Tax Administration:

IRS's Innocent Spouse Program Performance Improved; Balanced Performance Measures Needed

GAO-02-558: Published: Apr 24, 2002. Publicly Released: May 16, 2002.

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By law, married persons who file joint tax returns are each fully responsible for the accuracy of the tax return and for the full tax liability. This is true even though only one taxpayer may have earned the wages or income shown on the tax return. Under the Internal Revenue Service's (IRS) Innocent Spousal Program, IRS can relieve taxpayers of tax debts on the basis of equity considerations, such as not knowing that their spouse failed to pay taxes due. Since passage of the IRS Restructuring and Reform Act of 1998, IRS has received thousands of requests from taxpayers for innocent spouse relief. IRS's inability to provide timely responses to such requests has generated concerns among taxpayers, Congress, and other stakeholders. IRS reached decisions on 21 percent more cases than it received in fiscal year 2001, reducing some of its backlog from previous years. The agency accomplished this through a variety of initiatives, including a substantial staffing commitment, centralization and specialization, automated tools, and routine estimating of future workload and staffing needs. IRS's procedures conform to applicable guidance for transferring tax liabilities from joint tax accounts to individual tax accounts when innocent spouse relief has been granted. The procedures follow federal internal control guidelines by requiring a mix of checks, verifications, reconciliations, and documentation to support steps throughout the process. The Web site for IRS's Innocent Spouse Program--part of IRS's agency wide Web site--went on-line in December 1999 to help taxpayers determine their eligibility for innocent spouse relief. Because IRS has not evaluated the Web site, the agency does not know how useful the Web site has been to taxpayers in determining their eligibility for innocent spouse relief.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Commissioner of the Internal Revenue Service (IRS) should establish balanced performance measures and targets for the Innocent Spouse Program.

    Agency Affected: Department of the Treasury: Internal Revenue Service

    Status: Closed - Implemented

    Comments: As of October 2005, IRS had completed baselining of cycle time and quality measures for its Innocent Spouse Program. As a result, IRS developed operational goals for processing times for different types of innocent spouse cases. In addition, IRS developed overall goals for timeliness, customer accuracy, and professional for fiscal years 2006 and 2007. IRS stated that it will continue to analyze data from a customer satisfaction survey to set customer satisfaction measures and targets for the program.

    Recommendation: The Commissioner of the IRS should evaluate the Innocent Spouse Program Web site's usefulness to taxpayers.

    Agency Affected: Department of the Treasury: Internal Revenue Service

    Status: Closed - Implemented

    Comments: The innocent spouse program's link on the Internal Revenue Service's (IRS) external web site has been updated and enhanced. Examples of updates include correcting the questions and answers to reflect current information and adding the "contact us" link on the innocent spouse program's link on the IRS web site to allow IRS the ability to capture comments on the web site's contents. According to the IRS, future enhancements are to be made to the innocent spouse program link on the web site, including when the innocent spouse program becomes part of Compliance.

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