Tax Administration:

IRS' Problem-Solving Days

GGD-99-1: Published: Oct 16, 1998. Publicly Released: Nov 16, 1998.

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Pursuant to a congressional request, GAO reviewed the effectiveness of Internal Revenue Service's (IRS) problem-solving days (PSD), focusing on: (1) how the PSDs were organized and advertised and what IRS did to make them conducive to discussing and resolving taxpayers' ongoing tax problems; (2) taxpayers' overall satisfaction with the initiative and the extent to which taxpayers' problems were resolved; and (3) whether IRS identified any systemic problems or lessons learned and took subsequent actions on them.

GAO noted that: (1) IRS began monthly PSDs in November 1997 to assist taxpayers in getting their tax problems resolved; (2) to advertise the initiative, IRS used various means, including national and local newspapers, television, and radio; (3) taxpayers and practitioners were advised to call in advance to schedule appointments to discuss their tax problems with IRS staff; (4) some taxpayers who called in advance were able to get their problems resolved over the telephone; (5) for taxpayers who scheduled an appointment in advance, IRS was generally able to have information about the taxpayers' case available at the time of the appointment; (6) taxpayers who walked in without an appointment were generally afforded an opportunity to meet with IRS staff to discuss their tax problems; (7) during PSDs each participating IRS office was staffed with employees from various functional groups to provide a range of expertise and thus make the initiative conducive to discussing and resolving taxpayers' tax problems; (8) IRS' initial national PSD was held at each of its 33 district offices on November 15, 1997, and about 6,300 taxpayers attended; (9) a subsequent national PSD, held on May 16, 1998, was attended by about 2,500 taxpayers; (10) between November 1997 and July 1998, these events attracted more than 22,000 taxpayers; (11) IRS estimated that it incurred incremental costs of about $11.5 million through the end of July 1998; (12) GAO's survey of taxpayers attending the first PSD indicated that about 91 percent believed it was a good idea, even though only about 34 percent of taxpayers reported that their problems had been fully resolved by the time they responded to the questionnaire; (13) IRS surveys of taxpayers attending PSDs each month and a follow-up telephone survey conducted by IRS in April and May 1998 indicated a generally positive response to the initiative, noting that some indicated that IRS' effort to resolve problems could be improved; (14) IRS has identified four types of problems that taxpayers have sought to resolve on PSDs and have assembled task groups to review each: penalties, audit reconsiderations, installment agreements, and offers in compromise; (15) according to IRS officials who have studied the PSD initiative, an important lesson learned was that taxpayers with ongoing tax problems wanted to discuss them face to face with IRS staff to finally get their problems resolved; and (16) IRS is also studying ways to incorporate problem-solving lessons learned from the PSD initiative into its day-to-day operations.

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