IRS Personnel Administration:

Use of Enforcement Statistics in Employee Evaluations

GGD-99-11: Published: Nov 30, 1998. Publicly Released: Nov 30, 1998.

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Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) managers' compliance with legislative and policy prohibitions against using enforcement statistics in employee evaluations and the requirement that managers certify each quarter whether violations had occurred, focusing on: (1) the extent to which IRS' certification process identified violations of law and policy; (2) IRS employees' perceptions of the use of tax enforcement results in their annual performance evaluations; (3) supervisors' use of tax enforcement results in written employee performance evaluations; and (4) IRS' efforts to revise the certification process.

GAO noted that: (1) for fiscal years 1996 and 1997, district and service center directors submitted 368 quarterly certifications that reported 11 potential violations; (2) GAO identified several systemic weaknesses that affected the reliability of the certifications; (3) specifically, GAO found: (a) some confusion among IRS officials about what constituted a violation; (b) inadequate guidance about specific actions directors should take to identify violations; (c) a failure to integrate performance evaluations and the certification process; and (d) unclear guidance on sanctions that could be applied against managers for misusing tax enforcement results or submitting false certifications; (4) GAO's survey of a statistically representative sample of examination and collection employees showed a widespread perception that managers considered enforcement results when preparing annual performance evaluations; (5) GAO estimated that 75 percent of front-line employees and 81 percent of group managers perceived that tax enforcement results affected their most recent performance evaluation; (6) about 70 percent of front-line employees said they based their perception in part on information communicated to them verbally in staff meetings or performance feedback sessions with their managers; (7) and about 36 percent of front-line employees indicated tax enforcement results were used in their written performance evaluations; (8) 9 percent of employees received a written evaluation that contained a tax enforcement result and an estimated 69 percent contained narrative that employees could have interpreted as inappropriate references to tax enforcement results but which did not violate IRS guidance; (9) about 41 percent of the evaluations in GAO's sample mentioned process measures dealing with the age of the cases in the employee's workload inventory and the number of cases worked within guidelines established for closing cases; (10) IRS has undertaken several steps to strengthen the certification process; (11) although these actions address some of the weaknesses of the current system, IRS' revised guidance has few examples of the appropriate and inappropriate use of tax enforcement results in written evaluations; (12) the revised guidance does not clearly inform managers about potential sanctions for inappropriate use of tax enforcement results; and (13) IRS' new independent review process is geared toward identifying written violations and not violations communicated verbally.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: IRS surveyed employees' perceptions of the use of enforcement statistics in written evaluations and oral communications. The survey instrument was to be the IRS Corporate Climate Survey that was conducted in March 1999, and which will be conducted annually. The results of the survey were provided to the appropriate organizational unit to assess whether IRS needs to further clarify the guidance, provide additional training, or take any other appropriate action.

    Recommendation: To better ensure managerial accountability for the proper use of tax enforcement results, the Commissioner of Internal Revenue should survey employees periodically to determine whether they perceive that tax enforcement results were used in written evaluations or verbally communicated by their supervisors and use the results to assess whether IRS needs to further clarify the guidance, provide additional training, or take any other appropriate action.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: In June 2001, IRS revised its penalty guide to include the recommended list of disciplinary actions for violations of the use of statistics.

    Recommendation: To better ensure managerial accountability for the proper use of tax enforcement results, the Commissioner of Internal Revenue should revise the penalty guide to specifically list the disciplinary actions that can be taken for violations.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: IRS revised the quarterly certification form in December 1998, for use for the quarter ending in December 1998.

    Recommendation: To better ensure managerial accountability for the proper use of tax enforcement results, the Commissioner of Internal Revenue should revise the quarterly certification form to specifically state that tax enforcement results were not used in any written employee evaluation prepared or reviewed, including appraisals, awards, or promotion justifications, and that the manager did not verbally communicate to employees that tax enforcement results affected their evaluations or were used to set individual production goals or quotas.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed - Implemented

    Comments: IRS said that it included additional examples of the appropriate and inappropriate use of records of tax enforcement results in written evaluations in the revision of Internal Revenue Manual 105-4, Managing Statistics. It also incorporated the examples into the training provided to new managers.

    Recommendation: To better ensure managerial accountability for the proper use of tax enforcement results, the Commissioner of Internal Revenue should expand the guidance to include additional examples of the appropriate and inappropriate use of records of tax enforcement results in written evaluations.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  5. Status: Closed - Implemented

    Comments: IRS included in its revision of Internal Revenue Manual 105-4, Managing Statistics, examples of how coverage and cycle time data may be used appropriately.

    Recommendation: To avoid the potential inappropriate use of overage and cycle-time data, the Commissioner of Internal Revenue should either designate overage and cycle-time data as prohibited tax enforcement results or emphasize in official policies or procedures to front-line employees and managers how overage and cycle-time data may be used appropriately.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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