns, GAO identified some inefficiencies related to tax processing, such as premature correspondence with taxpayers and inadequate training for frontline staff. These inefficiencies warrant further evaluation to determine if additional improvements are needed.

What GAO Recommends

Congress should consider requiring Treasury to develop a comprehensive customer service strategy in consultation with IRS. Treasury should update its performance plan to include goals for correspondence. IRS should assess the feasibility of a control to require assistors to send out required correspondence and evaluate return processing operations to identify inefficiencies.
Treasury neither agreed nor disagreed with GAO's recommendation to update its performance plan but said it would coordinate with IRS. IRS agreed with GAO's two other recommendations.