	Scope and Methodology

To assess IRS’s performance in the five key filing season activities covered by this report, we reviewed and analyzed IRS documents and data, including workload and performance data; interviewed IRS officials about current operations, performance relative to 2001 performance and 2002 goals, and significant factors and initiatives that affected performance;   observed operations at three of the eight processing centers operated by IRS’s Wage and Investment Operating Division (W&I) and four of IRS’s approximately 470 walk-in locations;  observed a leadership conference and program review at one   analyzed information posted to IRS’s Web site, specifically assessing the ease of finding information on the site (i.e., navigation) and the accuracy and currency of data on the site (i.e., content); reviewed information from private firms that assessed various aspects of IRS's Web site; reviewed information from and interviewed representatives of various private organizations that prepare tax returns and participated in IRS and other conferences about their views on IRS’s 2002 operations and performance; and reviewed related congressional testimony and work performed by the Treasury Inspector General for Tax Administration (TIGTA). Background

IRS’s filing season activities encompass two critical areas—returns processing and taxpayer assistance. late-May   Deadline for issuing refunds on timely filed  returns without paying interest. IRS also took steps to obtain additional information on impediments to electronic filing. Telephone Service Improved Compared with Last Year

IRS’s performance measures showed that (1) telephone service was more accessible and accurate during the 2002 filing season than it was in 2001and (2) IRS met most of its 2002 performance goals. Although the sites’ control over these measures may be limited, they are an important component of any assessment of IRS’s telephone performance because they measure a key aspect of the customer experience—how long callers wait to speak to an assistor. However, the extent and timing of the workload changes are not clear, and field assistance does not have comprehensive plans that clearly relate that workload to resource needs. Number of Taxpayers Assisted Declined, but Field Assistance Staffing Has Increased

As shown in figure 5, the number of taxpayers assisted at IRS walk-in sites declined for the third consecutive filing season—from 6.1 million in 1999 to 4.9 million in 2002—a drop of about 20 percent. Conclusions

Generally, during the 2002 filing season, IRS processed returns and issued refunds smoothly, and the quality of assistance provided to taxpayers improved. In light of this performance, IRS should be commended for the various efforts it took to prepare for and improve performance during the filing season. IRS’s improved performance can be traced to its use of and emphasis on performance measures, illustrating the importance of good measures that effectively assess performance and enable improvements to be quantified.
Why GAO Did This Study

The tax filing season is when millions of taxpayers file their returns and seek assistance by calling or visiting IRS's offices or Web site. Because of the large number of returns and critical nature of IRS's filing season activities, GAO was asked to assess IRS's 2002 filing season performance in processing tax returns and refunds and providing timely and accurate assistance to taxpayers.

What GAO Found

The Internal Revenue Service (IRS) processed returns and issued refunds smoothly and the quality of assistance provided to taxpayers improved in the 2002 filing season. In light of this, IRS should be commended for the various efforts it took to prepare for the 2002 filing season and improve performance. Still, opportunities exist for IRS to further improve aspects of its performance and some of its performance measures. In 2002, IRS's performance included issuing almost all refunds on time, providing more accurate telephone service than in 2001, and meeting many of its 2002 performance goals in all areas. IRS also began measuring the accuracy of assistance at its walk-in sites to obtain better performance data. In addition, IRS's redesigned Web site was easier to access and more user friendly. IRS's improved performance can be traced to its use of performance measures, which are part of its strategy to improve returns processing and taxpayer assistance as shown below. However, GAO identified opportunities for IRS to make further improvements. For example, IRS's suite of telephone measures lacks an indicator of how long callers wait to speak to an assistor--a key aspect of assistance that provides useful information for decision making by external stakeholders. Although not a primary focus of this report, GAO also found that IRS lacked comprehensive plans related to the extent and timing of anticipated workload and staffing changes at its walk-in sites.