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entitled 'Tax Administration: Data on the Effects of the Economic 
Stimulus Program on the Internal Revenue Service's Telephone Service 
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Testimony: 

Before the Subcommittee on Oversight, Committee on Ways and Means, 
House of Representatives: 

United States Government Accountability Office:
GAO: 

For Release on Delivery: 
Expected at 10:00 p.m. EDT:
Thursday, June 19, 2008: 

Tax Administration: 

Data on the Effects of the Economic Stimulus Program on the Internal 
Revenue Service's Telephone Service and Costs: 

Statement for the Record by James R. White:
Director, Strategic Issues: 

GAO-08-916T: 

Mr. Chairman and Members of the Subcommittee: 

We appreciate this opportunity to provide information on the effects of 
the Economic Stimulus Act of 2008 on the Internal Revenue Service's 
(IRS) telephone service and costs. [Footnote 1]

As you know, the recent passage of this legislation created additional, 
unanticipated workload for IRS and required IRS to act quickly to deal 
with the public's questions and begin issuing payments. The public's 
questions cover a variety of issues. Millions of Americans who 
otherwise were not required to file a tax return are eligible for 
stimulus payments and must file a return to claim their payment. The 
amount of payment varies from household to household. The schedule for 
receiving payments depends on individual Social Security numbers, and 
how and when people filed. As part of our ongoing assessment of IRS's 
tax filing season performance, requested by this subcommittee and 
others, we have been monitoring IRS's implementation of the economic 
stimulus legislation. Because of its importance, you requested that we 
provide information on the effects of the economic stimulus legislation 
on the public's ability to get questions answered by IRS and IRS's 
estimates of the costs of implementing the legislation. 

To meet these objectives, we drew upon and updated recently issued 
products.[Footnote 2] We conducted the current performance audit from 
April 2008 through June 2008 in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We did not assess the quality of IRS's cost estimate for foregone 
revenue, but in our April 16, 2008, testimony we described how IRS 
developed the estimate. For a more detailed discussion of our scope and 
methodology, see the appropriate sections in the cited products. 

In summary, we make the following two points: 

* Demand for telephone assistance related to the economic stimulus 
legislation has been unprecedented, according to IRS. For the week 
ending May 24, volume was almost six times greater than the same week 
last year. Despite reallocating staff from collections work to 
answering stimulus-related calls, the percent of callers waiting to 
speak with an assistor who got through has declined markedly to 39 
percent for the week ending May 24 compared to 80 percent for the same 
week last year. 

* The costs for implementing the economic stimulus legislation may be 
up to $862 million. IRS received a supplemental appropriation of $202 
million for implementing the economic stimulus legislation. The Social 
Security Administration received a supplemental of $31 million and the 
Financial Management Service received a supplemental of $64 million. 
The reallocation of hundreds of IRS collections staff to answering 
taxpayer telephone calls will also result in up to $565 million in 
foregone enforcement revenue, according to IRS estimates. These costs 
are in addition to the significant reduction in IRS's telephone 
service. 

Please refer to appendix I for information that provides details on 
IRS's telephone service and costs of implementation. 

Agency Comments: 

IRS officials provided technical comments for this statement and we 
made changes where appropriate. 

Contacts and Acknowledgments: 

For further information regarding this testimony, please contact James 
R. White, Director, Strategic Issues, on (202) 512-9110 or 
whitej@gao.gov. Contact points for our offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
statement. Individuals making key contributions to this testimony 
include Joanna Stamatiades, Assistant Director; Shea Bader; Julia Jebo; 
Cheryl M. Peterson; and Neil A. Pinney. 

[End of section] 

Appendix I: Data on the Effects of the Economic Stimulus Program: 

Table 1: IRS Call Volume and Telephone Performance: 

Call volume (millions): Assistor calls answered; 
Cumulative totals (Jan. 1-May 24) 2008: 21.91; 
Cumulative totals (Jan. 1-May 24) 2007: 18.33; 
Weekly totals (May 18-24) 2008: 1.13; 
Weekly totals (May 18-24) 2007: 0.69. 

Call volume (millions): Automated calls completed; 
Cumulative totals (Jan. 1-May 24) 2008: 21.40; 
Cumulative totals (Jan. 1-May 24) 2007: 10.26; 
Weekly totals (May 18-24) 2008: 2.28; 
Weekly totals (May 18-24) 2007: 0.18. 

Call volume (millions): IRS disconnects or busy; 
Cumulative totals (Jan. 1-May 24) 2008: 8.67; 
Cumulative totals (Jan. 1-May 24) 2007: 1.02; 
Weekly totals (May 18-24) 2008: 1.61; 
Weekly totals (May 18-24) 2007: 0.04. 

Call volume (millions): Caller abandons; 
Cumulative totals (Jan. 1-May 24) 2008: 23.14; 
Cumulative totals (Jan. 1-May 24) 2007: 11.22; 
Weekly totals (May 18-24) 2008: 2.47; 
Weekly totals (May 18-24) 2007: 0.39. 

Telephone performance: Percent of callers waiting for an assistor who 
got through; 
Cumulative totals (Jan. 1-May 24) 2008: 63.03; 
Cumulative totals (Jan. 1-May 24) 2007: 82.37; 
Weekly totals (May 18-24) 2008: 38.82; 
Weekly totals (May 18-24) 2007: 80.12. 

Telephone performance: Average wait time (minutes); 
Cumulative totals (Jan. 1-May 24) 2008: 7.1; 
Cumulative totals (Jan. 1-May 24) 2007: 4.2; 
Weekly totals (May 18-24) 2008: 12.3; 
Weekly totals (May 18-24) 2007: 4.9. 

Source: GAO analysis of IRS data. Notes: IRS set up a dedicated 
stimulus hotline and gets stimulus calls on other lines too. As of May 
28, 2008, IRS has processed 65 million payments for $56 billion. 

[End of table] 

Figure 1: IRS Toll-free Calls and Percent of Callers Waiting for an 
Assistor Who Got Through (January through May 2008): 

[See PDF for image] 

This figure is a combination line and stacked vertical bar graph, 
depicting the following data [weekly calls on IRS's individual tax 
information lines (millions)]: 

Week ending: January 5; 
Assistor calls answered: 0.33 million; 
Automated calls completed: 0.05 million; 
IRS disconnects or busy: 0.03 million; 
Caller abandons: 0.17 million; 
Percent of callers waiting for an assistor who got through: 77. 

Week ending: January 12; 
Assistor calls answered: 0.57 million; 
Automated calls completed: 0.12 million; 
IRS disconnects or busy: 0.01 million; 
Caller abandons: 0.26 million; 
Percent of callers waiting for an assistor who got through: 85. 

Week ending: January 19; 
Assistor calls answered: 0.7 million; 
Automated calls completed: 0.45 million; 
IRS disconnects or busy: 0.02 million; 
Caller abandons: 0.37 million; 
Percent of callers waiting for an assistor who got through: 86. 

Week ending: January 26; 
Assistor calls answered: 0.7 million; 
Automated calls completed: 0.95 million; 
IRS disconnects or busy: 0.02 million; 
Caller abandons: 0.45 million; 
Percent of callers waiting for an assistor who got through: 84. 

Week ending: February 2; 
Assistor calls answered: 1.01 million; 
Automated calls completed: 1.38 million; 
IRS disconnects or busy: 0.05 million; 
Caller abandons: 0.72 million; 
Percent of callers waiting for an assistor who got through: 82. 
				
Week ending: February 9; 
Assistor calls answered: 1.06 million; 
Automated calls completed: 1.95 million; 
IRS disconnects or busy: 0.05 million; 
Caller abandons: 0.87 million; 
Percent of callers waiting for an assistor who got through: 80. 

Week ending: February 16; 
Assistor calls answered: 1.07 million; 
Automated calls completed: 2.08 million; 
IRS disconnects or busy: 0.05 million; 
Caller abandons: 0.79 million; 
Percent of callers waiting for an assistor who got through: 82. 

Week ending: February 23; 
Assistor calls answered: 0.85 million; 
Automated calls completed: 2.11 million; 
IRS disconnects or busy: 0.17 million; 
Caller abandons: 1.1 million; 
Percent of callers waiting for an assistor who got through: 60. 

Week ending: March 1; 
Assistor calls answered: 1.13 million; 
Automated calls completed: 1.79 million; 
IRS disconnects or busy: 0.06 million; 
Caller abandons: 0.78 million; 
Percent of callers waiting for an assistor who got through: 81. 

Week ending: March 8; 
Assistor calls answered: 1.02 million; 
Automated calls completed: 1.49 million; 
IRS disconnects or busy: 0.03 million; 
Caller abandons: 0.65 million; 
Percent of callers waiting for an assistor who got through: 83. 

Week ending: March 15; 
Assistor calls answered: 1.08 million; 
Automated calls completed: 1.36 million; 
IRS disconnects or busy: 0.03 million; 
Caller abandons: 0.65 million; 
Percent of callers waiting for an assistor who got through: 84. 

Week ending: March 22; 
Assistor calls answered: 1.15 million; 
Automated calls completed: 1.13 million; 
IRS disconnects or busy: 0.03 million; 
Caller abandons: 0.7 million; 
Percent of callers waiting for an assistor who got through: 84. 

Week ending: March 29; 
Assistor calls answered: 1.43 million; 
Automated calls completed: 1.24 million; 
IRS disconnects or busy: 0.04 million; 
Caller abandons: 1.04 million; 
Percent of callers waiting for an assistor who got through: 77. 

Week ending: April 5; 
Assistor calls answered: 1.32 million; 
Automated calls completed: 0.98 million; 
IRS disconnects or busy: 0.04 million; 
Caller abandons: 0.91 million; 
Percent of callers waiting for an assistor who got through: 78. 

Week ending: April 12; 
Assistor calls answered: 1.4 million; 
Automated calls completed: 0.94 million; 
IRS disconnects or busy: 0.06 million; 
Caller abandons: 0.88 million; 
Percent of callers waiting for an assistor who got through: 80. 

Week ending: April 19; 
Assistor calls answered: 1.26 million; 
Automated calls completed: 1.09 million; 
IRS disconnects or busy: 0.49 million; 
Caller abandons: 1.3 million; 
Percent of callers waiting for an assistor who got through: 56. 

Week ending: April 26; 
Assistor calls answered: 0.98 million; 
Automated calls completed: 0.95 million; 
IRS disconnects or busy: 0.04 million; 
Caller abandons: 0.7 million; 
Percent of callers waiting for an assistor who got through: 78. 

Week ending: May 3; 
Assistor calls answered: 1.29 million; 
Automated calls completed: 2.11 million; 
IRS disconnects or busy: 0.34 million; 
Caller abandons: 1.83 million; 
Percent of callers waiting for an assistor who got through: 56. 

Week ending: May 10; 
Assistor calls answered: 1.19 million; 
Automated calls completed: 3.41 million; 
IRS disconnects or busy: 2.49 million; 
Caller abandons: 2.9 million; 
Percent of callers waiting for an assistor who got through: 32. 

Week ending: May 17; 
Assistor calls answered: 1.23 million; 
Automated calls completed: 3.67 million; 
IRS disconnects or busy: 3 million; 
Caller abandons: 3.6 million; 
Percent of callers waiting for an assistor who got through: 32. 

Week ending: May 24; 
Assistor calls answered: 1.13 million; 
Automated calls completed: 2.84 million; 
IRS disconnects or busy: 1.61 million; 
Caller abandons: 2.46 million; 
Percent of callers waiting for an assistor who got through: 39. 

Source: GAO analysis of IRS data. 

[End of figure] 

Table 2: Costs of Implementing the Economic Stimulus Package: 

Supplemental appropriation: IRS (e.g., postage, technology support, and 
printing); 
Dollars in millions: $202. 

Supplemental appropriation: Social Security Administration and 
Financial Management Service; 
Dollars in millions: $95. 

IRS estimates of foregone revenue from reallocating collections staff; 
Dollars in millions: Up to $565. 

Total; 
Dollars in millions: Up to $862. 

Taxpayers' Costs; 
Dollars in millions: Reduced access to IRS's telephone assistors (see 
above). 

Source: GAO analysis of IRS data. 

[End of table] 

[End of section] 

Footnotes: 

[1] Pub. L. No. 110-185 (2008).

[2] GAO, Internal Revenue Service: Assessment of the Fiscal Year 2009 
Budget Request, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-
620T] (Washington, D.C.: Apr. 16, 2008), and GAO, Internal Revenue 
Service: Fiscal Year 2009 Budget Request and Interim Performance 
Results of IRS's 2008 Tax Filing Season, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-08-567] (Washington, D.C.: Mar. 
13, 2008). 

[End of section] 

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