	Background

TAS is an independent office within IRS created to assist taxpayers in  resolving problems with IRS, identify areas in which taxpayers have  problems in dealing with IRS, and propose administrative and legislative  changes to mitigate such problems. For  example, although CI was the largest issue in fiscal years 2005 and 2006, it  accounted for only 14 percent of cases in fiscal year 2005 and 8 percent in  fiscal year 2006. For example, the National Taxpayer Advocate’s 2007 Objectives  Report to Congress states that “The impact of the IRS’s substantial  increases in enforcement activities is evident in the corresponding  increase in TAS Taxpayer Delinquent Investigation, Levy, and Automated  Underreporter case receipts.” Data from TAS and IRS are consistent with  this argument, showing a correlation between increases in TAS’s caseload  and increases in IRS’s overall enforcement activities since fiscal year  2004. However, our analysis of TAS data does not support this. Furthermore, the changes made by TAS in January 2006  did not significantly affect TAS’s caseload given that the two added criteria  resulted in just over 500 of the approximately 244,000 cases received in  fiscal year 2006. However, its employee satisfaction survey suffers  from a declining response rate and TAS does not measure some important  dimensions of performance such as cost per case. TAS would  also need to adjust the number of cases closed for the complexity of the  cases and the quality of the work. TAS Is Piloting Process to Measure the Effectiveness of Systemic Advocacy

TAS is piloting a process to analyze a few systemic issues in depth to  assess progress in correcting underlying problems, but does not have a  process for measuring systemic advocacy effectiveness more broadly. TAS sent the recommendations included in the 2004 and 2005 annual  reports to IRS. Without measures of case advocacy efficiency and cost, TAS  management lacks information potentially useful for managing its case  advocacy staff and prioritizing its systemic advocacy efforts. Recommendations for Executive Action

We recommend that the National Taxpayer Advocate  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;    supplement the detailed information on specific systemic advocacy issues  currently being developed with a broad measure of the effectiveness of  systemic advocacy; and  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. To address this objective, we  reviewed the case advocacy process; TAS’s case acceptance criteria,  changes made to the criteria by TAS, and TAS guidance for applying the  criteria; the legal requirements for TAS’s case acceptance criteria; TAS  documents that included discussions of why their caseload was  increasing, and the fiscal years 2002–5 National Taxpayer Advocate’s  annual reports to Congress, hereafter referred to as the annual report. Our second objective was to determine how well TAS conducted its case  advocacy activities in terms of measures such as customer satisfaction and  quality. Our third objective was to determine how well TAS measures and reports  its systemic advocacy efforts.
Why GAO Did This Study

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.

What GAO Found

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.