	Background

		Return Processing and Other Services

During the tax filing season, IRS processes paper and electronically filed  (e-filed) tax returns and validates key pieces of information, such as a  taxpayer’s name and social security number. Despite Decreases in Call Volume and Continued Success Shifting Calls to Automated Services, Access to Live Assistors Remained Low and Wait Times Remained High Compared to Prior Years

Between fiscal years 2009 and 2014, as shown in figure 2,
Call volume to IRS’s taxpayer service lines varied, and was the lowest  in 2014. Figure 2 illustrates aspects of IRS telephone service. In recent years, the type of telephone calls IRS receives and answers has  changed. IRS May Be Missing Opportunities to Improve Telephone Service by Not Systematically Comparing Its Telephone Service to the Best in the Business

Comparing performance data on calls answered by IRS assistors to the  best in the business can help IRS understand taxpayer needs and  improve service. In addition, Executive Order 12862,  Setting Customer Service Standards, requires that all executive  departments and agencies that “provide significant services directly to the  public shall provide those services in a manner that seeks to meet the  customer service standard established” which is “equal to the best in  business.” Most recently, Executive Order 13571, Streamlining Service  Delivery and Improving Customer Service, was issued to strengthen  customer service and required agencies to develop and publish a  customer service plan, in consultation with the Office of Management and  Budget (OMB). By not comparing customer service performance against the best in the  business, IRS is missing an opportunity to identify and address gaps in  actual and desired service and inform Congress about resources needed  to improve the level of service provided to taxpayers. While IRS collected some data that it could use to evaluate effectiveness,  it did not develop plans to analyze the data or track it in a way that would  allow officials to draw causal connections and develop valid conclusions  about the effectiveness of its 2014 service changes (see appendix VII for  an assessment against our criteria and appendix VIII for our analysis of  IRS’s service changes). Without such information, it will be difficult for Congress, IRS  management, and others to understand the benefits and potential budget  trade-offs associated with IRS’s service changes. This is important  because IRS has identified additional ones for 2015 and beyond. IRS Used its New Enterprise Risk Management Process to Identify Major Risks for the 2015 Filing Season, but Management Plans Lack Specificity

According to the Commissioner of Internal Revenue, implementation of  new tax laws such as PPACA combined with a tight budget and the  possibility of Congress passing a late package of tax extenders threatens  to make 2015 “the most complicated filing season before us in a long  time, if ever.” At the enterprise level, in February 2014, IRS undertook a new approach to risk management in response to management failures  related to applications for tax exempt status. The top two risks IRS identified were (1) staffing and training  and (2) budget sufficiency. As table 2 shows, IRS has made good progress in setting up its risk  management process. While IRS has taken some steps to  improve telephone service, it has not systematically and periodically  compared its service to the best in business. We disagree that IRS’s telephone  operations cannot be compared to others. IRS did not state whether it agreed or disagreed with our  recommendation to include specific countermeasures in its risk  management plans. Without countermeasures  specifically articulated in risk management plans, IRS’s ability to  respond quickly and appropriately to an adverse event may be  hampered. Therefore, we believe IRS should implement our  recommendation and include specific countermeasures in its risk  management plans. IRS had some data that it could have used to assess  the effectiveness of its 2014 service changes. These reports included 20 recommendations for  IRS to improve filing season operations, become more efficient, and  provide taxpayers with better customer service.
Why GAO Did This Study

During the filing season, IRS processes tax returns, issues refunds, and provides telephone, correspondence, online, and face-to-face service. GAO has reported that in recent years IRS has absorbed significant budget cuts and struggled to provide quality service. In response, IRS has taken steps, including eliminating some services and implementing a new risk management process. GAO assessed IRS's (1) 2014 filing season performance, including how it compares itself to best practices; (2) efforts to evaluate the effectiveness of 2014 service changes; and (3) actions to manage risk for filing season operations, among other objectives. GAO analyzed IRS documents and data, visited IRS facilities, and interviewed IRS officials and external stakeholders.

What GAO Found

The Internal Revenue Service's (IRS) processing of tax returns was timely, even though the filing season was delayed due to the 2013 government shutdown. Continued growth in e-filing allows IRS to reduce costs and issue refunds faster. Although IRS received fewer calls in 2014, the percentage of callers seeking help who received it remained low and wait times remained high compared to prior years.
One way to improve taxpayer telephone service is to compare it to the best in business, as required by Congress and executive orders. However, IRS has not systematically made such a comparison for its telephone service because of budget constraints and difficulty in identifying comparable organizations, according to IRS officials. By not comparing itself to other call center operations, IRS is missing an opportunity to identify and address gaps between actual and desired service, and inform Congress about resources needed to close the gap. More efficient telephone service could help improve correspondence service because the same staff provides those services.
IRS did not set numerical goals—such as a reduction in wait time—or develop a plan to assess the effects of its 2014 service changes. Such information would help Congress, IRS managers, and others understand the benefits and potential budget tradeoffs associated with IRS service changes. This is important because IRS has identified additional service changes for 2015 and beyond.
IRS used its new enterprise-wide risk management approach to identify risks such as staffing and training. IRS has made good progress in setting up its risk management process. However, while risks were identified and countermeasures discussed, such as contingency plans and workload adjustments, most countermeasures were not specific. Without specific countermeasures identified in advance, IRS's ability to respond to adverse events may be hampered.

What GAO Recommends

GAO recommends IRS systematically compare telephone service to the best in business, develop measures and a plan to analyze service changes, and include specific countermeasures in risk management plans.
IRS disagreed with comparing its telephone service to the best in business stating it (1) is not comparable to other organizations and (2) has done targeted comparisons. GAO disagrees. In its view, the recommendation remains valid and benchmarking all aspects of service to the best in business could help IRS improve its service. IRS agreed to develop measures and a plan to analyze service changes. It neither agreed nor disagreed to include specific countermeasures in its risk management plans.