Internal Revenue Service:

Changes Needed in the Role of Regional Offices

GGD-94-160: Published: Jul 26, 1994. Publicly Released: Jul 26, 1994.

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Pursuant to a congressional request, GAO reviewed the role and responsibilities of the Internal Revenue Service's (IRS) regional offices, focusing on opportunities to make the regional offices more efficient.

GAO found that: (1) IRS needs regional offices to effectively manage its large, widespread organization and to insulate its field operations from political influences; (2) IRS regional offices have a crucial role in providing information on nonfilers and supervising field operations; (3) IRS regional offices also provide support to the field offices and resolve unclear IRS guidance; (4) IRS need for regional offices could be reduced if IRS significantly reduces the number of field offices or broadens its span of control through improved business practices or technological support; (5) IRS regional offices are not operating effectively or efficiently and customer satisfaction varies across IRS organizational levels; and (6) IRS needs to reassess the offices' roles and responsibilities by eliminating some of their unproductive activities and increasing oversight and support of other IRS activities.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: IRS has reduced the number of regional offices and revised their functional responsibilities. According to IRS officials, revisions are being made to the Internal Revenue Manual, which should provide specifics on the roles and responsibilities of the regional offices. These revisions have been delayed because of other higher priority revisions to the Manual. The regional office restructuring is part of a larger effort to restructure IRS' field office organization. IRS is focusing on completing its transition to a structure of 33 district offices from 63 district offices. GAO expects IRS to focus attention on this transition in the near term. Accordingly, GAO is closing this recommendation.

    Recommendation: The Commissioner of Internal Revenue should ensure that regional office roles and responsibilities are defined in a way that clearly supports field office needs and contributes to accomplishing the IRS mission. In defining those roles and responsibilities, IRS should allow field offices to exchange information directly with the National Office, when appropriate, rather than having to funnel everything through a regional office.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: IRS has reduced the number of regional offices and revised their functional responsibilities. According to IRS officials, revisions are being made to the Internal Revenue Manual, which should provide specifics on the roles and responsibilities of the regional offices. These revisions have been delayed because of other higher priority revisions to the Manual. The regional office restructuring is part of a larger effort to restructure IRS' field office organization. IRS is focusing on completing its transition to a structure of 33 district offices from 63 district offices. GAO expects IRS to focus attention on this transition in the near term. Accordingly, GAO is closing this recommendation.

    Recommendation: The Commissioner of Internal Revenue should ensure that regional office roles and responsibilities are defined in a way that clearly supports field office needs and contributes to accomplishing the IRS mission. In defining those roles and responsibilities, IRS should ensure that reviews done by regional offices do not duplicate those conducted by other offices and that the reviews focus on helping to solve problems.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: The Commissioner of Internal Revenue said that chain of command was considered when operations were consolidated as part of IRS' reinvention effort. Along those lines, IRS has since decided to have service centers and forms distribution centers report directly to the National Office. It may be several years before consolidation of customer service sites is completed. Considering the actions already taken by IRS, GAO is closing this recommendation as implemented.

    Recommendation: The Commissioner of Internal Revenue should ensure that regional office roles and responsibilities are defined in a way that clearly supports field office needs and contributes to accomplishing the IRS mission. In defining those roles and responsibilities, IRS should remove regional offices from the chain of command in those situations (e.g., returns processing, forms distribution sites, and telephone call sites once they are consolidated) where span of control is not an issue.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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