Tax Administration:

Tracking Taxpayer Information About IRS Notices Could Reduce Burden

GGD-00-54: Published: Mar 28, 2000. Publicly Released: Mar 28, 2000.

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Pursuant to a congressional request, GAO provided information on the Internal Revenue Service's (IRS) efforts to track taxpayer information about IRS notices, focusing on: (1) whether IRS tracks information about notices from individual taxpayers who call IRS; and (2) if not, whether such a tracking system could be useful and feasible.

GAO noted that: (1) IRS does not track information during telephone calls from taxpayers about notices; (2) such information could include the number of calls generated about each notice or the problems cited during the calls; (3) instead, IRS identifies problem notices through ad hoc discussions with IRS employees who have interacted with taxpayers; (4) IRS officials said that it has not developed a tracking system because its higher priority is modernizing IRS' computer systems and stabilizing its existing systems as it modernizes; (5) IRS officials said that a tracking system could be useful in improving notices; (6) they said that the degree of usefulness would depend on the information tracked; (7) the literature GAO reviewed and three other tax agencies GAO visited reported that collecting such information from customers was useful in identifying problems; (8) IRS officials believed it would be feasible to track some information about notices during telephone calls; (9) these officials identified at least three existing systems that could be modified to track information, such as the type of notice and problems associated with the notice; (10) these systems included one that helps IRS assistors handle all calls, a quality review system for a sample of calls, and a system used to survey a sample of callers about their satisfaction with IRS' services; (11) IRS officials also identified planned systems that could be enhanced to track notice information; (12) the cost of tracking information from taxpayers about notices is also an important factor in deciding whether such a tracking system is economically feasible; (13) costs would include those to modify an existing system and to enhance computer systems that are to be developed over the next 5 to 7 years so that they collect the information about notices; (14) the amount of additional cost incurred to collect the information would depend on the number of calls involved in the tracking, the amount of information collected, and the extent to which extra time is spent on such calls; (15) IRS officials raised two concerns with modifying an existing system for the purpose of tracking in the short term; (16) the officials said that major modifications to an existing system could create instability in that system causing other problems; and (17) the officials were concerned that spending significant resources to modify any existing system could disrupt IRS' computer modernization effort.

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: To help IRS' efforts to improve notices, the Commissioner of Internal Revenue should direct responsible staff to explore, as soon as possible, the cost-effectiveness of tracking information from taxpayers who call about notices by modifying one of IRS' existing systems in the short term. IRS also should explore the cost-effectiveness of doing such tracking by enhancing one of the planned systems being developed as part of IRS' long-term modernization effort.

    Agency Affected: Department of the Treasury: Internal Revenue Service

    Status: Closed - Implemented

    Comments: The IRS considered and explored the cost effectiveness of certain existing systems. On the basis of this, the IRS began tracking taxpayers' feedback about notices during spring 2000. The IRS is using its quality review system (as discussed in the report) to track the feedback over the short term. GAO has received documentation to verify this tracking.

    Recommendation: In determining the cost-effectiveness of doing the tracking through both the existing and planned systems, IRS should consider the gains to customer service from improving the notices and the impacts on other IRS systems and priorities. To the extent that cost-effectiveness is determined for these existing and planned systems, IRS should make the modifications and the enhancements as soon as possible.

    Agency Affected: Department of the Treasury: Internal Revenue Service

    Status: Closed - Implemented

    Comments: In April 2000, the Quality Review Database (QRDB) was modified to allow collecting information on taxpayer calls on notices using a statistically valid sample. The IRS decided that the QRDB was the best of the three systems and that the other two could work in conjunction with the QRDB. The completion date for the planned systems and the IRS analyses of notice feedback is targeted to the implementation of the modernization systems, which is estimated to be December 15, 2005. The IRS had been considering using/enhancing CRM, CADE, and CDDI as well as the already modified QRDB, which was enhanced and incorporated into the EQRS (Embedded Quality Review System) by January 2005. Since then, the IRS has stopped developing these other systems, leaving the EQRS as the remaining alternative for doing the tracking over the long term. As of September 2005, the IRS was still considering whether to continue using EQRS and hoped to make a decision before the end of 2005. During October 2005, IRS provided documentation on its decision to continue to use the EQRS to track notice feedback for a statistical sample. The IRS believes this approach is better than any of the other options, including the initial version of the QRDB.

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