Tax Policy and Administration:
IRS Restructuring Act Implementation
GGD-00-71R: Published: Feb 28, 2000. Publicly Released: Feb 28, 2000.
Pursuant to a congressional request, GAO provided information on the Internal Revenue Service's (IRS) efforts to implement provisions of the IRS Restructuring and Reform Act of 1998, focusing on: (1) what can be done to ensure that levies and seizures are done in accordance with the law; (2) IRS' balanced performance measurement system of evaluating employees; (3) the misuse of enforcement statistics in evaluating IRS employees; (4) the impact of information management systems deficiencies on IRS work and on taxpayers' rights; (5) IRS' implementation of the Restructuring Act taxpayer protections; (6) problems with IRS' sale and custody of seized property; and (7) what can be done to ensure that seizure authority is appropriately used.
GAO noted that: (1) IRS was expanding an automated field collection system to cover the seizure process, including plans for the computer generation of seizure forms; (2) programming could be done to prevent the generation of these forms, such as the form needed for seizure approval, if taxpayer protection requirements were not documented as "met"; (3) expanding the capabilities of this system to automate checks that process requirements were met would allow the managerial review to focus largely on judgmental areas, such as the adequacy of revenue officer contacts with taxpayers; (4) IRS' balanced performance measurement system is intended to ensure that IRS does not focus on revenue production at the expense of taxpayers' interests; (5) IRS is using three types of measures to assess how well it is meeting its overall mission to provide quality customer service and to enforce the tax law; (6) the three measures are: (a) customer satisfaction; (b) business results (quality and quantity data); and (c) employee satisfaction; (7) to date, the balanced performance measurement system has not been applied to employee evaluations; (8) IRS has made changes intended to prevent misuse of enforcement statistics; (9) at present, neither GAO nor IRS have evaluated the effectiveness of these changes; (10) IRS' information management systems difficulties hinder efforts to manage operations and better serve taxpayers; (11) these difficulties will continue until IRS successfully modernizes its information systems; (12) IRS has issued instructions, procedures, and regulations to implement the legal provisions of the Restructuring Act; (13) however, IRS has several years of work ahead to make the provisions work efficiently and effectively; and (14) to strengthen IRS' processes for ensuring that seizure authority is properly exercised, GAO made recommendations to: (a) strengthen IRS' processes for ensuring that seizure authority is appropriately exercised; (b) improve processes for controlling assets after seizure through implementation of federal financial management guidelines; (c) strengthen the sales process for ensuring that the highest prices are obtained from seized asset sales; and (d) strengthen oversight of seizure activities.