In response, the then Acting Commissioner of Internal Revenue announced that IRS would hold monthly PSDs in each of its 33 districts, beginning in November 1997. To determine taxpayers’ overall satisfaction with the initiative and the extent to which taxpayers’ problems were resolved, we obtained and reviewed available IRS statistics concerning the status of PSD cases in general and the specific results of closed PSD cases, as well as summary reports on the results of IRS’ monthly taxpayer surveys and a summary report on the results of IRS’ April and May 1998 taxpayer follow-up telephone survey. Taxpayers and practitioners were advised to call in advance to schedule appointments. In addition, some taxpayers who called IRS regarding a PSD were able to get their problems resolved over the telephone without visiting an IRS office. “Walk-ins” who attended a PSD without an appointment were also generally provided an opportunity to meet with IRS staff to discuss their tax problems. During PSDs, the participating offices we visited were generally staffed with IRS employees from various operating groups, such as Customer Service, Examination, and Collection, who had a wide range of expertise in various tax matters and were available to assist taxpayers, thus making the initiative conducive to discussing and resolving their ongoing tax problems. IRS’ initial national PSD, which was held at each of the 33 district offices on Saturday, November 15, 1997, was attended by about 6,300 taxpayers and received generally favorable press coverage and reactions from taxpayers. IRS’ district offices have also held additional monthly PSD events between November 1997 and July 1998. More than 22,000 taxpayers had attended PSDs through the end of July 1998. In particular, the results of our taxpayer survey showed that the vast majority of taxpayers who participated in the first PSD felt that (1) it was easy to schedule an appointment for this event, (2) they were treated courteously by IRS employees, and (3) they appreciated the opportunity to meet face to face with IRS staff to discuss their problems. Overall, about 91 percent of taxpayers believed that the PSD was a good idea. However, each month survey respondents indicated that IRS’ effort to resolve their problems could be improved. The net result was that an estimated 34 percent of these taxpayers felt that their problems had been fully resolved at the time of our survey. IRS Is Considering Ways to Institutionalize Lessons Learned During the PSD Initiative

IRS has conducted various studies related to the PSD initiative. According to IRS officials involved in this review, among the lessons learned from PSDs were that many taxpayers who attended did so because they wanted to discuss their ongoing tax problems face to face with IRS staff in an effort to finally get them resolved. In addition, IRS is studying ways to incorporate lessons learned from the PSDs into its day-to-day operations to better assist taxpayers in resolving their tax problems, by establishing procedures for providing taxpayers with appointments and for providing the necessary technical support. 105-206) (1) strengthens the role of the national Taxpayer Advocate by expanding the authority to assist taxpayers; (2) replaces the current problem resolution program with local taxpayer advocates reporting directly to the national Taxpayer Advocate; (3) requires the national Taxpayer Advocate to report annually to Congress, at least 20 of the most serious problems encountered by taxpayers and the actions taken by IRS concerning these problems; (4) requires IRS to publish the telephone numbers for each local office of the Taxpayer Advocate; and (5) requires IRS to publish a taxpayer’s right to contact the local Taxpayer Advocate on the statutory notice of deficiency, including the location and telephone number of the appropriate office.These changes, if effectively implemented, should be helpful to taxpayers. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Definition of the Main Problem Areas Identified During Problem-Solving Days

IRS has analyzed the types of problems that taxpayers have sought to resolve on problem-solving days since the beginning of the initiative and identified four main problem areas, including (1) penalties, (2) audit reconsiderations, (3) installment agreements, and (4) offers in compromise.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the effectiveness of Internal Revenue Service's (IRS) problem-solving days (PSD), focusing on: (1) how the PSDs were organized and advertised and what IRS did to make them conducive to discussing and resolving taxpayers' ongoing tax problems; (2) taxpayers' overall satisfaction with the initiative and the extent to which taxpayers' problems were resolved; and (3) whether IRS identified any systemic problems or lessons learned and took subsequent actions on them.

What GAO Found

GAO noted that: (1) IRS began monthly PSDs in November 1997 to assist taxpayers in getting their tax problems resolved; (2) to advertise the initiative, IRS used various means, including national and local newspapers, television, and radio; (3) taxpayers and practitioners were advised to call in advance to schedule appointments to discuss their tax problems with IRS staff; (4) some taxpayers who called in advance were able to get their problems resolved over the telephone; (5) for taxpayers who scheduled an appointment in advance, IRS was generally able to have information about the taxpayers' case available at the time of the appointment; (6) taxpayers who walked in without an appointment were generally afforded an opportunity to meet with IRS staff to discuss their tax problems; (7) during PSDs each participating IRS office was staffed with employees from various functional groups to provide a range of expertise and thus make the initiative conducive to discussing and resolving taxpayers' tax problems; (8) IRS' initial national PSD was held at each of its 33 district offices on November 15, 1997, and about 6,300 taxpayers attended; (9) a subsequent national PSD, held on May 16, 1998, was attended by about 2,500 taxpayers; (10) between November 1997 and July 1998, these events attracted more than 22,000 taxpayers; (11) IRS estimated that it incurred incremental costs of about $11.5 million through the end of July 1998; (12) GAO's survey of taxpayers attending the first PSD indicated that about 91 percent believed it was a good idea, even though only about 34 percent of taxpayers reported that their problems had been fully resolved by the time they responded to the questionnaire; (13) IRS surveys of taxpayers attending PSDs each month and a follow-up telephone survey conducted by IRS in April and May 1998 indicated a generally positive response to the initiative, noting that some indicated that IRS' effort to resolve problems could be improved; (14) IRS has identified four types of problems that taxpayers have sought to resolve on PSDs and have assembled task groups to review each: penalties, audit reconsiderations, installment agreements, and offers in compromise; (15) according to IRS officials who have studied the PSD initiative, an important lesson learned was that taxpayers with ongoing tax problems wanted to discuss them face to face with IRS staff to finally get their problems resolved; and (16) IRS is also studying ways to incorporate problem-solving lessons learned from the PSD initiative into its day-to-day operations.