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GAO-14-534R: 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

April 21, 2014: 

The Honorable Ron Wyden: 
Chairman: 
The Honorable Orrin Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Tom Udall: 
Chairman: 
The Honorable Mike Johanns: 
Ranking Member: 
Subcommittee on Financial Services and General Government: 
Committee on Appropriations: 
United States Senate: 

The Honorable Charles W. Boustany, Jr.
Chairman: 
The Honorable John Lewis: 
Ranking Member: 
Subcommittee on Oversight: 
Committee on Ways and Means: 
House of Representatives: 

Internal Revenue Service: Absorbing Budget Cuts Has Resulted in 
Significant Staffing Declines and Uneven Performance: 

This letter transmits briefing slides based on our work to date in 
response to your requests for information on our ongoing reviews of 
the 2014 tax filing season and fiscal year 2015 budget request for the 
Internal Revenue Service (IRS). See the enclosured briefing slides 
that include the information used to brief your staff on April 10, 
2014. We subsequently updated the briefing slides to reflect more 
current information.

Our briefing objectives were to (1) analyze IRS funding, staffing, and 
performance trends for fiscal years 2009 through 2014, including an 
assessment of IRS's 2014 filing season to date; (2) describe IRS's 
fiscal year 2015 budget request and workload; and (3) describe IRS's 
actions to absorb budget cuts and cite opportunities that could help 
IRS more strategically manage operations.

To conduct this work, we analyzed funding, staffing, and performance 
trends, including the 2014 filing season to date, and summarized the 
President's budget requests for IRS from fiscal years 2009 through 
2014. We analyzed the fiscal year 2015 justification and other IRS 
data, including performance data for key IRS operations and full-time 
equivalents (FTE) for priority programs. We reviewed our prior work 
and interviewed IRS officials in the Office of the Chief Financial 
Officer and the Information Technology organization, the National 
Taxpayer Advocate, and representatives from tax preparation firms.

We conducted this performance audit from January to April 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. We interviewed 
IRS officials and determined that the data presented in this report 
were sufficiently reliable for our purposes.

In summary, we found: 

* IRS's appropriations have declined to below fiscal year 2009 levels 
and FTEs have been reduced by about 8,000 since fiscal year 2009. 
Planned performance in enforcement and taxpayer service has decreased 
or fluctuated; for example, in the fiscal year 2014 congressional 
justification the audit coverage target for individual examinations 
was 1.0 percent for fiscal year 2014, however, the target was lowered 
to 0.8 percent in the fiscal year 2015 congressional justification. 
Amidst lower demand, IRS's telephone level of service performance (the 
percentage of callers seeking live assistance and receiving it) was 73 
percent from January 1 through March 15, 2014 compared to 69 percent 
during the same period last year. However, between fiscal years 2009 
and 2013, IRS's telephone level of service fluctuated between 61 
percent and 74 percent. Average wait times have almost doubled since 
fiscal year 2009--from 8.8 minutes to 16.8 minutes as of mid-March 2014.

* Not including other budgetary resources such as user fees, the 
fiscal year 2015 budget request for IRS is $12.5 billion, which is an 
increase of 10.5 percent ($1.2 billion) in funding and 8.3 percent in 
staffing (6,998 FTEs) over fiscal year 2014. According to the 
President's budget, of the requested $1.2 billion, $480 million is 
predicated on a cap adjustment--funding above the discretionary 
spending limit--and largely covers enforcement and infrastructure 
initiatives. IRS's workload has increased as a result of legislative 
mandates and priority programs, such as work related to the Patient 
Protection and Affordable Care Act and identity theft.

* IRS has absorbed approximately $900 million in budget cuts since 
fiscal year 2010 through savings and efficiencies and by reducing, 
delaying, or eliminating services. For example, IRS delayed two 
information technology projects (Information Reporting and Document 
Matching and Return Review Program) and substantially reduced employee 
training. To help improve operations, the President requested a large 
budget increase for IRS in fiscal year 2015. However, additional 
funding is not the only solution. We have open recommendations on 
IRS's operations that may help it achieve efficiencies over time, such 
as developing a long-term plan to improve web services.

Agency Comments: 

On April 16, 2014, IRS provided technical comments on our findings, 
which we have incorporated where appropriate.

We plan to send copies of this report to the Chairman and Ranking 
Members of other Senate and House committees and subcommittees that 
have appropriation, authorization, and oversight responsibilities for 
IRS. We are also sending copies to the Commissioner of Internal 
Revenue, the Secretary of the Treasury, and the Chairman of the IRS 
Oversight Board. The report is available at no charge on the GAO 
website at [hyperlink, http://www.gao.gov].

If you or your staffs have any questions about this report, please 
contact us at (202) 512-9110 or mctiguej@gao.gov or whitej@gao.gov. 
Contact points for our offices of Congressional Relations and Public 
Affairs are on the last page of this report. GAO staff members who 
made major contributions to this report were Libby Mixon, Assistant 
Director, and Joanna Stamatiades, Assistant Director, and Jehan Chase, 
Pawnee A. Davis, Mary Evans, Charles Fox, Suzanne Heimbach, LaKeshia 
Allen Horner, Natalie Maddox, Paul Middleton, Ed Nannenhorn, Sabine 
Paul, Amy Radovich, Mark Ryan, Erinn L. Sauer, Cynthia Saunders, and 
Tamara Stenzel. 

Signed by: 

James R. McTigue, Jr. 
Director, Tax Issues: 
Strategic Issues: 

Signed by: 

James R. White: 
Director, Tax Issues: 
Strategic Issues: 

Enclosure - 1: 

[End of section]

Enclosure: Briefing Slides: 

Internal Revenue Service: Absorbing Budget Cuts Has Resulted in 
Significant Staffing Declines and Uneven Performance: 

Prepared for Congressional Committees: 
April 10, 2014: 

(Updated April 18, 2014): 

Objectives: 

Our objectives are to provide interim information on the Internal 
Review Service's (IRS) fiscal year 2015 budget request and its 2014 
filing season performance. This briefing:

* analyzes IRS funding, staffing, and performance trends for fiscal 
years 2009 through 2014, including an assessment of IRS's 2014 filing 
season to date; 

* describes IRS's fiscal year 2015 budget request and workload; and; 

* describes IRS's actions to absorb budget cuts and cites 
opportunities that could help IRS more strategically manage operations. 

Scope and Methodology: 

To analyze funding, staffing, and performance trends, including the 
2014 filing season, we summarized the President's budgets and IRS's 
congressional justifications (CJ) from fiscal years 2009 through 2014, 
and interviewed IRS officials in the Office of the Chief Financial 
Officer (CFO); analyzed IRS data including full-time equivalents (FTE) 
and performance data for key IRS operations; and interviewed IRS 
officials and other stakeholders such as representatives from tax 
preparation firms on filing season performance and challenges. 

To describe IRS's fiscal year 2015 budget request and workloads, we 
reviewed the fiscal year 2015 CJ and other budget documents; analyzed 
FTE data on IRS identified priority programs; and interviewed 
officials from IRS's Offices of Corporate Budget and the National 
Taxpayer Advocate. 

To describe IRS's actions to absorb budget cuts and cite opportunities 
for IRS to more strategically manage operations, we reviewed Office of 
Management and Budget (OMB) and Department of Treasury guidance on 
sequestration; interviewed officials from IRS's Office of the CFO and 
Information Technology organization; andreviewed our prior work. 

We conducted this performance audit from January to April 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We interviewed 
IRS officials and determined that the data presented in this briefing 
were sufficiently reliable for our purposes. 

Results in Brief: 

IRS's appropriations have declined to below fiscal year 2009 levels. 
IRS FTEs have been reduced by about 8,000 FTEs since fiscal year 2009. 
Performance in enforcement and taxpayer service has decreased or 
fluctuated. IRS is providing a better level of telephone service in 
2014 amidst lower demand. 

Not including other budgetary resources such as user fees, the fiscal 
year 2015 budget request for IRS is $12.5 billion, which is an 
increase of 10.5 percent ($1.2 billion) in funding and 8.3 percent in 
staffing (6,998 FTEs) over fiscal year 2014. IRS's workload is 
dedicated to legislative mandates and priority programs. 

IRS has absorbed budget cuts through savings and efficiencies and by 
reducing, delaying, and eliminating some services. To improve 
operations, IRS has requested a large budget increase for 2015. 
However, additional funding is not the only solution for IRS.We have 
open recommendations that may help IRS to more effectively manage its 
operations and achieve some savings over time. 

Funding Trends: IRS's Appropriations Have Declined to Below Fiscal 
Year 2009 Levels: 

Figure 1: IRS's Appropriations, Fiscal Years 2009 through 2014: 

[Refer to PDF for image: vertical bar and line graph] 

IRS presents its budget request through four appropriation accounts: 
Enforcement, Operations Support, Business Systems Modernization (BSM), 
and Taxpayer Services. 
 
Fiscal year: 2009; 
Enforcement: $5,117; 
Operations Support and Business Systems: $4,097; 
Modernization (combined) Taxpayer Services: $2,293; 
IRS Appropriations: $11.523 billion. 

Fiscal year: 2010; 
Enforcement: $5,504; 
Operations Support and Business Systems: $4,348; 
Modernization (combined) Taxpayer Services: $2,279; 
IRS Appropriations: $12.146 billion. 

Fiscal year: 2011; 
Enforcement: $$5,493; 
Operations Support and Business Systems: $4,320; 
Modernization (combined) Taxpayer Services: $2,293; 
IRS Appropriations: $12.122 billion. 

Fiscal year: 2012; 
Enforcement: $5,299; 
Operations Support and Business Systems: $4,277; 
Modernization (combined) Taxpayer Services: $2,240; 
IRS Appropriations: $11.817 billion. 

Fiscal year: 2013; 
Enforcement: $4,949; 
Operations Support and Business Systems: $4,114; 
Modernization (combined) Taxpayer Services: $2,136; 
IRS Appropriations: $11.199 billion. 

Fiscal year: 2014
Enforcement: $5,022; 
Operations Support and Business Systems: $4,112; 
Modernization (combined) Taxpayer Services: $2,157; 
IRS Appropriations: $11.291 billion. 

Legend: FY = fiscal year. 

Source: Fiscal years 2009 through 2014 congressional justifications 
for IRS. 

Notes: The fiscal year 2013 levels represent an across the board 
rescission and reductions required by sequestration. In fiscalyear 
2014, IRS received $92 million for the improvement of services to 
taxpayers, refund fraud and identity theft, and international and 
offshore compliance issues. The operating plan, which has not been 
approved as of April 11, 2014, proposes allocating $34 million to 
Taxpayer Services and $58 milliontoOperations Support. In addition, 
IRS has proposed to transfer $69.2 million from Enforcement to 
Operations Support for information technology infrastructure ($40 
million) and a program reclassification ($29.2 million). Amounts shown 
do not include other budgetary resources, such as userfees. 

See appendix I for more information on IRS budget trends, including 
other budgetary resources. 

[End of figure] 

Staffing Trends: IRS Has Reduced FTEs by about 8,000 (9 percent) since 
Fiscal Year 2009: 

Figure 2: IRS Full-Time Equivalents (FTE) Funded through 
Appropriations, Fiscal Years 2009 through 2013 Actual and Fiscal Year 
2014 Enacted: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year: 2009; 
Enforcement: 47,361; 
Operations Support and Business Systems: 12,423; 
Modernization (combined) Taxpayer Services: 32,422; 
Total actual FTEs: 92.216. 

Fiscal year: 2010; 
Enforcement: 50,400; 
Operations Support and Business Systems: 12,599; 
Modernization (combined) Taxpayer Services: 31,607; 
Total actual FTEs: 94,618. 

Fiscal year: 2011; 
Enforcement: 49,920; 
Operations Support and Business Systems: 12,412; 
Modernization (combined) Taxpayer Services: 31,574; 
Total actual FTEs: 93,906. 

Fiscal year: 2012; 
Enforcement: 47,189; 
Operations Support and Business Systems: 12,061; 
Modernization (combined) Taxpayer Services: 30,236; 
Total actual FTEs: 89,486. 

Fiscal year: 2013; 
Enforcement: 44,174; 
Operations Support and Business Systems: 12,061; 
Modernization (combined) Taxpayer Services: 29,646; 
Total enacted FTEs: 85,881. 

Fiscal year: 2014; 
Enforcement: 42,805; 
Operations Support and Business Systems: 12,388; 
Modernization (combined) Taxpayer Services: 28,996; 
Total enacted FTEs: 84,189. 

Source: Fiscal years 2009 through 2014 congressional justifications 
for IRS. 

Notes: The fiscal year 2013 level represents an across-the-board 
rescission and reductions required by sequestration. In fiscal year 
2014, IRS received $92 million for the improvement of services to 
taxpayers, refund fraud and identity theft, and international and 
offshore compliance issues.The operating plan, which has not been 
approved as of April 11, 2014, proposes allocating $34 million to 
Taxpayer Services and $58 million to Operations Support.In addition, 
IRS has proposed to transfer $69.2 million from Enforcement to 
Operations Support for information technology infrastructure ($40 
million) anda program reclassification ($29.2 million). Amounts shown 
do not include FTEs funded with other budgetary resources, such as 
user fees. 

See appendix II for more information on IRS budget trends, including 
other budgetary resources. 

[End of figure] 

Performance Trends: Return Examination and Collection Coverage 
Measures Show Decline: 

Figure 3: IRS Return Examination and Collection Coverage Measures, 
Fiscal Years 2009 through 2013 Actual and Fiscal Year 2014 and 2015 
Targets: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year 2009 actual: 
Collection Coverage (units): 54.2%; 
Examination Coverage--Business (Assets more than $10 million): 5.6%; 
Automated Underreporter Coverage: 2.6%; 
Examination Coverage--Individual: 1.0%. 

Fiscal year 2010 actual: 
Collection Coverage (units): 50.1%; 
Examination Coverage--Business (Assets more than $10 million): 5.7%; 
Automated Underreporter Coverage: 3.0%; 
Examination Coverage--Individual: 1.1%. 

Fiscal year 2011 actual: 
Collection Coverage (units): 50.0%; 
Examination Coverage--Business (Assets more than $10 million): 6.2%; 
Automated Underreporter Coverage: 3.3%; 
Examination Coverage--Individual: 1.1%. 

Fiscal year 2012 actual: 
Collection Coverage (units): 48.1%; 
Examination Coverage--Business (Assets more than $10 million): 6.2%; 
Automated Underreporter Coverage: 3.2%; 
Examination Coverage--Individual: 1.1%. 

Fiscal year 2013 actual: 
Collection Coverage (units): 47.0%; 
Examination Coverage--Business (Assets more than $10 million): 5.6%; 
Automated Underreporter Coverage: 2.8%; 
Examination Coverage--Individual: 1.0%. 

Fiscal year 2014 Target (Original): 
Collection Coverage (units): 47.1%; 
Examination Coverage--Business (Assets more than $10 million): 4.9%; 
Automated Underreporter Coverage: 3.1%; 
Examination Coverage--Individual: 1.0%. 

Fiscal year 2014 Target (Updated March 2014): 
Collection Coverage (units): 42.7%; 
Examination Coverage--Business (Assets more than $10 million): 4.2%; 
Automated Underreporter Coverage: 2.5%; 
Examination Coverage--Individual: 0.8%. 

Fiscal year 2015 Target: 
Collection Coverage (units): 45.0%; 
Examination Coverage--Business (Assets more than $10 million): 4.1%; 
Automated Underreporter Coverage: 2.7%; 
Examination Coverage--Individual: 0.8%. 

Source: GAO analysis of fiscal years 2009 through 2014 congressional 
justifications for IRS. 

For more information on coverage measures, see appendix III. 

[End of figure] 

Performance Trends: Electronic Filing Continues to Increase in 2014: 

Table 1: Tax Returns Processed, 2009 through 2014 Filing Seasons (in 
Thousands): 

Number of individual tax returns processed: 
2009: 89,215; 
2010: 85,210; 
2011: 87,595; 
2012: 96,556; 
2013: 93,103; 
2014: 98,170; 
Percentage change from 2013 to 2014: 5.4%. 

Number of individual tax returns processed: Electronic: 
2009: 70,705; 
2010: 71,153; 
2011: 76,664; 
2012: 85,904; 
2013: 84,443; 
2014: 90,333; 
Percentage change from 2013 to 2014: 7%. 

Number of individual tax returns processed: Paper: 
2009: 18,510; 
2010: 14,057; 
2011: 10,932; 
2012: 10,653; 
2013: 8,660; 
2014: 7,837; 
Percentage change from 2013 to 2014: -9.5%. 

Percentage electronically filed[A]: 
2009: 79.3; 
2010: 83.5; 
2011: 87.5; 
2012: 89.0; 
2013: 90.7; 
2014: 92.0; 
Percentage change from 2013 to 2014: n/a. 

Free File[B]: 
2009: 2,416; 
2010: 2,498; 
2011: 2,344; 
2012: 2,431; 
2013: 2,337; 
2014: 2,573; 
Percentage change from 2013 to 2014: 10.1%. 

Number of refunds issued (millions): 
2009: 77.7; 
2010: 74.1; 
2011: 75.2; 
2012: 80.4; 
2013: 77.8; 
2014: 78.8; 
Percentage change from 2013 to 2014: 1.2%. 

Amount of refunds (billions): 
2009: $210.2; 
2010: $219.4; 
2011: $219.8; 
2012: $224.7; 
2013: $214.5; 
2014: $219.9; 
Percentage change from 2013 to 2014: 2.5%. 

Legend: n/a = not applicable. 

Source: GAO analysis of IRS data.

Notes: Unless otherwise noted, data are from January 1 of each year 
through April 3, 2009; April 2, 2010; April 1, 2011; April 6, 2012; 
April 5, 2013; and April 4, 2014. Numbers may not add due to rounding. 

[A] The percentage of returns filed electronically early in the filing 
season is likely to decline before the filing season is over. 
Taxpayers filed about 84 percent of all individual returns 
electronically in 2013. The numbers for electronic filing that we are 
reporting are for returns processed versus returns received. 

[B] IRS offers Free File software for eligible taxpayers to prepare 
and e-file their federal tax returns online for free at IRS.gov. Free 
File 2013 and 2014 data are from January 1 through April 8, 2013 and 
April 7, 2014. 

[End of table[ 

Performance Trends: IRS Is Providing Better Telephone Service in 2014 
Amidst Lower Demand Which IRS Attributes in Part to Fewer Tax Law 
Changes: 

Table 2: Interim IRS Call Volume, Level of Service, and Average Wait 
Times, 2009 through 2014 Filing Seasons: 

Call volume (in millions): 

Total calls to IRS[C]: 
Interim Filing Season[A]: 
2009: 52.4; 
2010: 48.7; 
2011: 53.3; 
2012: 65.1; 
2013: 59.0; 
Truncated Interim Filing Season: 
2013 (March 16): 51.1; 
2014 (March 15): 39.6; 
Percent change from March 2013 to March 2014[B]: -23%. 

Automated calls answered: 
Interim Filing Season[A]: 
2009: 19.6; 
2010: 23.1; 
2011: 26.8; 
2012: 36.4; 
2013: 32.4; 
Truncated Interim Filing Season: 
2013 (March 16): 28.7; 
2014 (March 15): 21.5; 
Percent change from March 2013 to March 2014[B]: -25%. 

Assistor answered calls: 
Interim Filing Season[A]: 
2009: 14.9; 
2010: 12.6; 
2011: 12.8; 
2012: 10.6; 
2013: 11.2; 
Truncated Interim Filing Season: 
2013 (March 16): 9.3; 
2014 (March 15): 6.7; 
Percent change from March 2013 to March 2014[B]: -28%. 

Abandoned, busies, and disconnects: 
Interim Filing Season[A]: 
2009: 17.9; 
2010: 13.0; 
2011: 13.7; 
2012: 18.1; 
2013: 15.4; 
Truncated Interim Filing Season: 
2013 (March 16): 13.1; 
2014 (March 15): 11.5; 
Percent change from March 2013 to March 2014[B]: -13%. 

Access measures: 

Level of Service (LOS)-–Percentage of callers seeking live assistance 
who receive it: 
Interim Filing Season[A]: 
2009: 64; 
2010: 75; 
2011: 75; 
2012: 68; 
2013: 69; 
Truncated Interim Filing Season: 
2013 (March 16): 69; 
2014 (March 15): 73; 
Percent change from March 2013 to March 2014[B]: 7%. 

Average wait time (in minutes): 
Interim Filing Season[A]: 
2009: 8.8; 
2010: 9.9; 
2011: 9.7; 
2012: 15.9; 
2013: 13.8; 
Truncated Interim Filing Season: 
2013 (March 16): 13.7; 
2014 (March 15): 12.4; 
Percent change from March 2013 to March 2014[B]: -9%. 

Source: GAO analysis of IRS data.

[A] Unless otherwise noted, data for filing season to date are 
cumulative for IRS from January 1 of each year to April 4, 2009; April 
3, 2010; April 2, 2011; March 31, 2012; and March 30, 2013. Because of 
time lags in data reporting, to compare this year to last, we used 
data are from January 1 of each year to March 16, 2013, and March 15, 
2014, for the truncated interim filing season column. 

[B] The numbers in the table are rounded, but the percent change was 
calculated using exact values. 

[C] The numbers in the table include the total automated, assistor 
answered, abandoned, busy and disconnected account calls, taxpayer 
account-related and tax law calls, but do not reflect the total number 
of attempted calls to IRS, nor do they represent total call volume to 
all IRS functions such as enforcement. 

[End of table] 

Performance Trends: IRS Is Providing Better Telephone Service in 2014 
Amidst Lower Demand Which IRS Attributes in Part to Fewer Tax Law 
Changes: 

Table 3: IRS Key Telephone Actual Performance Compared to its Goals, 
Fiscal Years 2009 through 2014: 

Level of Service (LOS)-–Percentage of callers seeking live assistance 
who receive it: 
Fiscal Year (October 1 through September 30)[A]: 
2009: 
Goal: 77%[B]; 
Actual: 70%; 
2010: 
Goal: 71%; 
Actual: 74%; 
2011: 
Goal: 71%; 
Actual: 70%; 
2012: 
Goal: 61%; 
Actual: 68%; 
2013: 
Goal: 70%; 
Actual: 61%; 
2014: 
Goal: 61%; 
Actual: 67%[C]. 

Averagewait time (in minutes): 
Fiscal Year (October 1 through September 30)[A]: 
2009: 
Goal: 10.4; 
Actual: 8.8; 
2010: 
Goal: 11.6; 
Actual: 10.8; 
2011: 
Goal: 11.6; 
Actual: 13.0; 
2012: 
Goal: 19; 
Actual: 16.7; 
2013: 
Goal: 14.6; 
Actual: 17.6; 
2014: 
Goal: 22.0; 
Actual: 16.8[C]. 

Source: GAO analysis of IRS data. 

[A] Unless otherwise noted, the goals listed are for the entire fiscal 
year.

[B] IRS revised its original fiscal year goal of 77 percent down to 70 
percent because of high call volume from taxpayers requesting 
electronic filing authentication information and asking stimulus-
related questions. 

[C] Unlike the level of service and wait time information reported in 
Table 2 for 2014, which is from January 1 through March 15, 2014, the 
corresponding data shown for 2014 in this table are fiscal year to 
date—-October 1, 2013, through March 15, 2014. 

[End of table] 

Performance Trends: IRS Continues to Answer More Automated than 
Assistor Answered Calls in 2014: 

Figure 4: IRS Call Volume, 2009 through 2014 Filing Seasons: 

[Refer to PDF for image: vertical bar graph] 

IRS has reported that answering calls using automation is 
substantially less expensive than using live assistors, which IRS 
estimated costs $33 per call in 2013. 

2009: 
Total calls to IRS: 52.4 million; 
Automated calls answered: 19.6 million; 
Assistor answered calls: 14.9 million; 
Abandoned, busies, and disconnects: 17.9 million. 

2010: 
Total calls to IRS: 48.7 million; 
Automated calls answered: 23.1 million; 
Assistor answered calls: 12.6 million; 
Abandoned, busies, and disconnects: 13 million. 

2011: 
Total calls to IRS: 53.3 million; 
Automated calls answered: 26.8 million; 
Assistor answered calls: 12.8 million; 
Abandoned, busies, and disconnects: 13.7 million. 

2012: 
Total calls to IRS: 65.1 million; 
Automated calls answered: 36.4 million; 
Assistor answered calls: 10.6 million; 
Abandoned, busies, and disconnects: 18.1 million. 

2013: 
Total calls to IRS: 59.0 million; 
Automated calls answered: 32.4 million; 
Assistor answered calls: 11.2 million; 
Abandoned, busies, and disconnects: 15.4 million. 

2014 (March 15): 
Total calls to IRS: 39.6 million; 
Automated calls answered: 21.5 million; 
Assistor answered calls: 6.7 million; 
Abandoned, busies, and disconnects: 11.5 million. 

Source: GAO analysis of IRS data. 

Notes: Unless otherwise noted, data are cumulative for IRS from 
January 1 of each year to April 4, 2009; April 3, 2010; April 2, 2011; 
March 31, 2012; and March 30, 2013. For 2014, data are from January 1 
through March 15, 2014. The numbers in the graphic include the total 
automated, assistor answered, abandoned, busy and disconnected 
taxpayer account-related and tax law calls, but do not reflect the 
total number of attempted calls to IRS, nor do they represent total 
call volume to all IRS functions such as enforcement.

[End of figure] 

Performance Trends: Average Wait Times Have Generally Increased since 
2009: 

Figure 5: Average Wait Time (in minutes), Fiscal Years 2009 through 
2014: 

[Refer to PDF for image: vertical bar graph] 

Average wait time (in minutes): 

Fiscal year: 2009: 
FY goal: 10.4; 
FY actual: 8.8; 
Filing season actual: 8.8. 

Fiscal year: 2010: 
FY goal: 11.6; 
FY actual: 10.8; 
Filing season actual: 9.9. 

Fiscal year: 2011: 
FY goal: 11.6; 
FY actual: 13.0; 
Filing season actual: 9.7. 

Fiscal year: 2012: 
FY goal: 19; 
FY actual: 16.7; 
Filing season actual: 15.9. 

Fiscal year: 2013: 
FY goal: 14.6; 
FY actual: 17.6; 
Filing season actual: 13.8. 

Fiscal year: 2014 (March 15): 
FY goal: 22; 
FY actual: 16.8; 
Filing season actual: 12.4. 

Legend: FY = fiscal year. 

Source: GAO analysis of IRS data. 

Notes: Unless otherwise noted, data are cumulative for IRS from 
January 1 of each year to April 4, 2009; April 3, 2010; April 2,2011; 
March 31, 2012; and March 30, 2013. For 2014, data are from January 1 
through March 15, 2014. 

[End of figure] 

Performance Trends: Overage Correspondence Has Increased Significantly 
since 2009: 

Figure 6: IRS Taxpayer Correspondence Performance, Fiscal Years 2009 
through 2013: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year: 2009; 
Correspondence received during the fiscal year: 19 million; 
Percentage of taxpayer correspondence overage at the end of the fiscal 
year: 25%. 

Fiscal year: 2010; 
Correspondence received during the fiscal year: 20 million; 
Percentage of taxpayer correspondence overage at the end of the fiscal 
year: 27%. 

Fiscal year: 2011; 
Correspondence received during the fiscal year: 20 million; 
Percentage of taxpayer correspondence overage at the end of the fiscal 
year: 35%. 

Fiscal year: 2012; 
Correspondence received during the fiscal year: 21 million; 
Percentage of taxpayer correspondence overage at the end of the fiscal 
year: 40%. 

Fiscal year: 2013; 
Correspondence received during the fiscal year: 21 million; 
Percentage of taxpayer correspondence overage at the end of the fiscal 
year: 47%. 

Source: GAO analysis of IRS data. 

Notes: Aggregate data are from two of IRS's units which jointly handle 
taxpayer correspondence. The same employees that provide telephone 
service also primarily handle this correspondence. Data cover 
equivalent periods for each fiscal year with slight variation in the 
exact dates depending on the year and data source. 

[End of figure] 

Fiscal Year 2015 Request: IRS Is Requesting $12.5 Billion in 
Appropriations, an Increase of 10.5 percent ($1.2 Billion) over Fiscal 
Year 2014: 

Figure 7: IRS Enacted Appropriations, Fiscal Year 2009 through 2014, 
and Fiscal Year 2015 Request: 

FY 2009: 
IRS Appropriation: $11.523 billion. 

FY 2010: 
IRS Appropriation: $12.146 billion. 

FY 2011: 
IRS Appropriation: $12.122 billion. 

FY 2012: 
IRS Appropriation: $11.817 billion. 

FY 2013: 
IRS Appropriation: $11.199 billion. 

FY 2014: 
IRS Appropriation: $11.291 billion; 
IRS Requested Appropriation Before Cap Adjustment: $11.997 billion. 

FY 2015: 
IRS Requested Appropriation: $12.477 billion. 

Legend: FY = fiscal year. 

Source: Fiscal years 2009 through 2015 congressional justifications 
for IRS. 

Notes: Fiscal year 2013 levels represent an across-the-board 
rescission and reductions required by sequestration. In fiscal 
year2014, IRS received $92 million for the improvement of services to 
taxpayers, refund fraud and identity theft, and international and 
offshore compliance issues. The operating plan, which has not been 
approved as of April 11, 2014, proposes allocating $34 million to 
Taxpayer Services and $58 million to Operations Support. In addition, 
IRS has proposed to transfer $69.2 million from Enforcement to 
Operations Support for information technology infrastructure ($40 
million) and a program reclassification ($29.2 million). Amounts shown 
do not include other budgetary resources, such as user fees. 

See appendix I for more information on the fiscal year 2015 budget 
request for IRS, including other budgetary resources. 

[End of figure] 

Fiscal Year 2015 Request: IRS's Largest Requested Increase Is $658 
Million for Operations Support[1]: 

Figure 8: Fiscal Year 2015 Budget Request by Appropriation Compared to 
Fiscal Year 2014 Enacted Appropriation for IRS: 

[Refer to PDF for image: horizontal bar graph] 

FY 2015 requested: 
Taxpayer Services: $2.318 billion; 
Enforcement: $5.372 billion; 
Operations Support: $4.457 billion; 
Business Systems Modernization: $330 million. 

FY 2014 enacted: 
Taxpayer Services: $2.157 billion; 
Enforcement: $5.022 billion; 
Operations Support: $3.799 billion; 
Business Systems Modernization: $313 million. 

Legend: FY = fiscal year. 

Source: Fiscal years 2014 through 2015 congressional justifications 
for IRS. Notes: Request includes 22 program initiatives totaling more 
than $1.1 billion (see appendixes IV through VIII). Amounts shown do 
not include other budgetary resources, such as user fees. 

[1] Operations Support includes IRS's information systems and overall 
planning, direction, and support for the IRS. 

See appendix I for more information on IRS budget trends, including 
other budgetary resources. 

[End of figure] 

Fiscal Year 2015 Request: IRS Proposed Increasing Staffing to about 
Fiscal Year 2012 Levels: 

Figure 9: IRS Full-Time Equivalents Funded through Appropriations, 
Fiscal Years 2009 through 2013 Actual, 2014 Enacted, and 2015 Request: 

[Refer to PDF for image: line graph] 

FY 2009: 
Actual FTEs: 92,216. 

FY 2010: 
Actual FTEs: 94,618. 

FY 2011: 
Actual FTEs: 93,906. 

FY 2012: 
Actual FTEs: 89,486. 

FY 2013: 
Actual FTEs: 85,881. 

FY 2014: 
Enacted FTEs: 84,189; 
IRS Requested FTEs Before Cap Adjustment: 88,798. 

FY 2009: 
Requested FTEs: 91,187. 

Legend: FY = fiscal year. 

FTE = full-time equivalent. 

Source: Fiscal years 2009 through 2015 congressional justification for 
IRS. 

Notes: Fiscal year 2013 levels represent the across-the-board 
rescission and reductions required by sequestration. In fiscal year 
2014, IRS received $92 million for the improvement of services to 
taxpayers, refund fraud and identity theft, and international and 
offshore compliance issues. The operating plan, which has not been 
approved as of April 11, 2014, proposes allocating $34 million to 
Taxpayer Services and $58 million to Operations Support. In addition, 
IRS has proposed to transfer $69.2 million from Enforcement to 
Operations Support for information technology infrastructure ($40 
million) and a program reclassification ($29.2 million). Amounts shown 
do not include FTEs funded with other budgetary resources, suchasuser 
fees. The FY 2015 initiatives were developed with most FTE 
costedassuming a January 1 hire date. 

See appendix II for more information on FTEs in the Fiscal Year 2015 
budget request for IRS, including other budgetary resources. 

[End of figure] 

Fiscal Year 2015 Request: The Largest Staffing Increase Is about 3,000 
FTEs for Enforcement: 

Figure 10: Fiscal Year 2015 Full-Time Equivalents, Budget Request by 
Appropriation Compared to Fiscal Year 2014 Enacted Appropriation for 
IRS: 

[Refer to PDF for image: horizontal bar graph] 

FY 2015 requested: 
Taxpayer Services: 31,481; 
Enforcement: 45,757; 
Operations Support: 3,380; 
Business Systems Modernization: 569. 

FY 2014 enacted: 
Taxpayer Services: 28,996; 
Enforcement: 42,805; 
Operations Support: 11,860; 
Business Systems Modernization: 528. 

Legend: FY = fiscal year. 

Source: Fiscal year 2015 congressional justification for IRS. 

Note: The FY 2015 initiatives were developed with most FTE 
costedassuming a January 1 hire date. 

See appendix II for more information on FTEs in the fiscal year 2015 
budget request for IRS, including other budgetary resources. 

[End of figure] 

Workload: Staff Dedicated to Legislative Mandates and Priority 
Programs: 

Table 4: Full-Time Equivalents to Implement New Laws and Priority 
Programs, Fiscal Years 2013 Actual, 2014 Planned, and 2015 Requested: 

Legislative Mandate/Priority Program: Refund fraud including identity 
theft; 
FY 2013 actual: 4,146; 
FY 2014 enacted: 4,146; 
FY 2015 requested[A]: 4,603. 

Legislative Mandate/Priority Program: International and offshore tax 
administration; 
FY 2013 actual: 2,135; 
FY 2014 enacted: 1,819; 
FY 2015 requested[A]: 2,151. 

Legislative Mandate/Priority Program: Patient Protection and 
Affordable Care Act[B]; 
FY 2013 actual: 701; 
FY 2014 enacted: 1,954[C]; 
FY 2015 requested[A]: 2,046. 

Legislative Mandate/Priority Program: Merchant card/cost basis 
reporting[D,E]; 
FY 2013 actual: 90; 
FY 2014 enacted: 128; 
FY 2015 requested[A]: 450. 

Legislative Mandate/Priority Program: Foreign Account Tax Compliance 
Act[F]; 
FY 2013 actual: 40; 
FY 2014 enacted: 50; 
FY 2015 requested[A]: 394. 

Legislative Mandate/Priority Program: Return Review Program/Electronic 
Fraud Detection System; 
FY 2013 actual: 104; 
FY 2014 enacted: 137; 
FY 2015 requested[A]: 137. 

Legislative Mandate/Priority Program: Return preparer oversight; 
FY 2013 actual: 167; 
FY 2014 enacted: 80; 
FY 2015 requested[A]: 186. 

Total FTEs: 
FY 2013 actual: 7,383; 
FY 2014 enacted: 8,314; 
FY 2015 requested[A]: 9,967.

Legend: FY = fiscal year. 

FTE = full-time equivalent. 

Source: IRS Office of Corporate Budget. 

Notes: 

[A] The FY 2015 initiatives were developed with most FTE costed 
assuming a January 1 hire date. 

[B] PPACA, Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010), as 
amended by the Health Care and Education Reconciliation Act (HCERA), 
Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 2010). All references to 
PPACA include amendments by HCERA. 

[C] According to IRS officials, this reflects the number of FTEs 
requested in the Fiscal Year 2014 President's Budget.

[D] Housing Assistance Tax Act of 2008, Pub. L. No. 110-289, div. C, 
§3091, 122 Stat. 2654, 2908-2911 (July 30, 2008).

[E] Energy Improvement and Extension Act of 2008, Pub. L. No. 110-343, 
div. B, §403, 122 Stat. 3765, 3854-3860 (Oct. 3, 2008).

[F] Hiring Incentives to Restore Employment Act, Pub. L. No. 111-147, 
Title V, 124 Stat. 71, 97-117 (Mar. 18, 2010). 

See appendices IX and X for more information on PPACA spending. 

[End of table] 

Absorbing Cuts: Reductions to IRS's Budget Greater than Projected 
Savings: 

IRS has absorbed approximately $900 million in budget cuts since 
fiscal year 2010. 

Figure 11: IRS Projected and Actual Savings and Efficiencies, Fiscal 
Year 2009 through 2015[A]: 

[Refer to PDF for image: horizontal bar graph] 

Dollars in thousands: 

FY 2009; 
Projected Savings and Efficiencies: $94,249. 

FY 2010; 
Projected Savings and Efficiencies: $118,125; 
Actual Budget Reductions, Savings and Efficiencies: $176,425. 

FY 2011; 
Projected Savings and Efficiencies: $190,638; 
Actual Budget Reductions, Savings and Efficiencies: $277,178. 

FY 2012; 
Projected Savings and Efficiencies: $189,957; 
Actual Budget Reductions, Savings and Efficiencies: $426,013. 

FY 2013; 
Projected Savings and Efficiencies: $70,850; 
Actual Budget Reductions, Savings and Efficiencies: $586,382. 

FY 2014; 
Projected Savings and Efficiencies: $254,864. 

FY 2015; 
Projected Savings and Efficiencies: $95,200. 

Legend: FY = fiscal year. 

Source: GAO analysis of fiscal year 2009 through fiscal year 2015 IRS 
congressional justifications for the IRS.Note: aIRSbegan calculating 
actual savings and efficiencies in fiscal year 2012, based on our 
recommendation. 

[End of figure] 

Absorbing Cuts: IRS Reduced or Eliminated Some Services in 2014: 

In 2014, IRS reduced or eliminated services, consistent with our 
finding in December 2012 that IRS needed to dramatically revise its 
strategy for providing telephone and correspondence services, and that 
incremental efficiency gains would not be enough to reverse service 
declines. IRS: 

* limited inquiries to answer only basic tax law questions during the 
filing season and reassigned assistors to work account-related inquires;

* launched the “Get Transcript” tool, which allows taxpayers to obtain 
a viewable and printable transcript on [hyperlink, 
http://www.irs.gov], and redirected taxpayers to automated tools for 
additional guidance; 

* redirected refund-related inquiries to automated services and did 
not answer refund inquires until 21 days after the tax return was 
filed electronically or 6 weeks after the return was filed by paper 
(unless the automated service directed the taxpayer to contact IRS); 

* limited access to the Practitioner Priority Services line to only 
those practitioners working tax account issues; 

* limited live assistance and redirected requests for domestic 
employer identification numbers to IRS's online tool; and; 

* eliminated free return preparation and reduced other services at 
IRS's walk-in sites. 

Absorbing Cuts: IRS Has Delayed Two IT Projects In Part Due to Budget 
Reductions: 

IRS put two major IT projects, Information Reporting and Document 
Matching (IRDM) and the Return Review Program (RRP),on hold due to a 
lack of funding and technical issues (See appendix XI).[[1] 

* During the hold, IRS will determine the best case management tool to 
use to meet IRDM's program requirements. It plans to leverage an off-
the-shelf solution because IRS believes it will be more cost effective 
than building one. 

* IRS initially planned to release all of RRP by March 2015. The first 
phase, Transition State 1.0 (TS1), was split into two releases: R1.0 
and R1.1. Testing of TS1 R1.0 has been ongoing, and will continue for 
the remainder of the calendar year. IRS put the next two phases, TS1.5 
and TS2.0 on hold until it has analyzed and resolved how to design 
RRP's architecture more efficiently.

- IRS is working to develop a plan to move beyond the hold on RRP, and 
expects to complete the plan in the summer of 2014, and will initiate 
the plan after that time. Moving forward, this plan will help inform 
IRS's funding needs for RRP.

[1] Information Reporting and Document Matching (IRDM): IRDM is 
intended to be used to improve business taxpayer compliance by 
matching business information (e.g., 1099-K) tax returns with 
individual tax returns to identify potential income under reporting. 
ReturnReview Program (RRP): When RRP is fully deployed it is expected 
to make use of leading-edge technology to detect, resolve, and prevent 
fraud. 

Absorbing Cuts:IRS Substantially Reduced Employee Training: 

According to IRS Commissioner Koskinen, since 2010 IRS has reduced 
training costs by 83 percent and training-related travel costs by 87 
percent by limiting employee travel and training to mission-critical 
projects. 

For fiscal year 2013, IRS reported a savings of $56.2 million by 
reducing agency-wide, non-technical training and non-case related 
travel. 

In its fiscal year 2013 Report to Congress, the National Taxpayer 
Advocate lists training cuts as one of IRS's most serious problems. 
From fiscal years 2009 through 2013, per-employee spending dropped 
from $1,450 per full-time equivalent to less than $250.

Table 5: Percentage of Training Reduction for Selected IRS Divisions, 
Fiscal Years 2009 through 2013: 

Division: Appeals; 
Percent reduction: 96%. 

Division: Tax Exempt and Government Entities; 
Percent reduction: 96%. 

Division: Small Business/Self-Employed; 
Percent reduction: 93%. 

Division: Large Business and International; 
Percent reduction: 92%. 

Division: Taxpayer Advocate Service; 
Percent reduction: 78%. 

Division: Wage and Investment; 
Percent reduction: 74%. 

Source: National Taxpayer Advocate: 2013 Annual Report to Congress, 
Volume I, (Dec. 31, 2013).

[End of table] 

Opportunities Exist to More Strategically Manage Operations: 

Funding is one component of improving operations. Legislative 
proposals and our prior work provide options to improve IRS operations 
(see appendixes XII and XIII). For example, the administration 
proposes legislative changes such as providing IRS with greater 
flexibility to address correctable errors (broaden math error 
authority). 

In addition, we recommended that IRS: 

* outline a strategy that defines appropriate levels of telephone and 
correspondence service and wait times and lists specific steps to 
manage service based on an assessment of time frames, demand, 
capabilities, and resources [hyperlink, 
http://www.gao.gov/products/GAO-13-156].[1] IRS did not agree or 
disagree with this recommendation, stating that it already had an 
objective of providing taxpayers with access to accurate services 
while managing demand by improving efficiency. However, in recent 
years, because IRS has not kept up with the demand for its services we 
maintain our recommendation is valid; a strategy to reverse the trends 
may require difficult tradeoffs. 

* review disparities in the ratios of direct revenue yield to costs 
across different enforcement programs and across different groups of 
cases within programs and determine whether this evidence provides a 
basis for adjusting IRS's allocation of enforcement resources each 
year. We noted that the better empirical basis IRS planners have for 
making such judgments, the more confident they can be that they are 
allocating their limited resources to the best effect [hyperlink, 
http://www.gao.gov/products/GAO-13-151].[2] IRS agreed with our 
recommendation. Given the time to develop additional key data, IRS is 
considering how to apply interim methods, findings, or approximations. 
They are unsure when this work will be completed; we believe our 
recommendation remains valid. 

* develop a long-term strategic plan for its web services. We noted 
that a long-term strategy could help managers have a common 
understanding of IRS's plans, and better assist Congress in 
understanding what it is being asked to fund and holding IRS 
accountable for progress [hyperlink, 
http://www.gao.gov/products/GAO-13-435].[3] In April 2014, IRS 
reported that a long-term online strategy for improving web services 
will be completed in February 2015.

[1] GAO, 2012 Tax Filing: IRS Faces Challenges Providing Service to 
Taxpayers and Could Collect Balances Due More Effectively, [hyperlink, 
http://www.gao.gov/products/GAO-13-156] (Washington, D.C.: Dec. 18, 
2012). 

[2] GAO, Tax Gap: IRS Could Significantly Increase Revenues by Better 
Targeting Enforcement Resources, [hyperlink, 
http://www.gao.gov/products/GAO-13-151] (Washington, D.C.: Dec. 5, 
2012).

[3] GAO, IRS Website: Long-Term Strategy Needed to Improve Interactive 
Services, [hyperlink, http://www.gao.gov/products/GAO-13-435] 
(Washington, D.C.: Apr. 16, 2013).

Concluding Observations: 

IRS has absorbed budget cuts since fiscal year 2010, and the resulting 
imbalance between service and demand has adversely affected 
operations. To address this imbalance, IRS has requested a large 
budget increase for 2015. However, additional funding is not the only 
solution for IRS.We have open recommendations that may help IRS to 
more effectively manage its operations and achieve some savings over 
time. 

[End of section] 

Appendix I: Dollars by Appropriation Account, Fiscal Years 2009 
through 2015: 

Table 6: Fiscal Years 2009 through 2014 Enacted and Fiscal Year 2015 
Budget Request for IRS by Appropriation Account (Dollars in Millions): 

Appropriation account: Enforcement; 
FY 2009 enacted: $5,117; 
FY 2010 enacted: $5,504; 
FY 2011 enacted: $5,493; 
FY 2012 enacted: $5,299; 
FY 2013 enacted[A]: $4,949; 
FY 2014 enacted[B]: $5,022; 
FY 2015 requested: $5,372; 
Dollar change FY 2014 enacted compared to FY 2015 requested: $350; 
Percent change FY 2014 enacted compared to FY 2015 requested: 7.0%. 

Appropriation account: Operations support; 
FY 2009 enacted: $3,867; 
FY 2010 enacted: $4,084; 
FY 2011 enacted: $4,057; 
FY 2012 enacted: $3,947; 
FY 2013 enacted[A]: $3,801; 
FY 2014 enacted[B]: $3,799; 
FY 2015 requested: $4,457; 
Dollar change FY 2014 enacted compared to FY 2015 requested: $658; 
Percent change FY 2014 enacted compared to FY 2015 requested: 17.3%. 

Appropriation account: Taxpayer services; 
FY 2009 enacted: $2,293; 
FY 2010 enacted: $2,279; 
FY 2011 enacted: $2,293; 
FY 2012 enacted: $2,240; 
FY 2013 enacted[A]: $2,136; 
FY 2014 enacted[B]: $2,157; 
FY 2015 requested: $2,318; 
Dollar change FY 2014 enacted compared to FY 2015 requested: $161; 
Percent change FY 2014 enacted compared to FY 2015 requested: 7.5%. 

Appropriation account: Business Systems Modernization; 
FY 2009 enacted: $230; 
FY 2010 enacted: $264; 
FY 2011 enacted: $263; 
FY 2012 enacted: $330; 
FY 2013 enacted[A]: $313; 
FY 2014 enacted[B]: $313; 
FY 2015 requested: $330; 
Dollar change FY 2014 enacted compared to FY 2015 requested: $17; 
Percent change FY 2014 enacted compared to FY 2015 requested: 5.5%. 

Appropriation account: Health Insurance Tax Credit Administration 
(HITCA)[C]; 
FY 2009 enacted: $15; 
FY 2010 enacted: $16; 
FY 2011 enacted: $15; 
FY 2012 enacted: 0; 
FY 2013 enacted[A]: 0; 
FY 2014 enacted[B]: 0; 
FY 2015 requested: 0; 
Dollar change FY 2014 enacted compared to FY 2015 requested: 0; 
Percent change FY 2014 enacted compared to FY 2015 requested: 0. 

Appropriation account: Subtotal; 
FY 2009 enacted: $11,523; 
FY 2010 enacted: $12,146; 
FY 2011 enacted: $12,122; 
FY 2012 enacted: $11,817; 
FY 2013 enacted[A]: $11,199; 
FY 2014 enacted[B]: $11,291; 
FY 2015 requested: $12,477; 
Dollar change FY 2014 enacted compared to FY 2015 requested: $1,186; 
Percent change FY 2014 enacted compared to FY 2015 requested: 10.5%. 

Appropriation account: Other resources, such as user fees; 
FY 2009 enacted: $390; 
FY 2010 enacted: $539; 
FY 2011 enacted: $655; 
FY 2012 enacted: $695; 
FY 2013 enacted[A]: $855; 
FY 2014 enacted[B]: $815; 
FY 2015 requested: $785; 
Dollar change FY 2014 enacted compared to FY 2015 requested: -$30; 
Percent change FY 2014 enacted compared to FY 2015 requested: -3.7%. 

Appropriation account: Total funding available for obligations; 
FY 2009 enacted: $11,913; 
FY 2010 enacted: $12,686; 
FY 2011 enacted: $12,777; 
FY 2012 enacted: $12,512; 
FY 2013 enacted[A]: $12,053; 
FY 2014 enacted[B]: $12,106; 
FY 2015 requested: $13,261; 
Dollar change FY 2014 enacted compared to FY 2015 requested: $1,156; 
Percent change FY 2014 enacted compared to FY 2015 requested: 9.6%. 

Legend: FY = fiscal year. 

Source: Fiscal years 2011through 2015 congressional justifications for 
IRS. 

Notes: Dollars are nominal and not adjusted for inflation, and numbers 
may not add due to rounding.

[A] FY2013 enacted represents the operating level after applying 
across-the-board rescission and reductions required by sequestration 
and an interappropriation transfer of $73 million transferred from the 
Enforcement appropriation to the Taxpayer Services ($13 million) and 
Operations Support ($60 million) appropriations. 

[B] In fiscal year 2014, IRS received $92 million for the improvement 
of services to taxpayers, refund fraud and identity theft, and 
international and offshore compliance issues. The operating plan, 
which has not been approved as of April 11, 2014, proposes allocating 
$34 million to Taxpayer Services and $58 million to Operations 
Support. In addition, IRS has proposed to transfer $69.2 million from 
Enforcement to Operations Support for information technology 
infrastructure ($40 million) and a program reclassification ($29.2 
million). 

[C] In FY 2012, administrative resources for HITCA were moved to the 
Taxpayer Services appropriation under the Consolidated Appropriations 
Act, 2012, Pub. L. No. 112-74, 125 Stat. 786 (Dec. 23, 2011). 

[End of table] 

[End of Appendix I] 

Appendix II: Staffing by Appropriation Account, Fiscal Years 2009 
through 2015: 

Table 7: Fiscal Years 2009 through 2013 Actual, 2014 Enacted, and 2015 
Requested Full-time Equivalents by Appropriation Account: 

Appropriation account: Enforcement; 
FY 2009 actual: 47,361; 
FY 2010 actual: 50,400; 
FY 2011 actual: 49,920; 
FY 2012 actual: 47,189; 
FY 2013 actual[A]: 44,174; 
FY 2014 enacted[B]: 42,805; 
FY 2015 requested[C]: 45,757; 
FTE change FY 2014 enacted compared to FY 2015 requested: 2,952; 
Percent change FY 2014 enacted compared to FY 2015 requested: 6.9%. 

Appropriation account: Operations support; 
FY 2009 actual: 12,101; 
FY 2010 actual: 12,262; 
FY 2011 actual: 12,103; 
FY 2012 actual: 11,499; 
FY 2013 actual[A]: 11,610; 
FY 2014 enacted[B]: 11,860; 
FY 2015 requested[C]: 13,380; 
FTE change FY 2014 enacted compared to FY 2015 requested: 1,520; 
Percent change FY 2014 enacted compared to FY 2015 requested: 12.8%. 

Appropriation account: Taxpayer services; 
FY 2009 actual: 32,422; 
FY 2010 actual: 31,607; 
FY 2011 actual: 31,574; 
FY 2012 actual: 30,236; 
FY 2013 actual[A]: 29,646; 
FY 2014 enacted[B]: 28,996; 
FY 2015 requested[C]: 31,481; 
FTE change FY 2014 enacted compared to FY 2015 requested: 2,485; 
Percent change FY 2014 enacted compared to FY 2015 requested: 8.6%. 

Appropriation account: Business Systems Modernization; 
FY 2009 actual: 322; 
FY 2010 actual: 337; 
FY 2011 actual: 309; 
FY 2012 actual: 562; 
FY 2013 actual[A]: 451; 
FY 2014 enacted[B]: 528; 
FY 2015 requested[C]: 569; 
FTE change FY 2014 enacted compared to FY 2015 requested: 41; 
Percent change FY 2014 enacted compared to FY 2015 requested: 7.8%. 

Appropriation account: Health Insurance Tax Credit Administration 
(HITCA)[D]; 
FY 2009 actual: 10; 
FY 2010 actual: 12; 
FY 2011 actual: 0; 
FY 2012 actual: 0; 
FY 2013 actual[A]: 0; 
FY 2014 enacted[B]: 0; 
FY 2015 requested[C]: 0; 
FTE change FY 2014 enacted compared to FY 2015 requested: 0; 
Percent change FY 2014 enacted compared to FY 2015 requested: 0. 

Appropriation account: Subtotal; 
FY 2009 actual: 92,216; 
FY 2010 actual: 94,618; 
FY 2011 actual: 93,906; 
FY 2012 actual: 89,486; 
FY 2013 actual[A]: 85,881; 
FY 2014 enacted[B]: 84,189; 
FY 2015 requested[C]: 91,187; 
FTE change FY 2014 enacted compared to FY 2015 requested: 6,998; 
Percent change FY 2014 enacted compared to FY 2015 requested: 8.3%. 

Appropriation account: Other resources, such as user fees; 
FY 2009 actual: 1,153; 
FY 2010 actual: 752; 
FY 2011 actual: 1,003; 
FY 2012 actual: 2,185; 
FY 2013 actual[A]: 1,884; 
FY 2014 enacted[B]: 1,503; 
FY 2015 requested[C]: 1,503; 
FTE change FY 2014 enacted compared to FY 2015 requested: 0; 
Percent change FY 2014 enacted compared to FY 2015 requested: 0. 

Appropriation account: Total; 
FY 2009 actual: 93,369; 
FY 2010 actual: 95,370; 
FY 2011 actual: 94,909; 
FY 2012 actual: 91,671; 
FY 2013 actual[A]: 87,765; 
FY 2014 enacted[B]: 85,692; 
FY 2015 requested[C]: 92,690; 
FTE change FY 2014 enacted compared to FY 2015 requested: 6,998; 
Percent change FY 2014 enacted compared to FY 2015 requested: 8.2%. 

Legend: FY = fiscal year. 

Source: Fiscal years 2011 through 2014 congressional justifications 
for IRS. 

Notes: 

[A] FY 2013 actual represents the operating level after applying 
across-the-board rescission and reductions required by sequestration 
and an interappropriation transfer of $73 million transferred from the 
Enforcement appropriation to the Taxpayer Services ($13 million) and 
Operations Support ($60 million) appropriations. 

[B] In fiscal year 2014, IRS received $92 million for the improvement 
of services to taxpayers, refund fraud and identity theft, and 
international and offshore compliance issues. The operating plan, 
which has not been approved as of April 11, 2014, proposes allocating 
$34 million to Taxpayer Services and $58 million to Operations 
Support. In addition, IRS has proposed to transfer $69.2 million from 
Enforcement to Operations Support for information technology 
infrastructure ($40 million) and a program reclassification ($29.2 
million). 

[C] The FY 2015 initiatives were developed with most FTE costed 
assuming a January 1 hire date.

[D] The administrative resources for HITCA were moved to the Taxpayer 
Services appropriation under the Consolidated Appropriations Act, 
2012, Pub. L. No. 112-74, 125 Stat. 786 (Dec. 23, 2011).

[End of table] 

[End of Appendix II] 

Appendix III: IRS Adjusted Enforcement Coverage and Efficiency Targets 
Downward: 

Table 8: IRS Enforcement Coverage Measures Fiscal Years 2009 through 
2013 Actual and 2014 and 2015 Targets: 

Selected Examination Measures: 

Examination Coverage-Individual: 
FY 2009 Actual: 1.0%
FY 2010 Actual: 1.1%
FY 2011 Actual: 1.1%
FY 2012 Actual: 1.0%
FY 2013 Actual: 1.0%
FY 2014 Target[A] (Original): 1.0%
FY 2014 Target (March 2014): 0.8%
FY 2015 Target[B]: 0.8%

Examination Efficiency-Individual: 
FY 2009 Actual: 138
FY 2010 Actual: 140
FY 2011 Actual: 139
FY 2012 Actual: 142
FY 2013 Actual: 142
FY 2014 Target[A] (Original): 145
FY 2014 Target (March 2014): 133
FY 2015 Target[B]: 124

Examination Coverage Business (Assets more than 10 million): 
FY 2009 Actual: 5.6%
FY 2010 Actual: 5.7%
FY 2011 Actual: 6.2%
FY 2012 Actual: 6.2%
FY 2013 Actual: 5.6%
FY 2014 Target[A] (Original): 4.9%
FY 2014 Target (March 2014): 4.2%
FY 2015 Target[B]: 4.1%. 

Automated Underreporter Coverage: 
FY 2009 Actual: 2.6%
FY 2010 Actual: 3.0%
FY 2011 Actual: 3.3%
FY 2012 Actual: 3.2%
FY 2013 Actual: 2.8%
FY 2014 Target[A] (Original): 3.1%
FY 2014 Target (March 2014): 2.5%
FY 2015 Target[B]: 2.7%. 

Automated Underreporter Efficiency: 
FY 2009 Actual: 1,905
FY 2010 Actual: 1,924
FY 2011 Actual: 2,007
FY 2012 Actual: 2,041
FY 2013 Actual: 2,025
FY 2014 Target[A] (Original): 2,001
FY 2014 Target (March 2014): 1,931
FY 2015 Target[B]: 1,950. 

Selected Collections Measures: 

Collection Coverage: 
FY 2009 Actual: 54.2%
FY 2010 Actual: 50.1%
FY 2011 Actual: 50.0%
FY 2012 Actual: 48.1%
FY 2013 Actual: 47.0%
FY 2014 Target[A] (Original): 47.1%
FY 2014 Target (March 2014): 42.7%
FY 2015 Target[B]: 45.0%

Collection Efficiency: 
FY 2009 Actual: 1,845
FY 2010 Actual: 1,822
FY 2011 Actual: 1,952
FY 2012 Actual: 1,997
FY 2013 Actual: 2,057
FY 2014 Target[A] (Original): 2,039
FY 2014 Target (March 2014): 2,007
FY 2015 Target[B]: 1,900. 

Automated Collection System Accuracy: 
FY 2009 Actual: 94.3%
FY 2010 Actual: 95.9%
FY 2011 Actual: 94.9%
FY 2012 Actual: 94.7%
FY 2013 Actual: 94.4%
FY 2014 Target[A] (Original): 94.5%
FY 2014 Target (March 2014): 94.0%
FY 2015 Target[B]: 94.0%. 

Source: GAO analysis of fiscal years 2014 and 2015 congressional 
justifications for IRS. 

Notes: Coverage measures generally are the number of closed 
examinations by the number of filings for the prior year. Efficiency 
measures are generally the total number of cases closed divided by 
total full time equivalents used. Automated Collection System Accuracy 
refers to the percent of taxpayers who received the correct answer to 
their question.

[A] The FY 2014 target was based on the FY2014 budget request. 

[B] The FY 2015 target was based on the FY2015 budget request. 

[End of table] 

[End of Appendix III] 

Appendix IV: Of Requested $1.2 Billion for Fiscal Year 2015, $480 
Million Predicated on a Cap Adjustment[A]: 

The fiscal year 2015 request includes 22 new program initiatives—-17 
of which are predicated on a cap adjustment-—with total requested 
funding of more than $1.1 billion.[2] This includes: 

* 13 for enforcement ($535 million), 
* 6 for Infrastructure ($376 million), 
* 1 for taxpayer service ($221 million), and 
* 1 for BSM ($17 million).

Figure 12: Funding Requested for New Initiatives Predicated on a Cap 
Adjustment (Dollars in Thousands): 

[Refer to PDF for image: horizontal bar graph] 

Program Increases: 
Taxpayer services: $167,382; 
Enforcement: $53,545; 
BSM: $15,679. 

Predicated on Cap Adjustment: 
Enforcement: $241,689. 

Source: GAO analysis of fiscal year 2015 congressional justification 
for IRS. 

[1] Congress passes cap adjustments to allow for additional funding 
above discretionary spending lists for certain activities. 

[2] One of the new program initiatives predicated on a cap adjustment 
is a funding transfer to the Alcohol Tobacco Trade Bureau. 

[End of figure] 

[End of Appendix IV] 

Appendix V: IRS Proposed 17 Initiatives Predicated on a Cap Adjustment 
Totaling $480 Million: 

Table 9: Funding Requested for New Initiatives Predicated on a Cap 
Adjustment (Dollars in Thousands): 

Description of budget adjustments: 

Enforcement Initiatives: 

Address International and Offshore Compliance Issues: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $49,037; 
Operations support account: $7,773; 
Business Systems Modernization: 0; 
Total: $56,810; 
Projected Enforcement ROI for fiscal year 2017: 4.8; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Expand Coverage of High Wealth Individuals and Enterprises: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $17,684; 
Operations support account: $43,273; 
Business Systems Modernization: 0; 
Total: $20,957; 
Projected Enforcement ROI for fiscal year 2017: 11.3; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Expand Audit Coverage: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $53,581; 
Operations support account: $44,198; 
Business Systems Modernization: 0; 
Total: $97,779; 
Projected Enforcement ROI for fiscal year 2017: 7.1; 
Projected Protected Revenue ROI for fiscal year 2017: 20.5

Improve Coverage of Partnerships and Flow-Through Entities: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $28,690; 
Operations support account: $7,849; 
Business Systems Modernization: 0; 
Total: $36,539; 
Projected Enforcement ROI for fiscal year 2017: 6.8; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Expand ComplianceCoverage in the Tax-Exempt Sector: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $13,364; 
Operations support account: $2,731; 
Business Systems Modernization: 0; 
Total: $16,095; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0, 

Pursue Fraud Referrals, Employment Tax, and Abusive Tax Schemes: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $9,275; 
Operations support account: $8,537; 
Business Systems Modernization: 0; 
Total: $17,812; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Build Out Tax Return Preparer Compliance and Professional 
Responsibility Activities: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $14,765; 
Operations support account: $2,772; 
Business Systems Modernization: 0; 
Total: $17,537; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Implement Information Technology(IT) Changes to Deliver the Foreign 
Account Tax Compliance Act (FATCA): 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $32,223; 
Business Systems Modernization: 0; 
Total: $32,223; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Leverage Digital Evidencefor Criminal Investigation: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $698; 
Operations support account: $3,674; 
Business Systems Modernization: 0; 
Total: $4,372; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Leverage Data to Improve Case Selection: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $4,052; 
Operations support account: $32,741; 
Business Systems Modernization: 0; 
Total: $36,793; 
Projected Enforcement ROI for fiscal year 2017: 2.0[A]; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Infrastructure Initiatives: 

ImplementInformation Technology (IT) Services: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $10,000; 
Business Systems Modernization: 0; 
Total: $10,000; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Implement Campus Consolidation and Revitalization Strategy: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: 0; 
Business Systems Modernization: $10,000; 
Total: $10,000; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Implement e-Governmentand Other Administration Priorities: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $31,011; 
Business Systems Modernization: 0; 
Total: $31,011; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Maintain Integrityof Revenue Financial Systems: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $12,136; 
Business Systems Modernization: 0; 
Total: $12,136; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Expand Virtual Service Delivery (VSD): 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $7,701; 
Business Systems Modernization: 0; 
Total: $7,701; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Alcohol and Tobacco Tax and Trade Bureau Program Integrity Transfer: 

Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $5,000; 
Operations support account: 0; 
Business Systems Modernization: 0; 
Total: $5,000; 
Projected Enforcement ROI for fiscal year 2017: 0; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Total Fiscal Year 2015 Cap Adjustment: 
Fiscal year 2015 funding requested, by appropriation account: 
Taxpayer services account: 0; 
Enforcement account: $237,838; 
Operations support account: $241,689; 
Business Systems Modernization: 0; 
Total: $479,527; 
Projected Enforcement ROI for fiscal year 2017: n/a; 
Projected Protected Revenue ROI for fiscal year 2017: 0. 

Legend: n/a = not applicable. 

Note: Numbers may not add due to rounding. 

Source: Fiscal year 2015 congressional justification for IRS. 

Note:

[A] IRS considers leveraging data to improve case selection a revenue-
enhancing initiative. 

[End of table] 

[End of Appendix V] 

Appendix VI: Five Proposed Initiatives for $654 Million Are Not 
Predicated on a Cap Adjustment: 

Table 10: Funding Requested for New Initiatives Not Predicated on a 
Program Integrity Cap Adjustment (Dollars in Thousands): 

Description of budget adjustments: 

New initiatives: 
Appropriation Account: 
Taxpayer services account: $167,382; 
Enforcement account: $53,545; 
Operations support account: $417,780; 
Business Systems Modernization: $15,679; 
Total: $654,386; 
Projected enforcement revenue ROI for fiscal year 2017: n/a; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Improve Taxpayer Services and Return Processing
Appropriation Account: 
Taxpayer services account: $153,482; 
Enforcement account: 0; 
Operations support account: $57,776; 
Business Systems Modernization: 0; 
Total: $211,258; 
Projected enforcement revenue ROI for fiscal year 2017: 0; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Prevent Identity Theft and Refund Fraud: 
Appropriation Account: 
Taxpayer services account: $13,900; 
Enforcement account: $16,971; 
Operations support account: $34,005; 
Business Systems Modernization: 0; 
Total: $64,876; 
Projected enforcement revenue ROI for fiscal year 2017: 0; 
Projected protected revenue ROI for fiscal year 2017: $22.4. 

Continue Migration from Aging Tax Administration Systems–Enhance 
Online Services: 
Appropriation Account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $829; 
Business Systems Modernization: $15,679; 
Total: $16,508; 
Projected enforcement revenue ROI for fiscal year 2017: 0; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Address Impact of Patient Protection and Affordable Care Act (PPACA) 
Statutory Requirements: 
Appropriation Account: 
Taxpayer services account: 0; 
Enforcement account: $36,574; 
Operations support account: $19,525; 
Business Systems Modernization: 0; 
Total: $56,099; 
Projected enforcement revenue ROI for fiscal year 2017: $2.3; 
Projected protected revenue ROI for fiscal year 2017: 14.0. 

Implement Information Technology (IT) Changes to Deliver Tax Credits 
and Other Requirements: 
Appropriation Account: 
Taxpayer services account: 0; 
Enforcement account: 0; 
Operations support account: $305,645; 
Business Systems Modernization: 0; 
Total: $305,645; 
Projected enforcement revenue ROI for fiscal year 2017: 0; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Non-Recur FY 2014 Additional Appropriation: 
Appropriation Account: 
Taxpayer services account: -$34,000; 
Enforcement account: 0; 
Operations support account: -$58,000; 
Business Systems Modernization: 0; 
Total: -$92,000; 
Projected enforcement revenue ROI for fiscal year 2017: n/a; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Maintaining Current Levels: 
Appropriation Account: 
Taxpayer services account: $46,483; 
Enforcement account: $105,719; 
Operations support account: $69,382; 
Business Systems Modernization: $1,593; 
Total: $223,177; 
Projected enforcement revenue ROI for fiscal year 2017: n/a; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Base Adjustment: 
Appropriation Account: 
Taxpayer services account: 
Enforcement account: -$29,221; 
Operations support account: -$29,221; 
Business Systems Modernization: 0; 
Total: 0; 
Projected enforcement revenue ROI for fiscal year 2017: 0; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Savings and efficiencies, net reinvestment: 
Appropriation Account: 
Taxpayer services account: -$18,786; 
Enforcement account: -$18,233; 
Operations support account: -$42,156; 
Business Systems Modernization: 0; 
Total: -$95,200; 
Projected enforcement revenue ROI for fiscal year 2017: n/a; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Total Request Before Cap Adjustment: 
Appropriation Account: 
Taxpayer services account: $2,317,633; 
Enforcement account: $5,133,988; 
Operations support account: $4,215,169; 
Business Systems Modernization: $330,210; 
Total: $11,997,000; 
Projected enforcement revenue ROI for fiscal year 2017: n/a; 
Projected protected revenue ROI for fiscal year 2017: 0. 

Legend: n/a = not applicable. 

ROI = return on investment. 

FY = Fiscal Year, 

Source: Fiscal year 2015 congressional justification for IRS. 

Note: Numbers may not add due to rounding. 

[End of table] 

[End of Appendix VI] 

Appendix VII: IRS Continues to Report Actual Return on Investment 
(ROI) Data for Three Enforcement Programs: 

Table 11: Actual Return on Investment (ROI) for Major IRS Enforcement 
Programs (Dollars in Millions): 

Enforcement program: Examination; 
Fiscal year 2010: 
Cost: $4,371; 
Revenue: $23,563; 
ROI: $5.4; 
Fiscal year 2011: 
Cost: $4,333; 
Revenue: $$18,924; 
ROI: $4.4; 
Fiscal year 2012: 
Cost: $4,232; 
Revenue: $14,476; 
ROI: $3.4; 
Fiscal year 2013: 
Cost: $3,965; 
Revenue: $16,662; 
ROI: $4.2. 

Enforcement program: Collection; 
Fiscal year 2010: 
Cost: $1,948; 
Revenue: $29,105; 
ROI: $14.9; 
Fiscal year 2011: 
Cost: $1,939; 
Revenue: $31,060; 
ROI: $16.0; 
Fiscal year 2012: 
Cost: $1,742; 
Revenue: $30,442; 
ROI: $17.5; 
Fiscal year 2013: 
Cost: $1,660; 
Revenue: $31,396; 
ROI: $18.9. 

Enforcement program: Automated Underreporter; 
Fiscal year 2010: 
Cost: $262; 
Revenue: $4,924; 
ROI: $18.8; 
Fiscal year 2011: 
Cost: $270; 
Revenue: $5,245; 
ROI: $19.4; 
Fiscal year 2012: 
Cost: $267; 
Revenue: $5,269; 
ROI: $19.7; 
Fiscal year 2013: 
Cost: $258; 
Revenue: $5,287; 
ROI: $20.5. 

IRS total: 
Fiscal year 2010: 
Cost: $6,581; 
Revenue: $57,592; 
ROI: $8.8; 
Fiscal year 2011: 
Cost: $6,543; 
Revenue: $55,229; 
ROI: $8.4; 
Fiscal year 2012: 
Cost: $6,242; 
Revenue: $50,187; 
ROI: $8.0; 
Fiscal year 2013: 
Cost: $5,883; 
Revenue: $53,345; 
ROI: $9.1. 

Source: Fiscal year 2015 congressional justification for IRS.Note: 
Numbers may not add due to rounding. 

[End of table] 

For the fiscal year 2015 congressional justification, IRS continued to 
calculate direct actual ROI for the Examination, Collection, and 
Automated Underreporterprograms, but has not completed this 
calculation for other programs or at lower levels.

IRS is not yet able to calculate average or marginal direct actual ROI 
of new enforcement program initiatives, but is in the process of 
completing a feasibility study to identify steps necessary to measure 
actual revenue and ROI for new enforcement initiatives. 

IRS will continue to use revenue protection and revenue enhancement 
ROI projections. 

[End of Appendix VII] 

Appendix VIII: IRS Estimated Future ROI for New Enforcement 
Initiatives: 

Figure 13: Prevent Identity Theft and Refund Fraud (Protected Revenue): 

[Refer to PDF for image: vertical bar and line graph] 

Dollars in Millions: 

Fiscal year 2015: 
Cost: $64.9; 
Revenue: $548.0; 
ROI: 8.4. 

Fiscal year 2016: 
Cost: $65.4; 
Revenue: $1,097.0; 
ROI: 16.8. 

Fiscal year 2017: 
Cost: $65.3; 
Revenue: $1,462.0; 
ROI: 22.4. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 14: Address Impact of Affordable Care Act Statutory 
Requirements (Protected Revenue: 

[Refer to PDF for image: vertical bar and line graph] 

Dollars in Millions: 

Fiscal year 2015: 
Cost: $4.4; 
Revenue: $22.2; 
ROI: 5.0. 

Fiscal year 2016: 
Cost: $5.1; 
Revenue: $57.2; 
ROI: 11.2

Fiscal year 2017: 
Cost: $5.1; 
Revenue: $71.5; 
ROI: 14.0. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 15: Expand Audit Coverage (Protected Revenue): 

[Refer to PDF for image: vertical bar and line graph] 

Dollars in Millions: 

Fiscal year 2015: 
Cost: $4.5; 
Revenue: $33.8; 
ROI: 7.5. 

Fiscal year 2016: 
Cost: $5.2; 
Revenue: $85.3; 
ROI: 16.4. 

Fiscal year 2017: 
Cost: $5.2; 
Revenue: $106.6; 
ROI: 20.5. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 16: Address Impact of Affordable Care Act Statutory 
Requirements (Enforcement Revenue): 

[Refer to PDF for image: vertical bar and line graph] 

Dollars in Millions: 

Fiscal year 2015: 
Cost: $51.7; 
Revenue: $50.2; 
ROI: 1.0. 

Fiscal year 2016: 
Cost: $56.3; 
Revenue: $94.9; 
ROI: 1.7. 

Fiscal year 2017: 
Cost: $55.9; 
Revenue: $129.2; 
ROI: 2.3. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 17: Expand Audit Coverage (Enforcement Revenue): 

[Refer to PDF for image: vertical bar and line graph] 

Dollars in Millions: 

Fiscal year 2015: 
Cost: $93.3; 
Revenue: $210.0; 
ROI: 2.3. 

Fiscal year 2016: 
Cost: $100.7; 
Revenue: $511.2; 
ROI: 5.1. 

Fiscal year 2017: 
Cost: $94.8; 
Revenue: $674.3; 
ROI: 7.1. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 18: Address International and Offshore Compliance Issues 
(Enforcement Revenue)

[Refer to PDF for image: vertical bar and line graph] 

Dollars in Millions: 

Fiscal year 2015: 
Cost: $56.8; 
Revenue: $87.5; 
ROI: 1.5. 

Fiscal year 2016: 
Cost: $63.2; 
Revenue: $194.0; 
ROI: 3.1. 

Fiscal year 2017: 
Cost: $60.9; 
Revenue: $292.8; 
ROI: 4.8. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 19: Expand Coverage of High Wealth Individuals and Enterprises 
(Enforcement Revenue): 

Dollars in millions: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year 2015: 
Cost: $21.0; 
Revenue: $78.4; 
ROI: 3.7. 

Fiscal year 2016: 
Cost: $23.0; 
Revenue: $159.9; 
ROI: 7.0. 

Fiscal year 2017: 
Cost: $21.6; 
Revenue: $243.9; 
ROI: 11.3. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 20: Enhance Collection Coverage (Enforcement Revenue): 

Dollars in Millions: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year 2015: 
Cost: $66.8; 
Revenue: $174.6; 
ROI: 2.6. 

Fiscal year 2016: 
Cost: $73.4; 
Revenue: $489.0; 
ROI: 6.7. 

Fiscal year 2017: 
Cost: $72.6; 
Revenue: $616.8; 
ROI: 8.5. 

[End of figure] 

Figure 21: Improve Coverage of Partnerships and Flow-Through Entities 
(Enforcement Revenue): 

Dollars in Millions: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year 2015: 
Cost: $36.5; 
Revenue: $84.4; 
ROI: 2.3. 

Fiscal year 2016: 
Cost: $41.3; 
Revenue: $174.8; 
ROI: 4.2. 

Fiscal year 2017: 
Cost: $39.6; 
Revenue: $267.8; 
ROI: 6.8. 

Source: GAO analysis of IRS data. 

[End of figure] 

Figure 22: Leverage Data to Improve Case Selection (Enforcement 
Revenue): 

Dollars in Millions: 

[Refer to PDF for image: vertical bar and line graph] 

Fiscal year 2015: 
Cost: $36.8; 
Revenue: $0.0; 
ROI: 0.0. 

Fiscal year 2016: 
Cost: $36.8; 
Revenue: $63.0; 
ROI: 1.6. 

Fiscal year 2017: 
Cost: $38.6; 
Revenue: $75.4; 
ROI: 2.0. 

Source: GAO analysis of IRS data. 

[End of figure] 

[End of Appendix VIII] 

Appendix IX: Patient Protection and Affordable Care Act (PPACA)[!] 
Spending, Fiscal Years 2010 through 2012: 

Table 12: Patient Protection and Affordable Care Act (PPACA) Spending, 
Fiscal Years 2010 through 2012 (in Millions): 

PPACA Initiative: Administer new fees on drug manufacturers and health 
insurers; 
FY 2010 actual: $0.3; 
FY 2011 actual: $0.7; 
FY 2012 actual: $1.1; 
Total: $2.1

PPACA Initiative: Strengthen oversight of exempt hospitals; 
FY 2010 actual: $0.4; 
FY 2011 actual: $4.5; 
FY 2012 actual: $4.0; 
Total: $9.0

PPACA Initiative: Promoting compliance with other new provisions; 
FY 2010 actual: $0.8; 
FY 2011 actual: $11.6; 
FY 2012 actual: $8.3; 
Total: $20.8

PPACA Initiative: Program management; 
FY 2010 actual: $0.1; 
FY 2011 actual: $8.4; 
FY 2012 actual: $17.9; 
Total: $26.4

PPACA Initiative: Support of implementation of taxpayerissues (e.g. 
Counsel, Appeals); 
FY 2010 actual: $2.4; 
FY 2011 actual: $5.0; 
FY 2012 actual: $5.2; 
Total: $12.5. 

PPACA Initiative: Customerservice support (outreach, phones, and other 
support); 
FY 2010 actual: $1.3; 
FY 2011 actual: $6.0; 
FY 2012 actual: $4.7; 
Total: $12.0. 

PPACA Initiative: Information technology, operations, and support and 
infrastructure, deliver new tax credits and individual coverage 
requirement; 
FY 2010 actual: $15.3; 
FY 2011 actual: $131.9; 
FY 2012 actual: $258.0; 
Total: $405.2

PPACA Initiative: Total; 
FY 2010 actual: $20.7; 
FY 2011 actual: $168.2; 
FY 2012 actual: $299.2; 
Total: $488.1. 

Legend: FY = fiscal year. 

Source: Fiscal year 2014 congressional justification for IRS. 

Notes: PPACA was enacted on March 23, 2010. IRS received funding for 
PPACA implementation activities from the Department of Health and 
Human Services' Health Insurance Reform Implementation Fund in fiscal 
years 2010 to 2012. Numbers may not add to due rounding. 

[1] PPACA, Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010), as 
amended by the Health Care and Education Reconciliation Act (HCERA), 
Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 2010). All references to 
PPACA include amendments by HCERA. 

[End of table] 

End of Appendix IX] 

Appendix X: PPACA Spending and Request by Account and Initiatives, 
Fiscal Years 2013 through 2015: 

Table 13: PPACA Spending and Request by Account and Initiative (in 
Millions): 

PPACA initiative: Improve taxpayer service and meet increased demand 
(PPACA portion of initiative); 
Taxpayer Services: 
FY 2013 actual: $3.8; 
FY2014 requested: $70.3; 
FY 2015 requested: $58.2; 
Enforcement: 
FY 2013 actual: $0; 
FY2014 requested: $3.2; 
FY 2015 requested: $0; 
Operations Support: 
FY 2013 actual: $0; 
FY2014 requested: $16.0; 
FY 2015 requested: $15.7; 
Total: 
FY 2013 actual: $3.8; 
FY2014 requested: $89.5; 
FY 2015 requested: $73.9. 

PPACA initiative: Address impact of PPACA statutory requirements; 
Taxpayer Services: 
FY 2013 actual: $0.5; 
FY2014 requested: $1.1; 
FY 2015 requested: $0; 
Enforcement: 
FY 2013 actual: $19.3; 
FY2014 requested: $26.1; 
FY 2015 requested: $36.6; 
Operations Support: 
FY 2013 actual: $11.8; 
FY2014 requested: $17.2; 
FY 2015 requested: $19.5; 
Total: 
FY 2013 actual: $31.6; 
FY2014 requested: $44.4; 
FY 2015 requested: $56.1. 

PPACA initiative: Implement IT changes to deliver tax credits and 
other requirements; 
Taxpayer Services: 
FY 2013 actual: $0; 
FY2014 requested: $0; 
FY 2015 requested: $0; 
Enforcement: 
FY 2013 actual: $0; 
FY2014 requested: $0; 
FY 2015 requested: $0; 
Operations Support: 
FY 2013 actual: $248.6; 
FY2014 requested: $305.6; 
FY 2015 requested: $305.6; 
Total: 
FY 2013 actual: $248.6; 
FY2014 requested: $305.6; 
FY 2015 requested: $305.6. 

PPACA initiative: Expand telecom infrastructure to handle increased 
demand; 
Taxpayer Services: 
FY 2013 actual: $0; 
FY2014 requested: $0; 
FY 2015 requested: $0; 
Enforcement: 
FY 2013 actual: $0; 
FY2014 requested: $0; 
FY 2015 requested: $0; 
Operations Support: 
FY 2013 actual: $0; 
FY2014 requested: $0; 
FY 2015 requested: $16.0; 
Total: 
FY 2013 actual: $0; 
FY2014 requested: $0; 
FY 2015 requested: $16.0. 

PPACA initiative: Total PPACA budget request; 
Taxpayer Services: 
FY 2013 actual: $4.3; 
FY2014 requested: $71.4; 
FY 2015 requested: $58.2; 
Enforcement: 
FY 2013 actual: $19.3; 
FY2014 requested: $29.3; 
FY 2015 requested: $36.6; 
Operations Support: 
FY 2013 actual: $260.4; 
FY2014 requested: $338.8; 
FY 2015 requested: $356.9; 
Total: 
FY 2013 actual: $284; 
FY2014 requested: $439.6[A]; 
FY 2015 requested: $451.7. 

Source: IRS data on PPACA spending for fiscal year 2013 and fiscal 
years 2014 and 2015 congressional justifications for IRS. 

Notes: IRS did not receive funding for PPACA implementation activities 
in fiscal years 2013 or 2014. IRS received funding from the Department 
of Health and Human Services in fiscal years 2010 to 2012. Numbers may 
not add due to rounding. 

[A] Actual total fiscal year 2014 PPACA spending through February 28, 
2014 is $59.2 million. 

[End of table] 

[End of Appendix X] 

Appendix XI: Summary of Major IT Investments: 

Total funding for all investments from fiscal years 2009 to 2015 is 
about $11 billion. 

Table 14: Summary of IRS's Major IT Investments (in Millions): 

Investment name: Account Management Services (AMS): Enhances customer 
support by providing applications that enable IRS employees to access, 
validate, and update individual taxpayer accounts on demand; 
Fiscal year 2014 appropriation[A]: $17; 
Actual obligations to date[B]: $11; 
Fiscal year 2015 projected life-cycle cost: $204; 
Projected useful life (year): 2017. 

Investment name: PatientProtection and Affordable Care Act (PPACA)[C]: 
Encompasses the planning, development, and implementation of IT 
systems needed to support IRS's tax administration responsibilities 
associated with the act[D]; 
Fiscal year 2014 appropriation[A]: $345; 
Actual obligations to date[B]: $651; 
Fiscal year 2015 projected life-cycle cost: $1.987; 
Projected useful life (year): 2018. 

Investment name: Customer Account Data Engine 2 (CADE 2): Provides 
timely access to authoritative individual taxpayer account information 
and enhances IRS's ability to address technology, security, financial 
material weaknesses, and long-term architectural planning and 
viability; 
Fiscal year 2014 appropriation[A]: $165; 
Actual obligations to date[B]: $687; 
Fiscal year 2015 projected life-cycle cost: $1,022; 
Projected useful life (year): 2020. 

Investment name: Electronic Fraud Detection System (EFDS): Assists in 
detecting fraud at the time that tax returns are filed in order to 
eliminate the issuance of fraudulent tax refunds; 
Fiscal year 2014 appropriation[A]: $16; 
Actual obligations to date[B]: $111; 
Fiscal year 2015 projected life-cycle cost: $162; 
Projected useful life (year): 2021. 

Investment name: e-Services (e-SVS): Comprises several web-based self-
assisted services that are intended to allow authorized individuals to 
do business with the IRS electronically; 
Fiscal year 2014 appropriation[A]: $11; 
Actual obligations to date[B]: $173; 
Fiscal year 2015 projected life-cycle cost: $207; 
Projected useful life (year): 2019. 

Investment name: Foreign Account Tax Compliance Act (FATCA): Intended 
to implement provisions of the Foreign Account Tax Compliance Act 
regarding financial institutions reporting to IRS information about 
financial accounts held by U.S. taxpayers, or foreign entities in 
which U.S. taxpayers hold a substantial ownership interest; 
Fiscal year 2014 appropriation[A]: $47; 
Actual obligations to date[B]: $17; 
Fiscal year 2015 projected life-cycle cost: $162; 
Projected useful life (year): 2020. 

Investment name: Implement Return Review Program (RRP) (Replaces 
EFDS): Currently under development, is intended to maximize fraud 
detection at the time that tax returns are filed to eliminate issuance 
of questionable refunds; 
Fiscal year 2014 appropriation[A]: $68; 
Actual obligations to date[B]: $103; 
Fiscal year 2015 projected life-cycle cost: $253; 
Projected useful life (year): 2020. 

Investment name: Individual Master File (IMF): Represents the 
authoritative data source for individual tax account data. All other 
IRS information systems that process IMF data depend on output from 
this source. This investment is a critical component of IRS's ability 
to process tax returns; 
Fiscal year 2014 appropriation[A]: $14; 
Actual obligations to date[B]: $82; 
Fiscal year 2015 projected life-cycle cost: $166; 
Projected useful life (year): 2019. 

Investment name: Information Reporting and Document Matching (IRDM): 
Intended to establish a new business information matching program in 
order to increase voluntary compliance and accurate income reporting; 
Fiscal year 2014 appropriation[A]: $23; 
Actual obligations to date[B]: $70; 
Fiscal year 2015 projected life-cycle cost: $186; 
Projected useful life (year): 2019. 

Investment name: Integrated Customer Communication Environment (ICCE): 
Includes several projects that are intended to simplify voluntary 
compliance using voice response, Internet, and other computer 
technology such as the Modernized Internet Employee Identification 
Number, which allows third parties to act on the behalf of taxpayers; 
Fiscal year 2014 appropriation[A]: $15; 
Actual obligations to date[B]: $482; 
Fiscal year 2015 projected life-cycle cost: $524; 
Projected useful life (year): 2019. 

Investment name: Integrated Data Retrieval System (IDRS): Intended to 
provide systemic review, improve consistency in case control, 
alleviate staffing needs, issue notices to taxpayers, and allow 
taxpayers to see status of refunds. It is a mission-critical system 
used by 60,000 IRS employees; 
Fiscal year 2014 appropriation[A]: $18; 
Actual obligations to date[B]: $202; 
Fiscal year 2015 projected life-cycle cost: $336; 
Projected useful life (year): 2020. 

Investment name: Integrated Financial System/CORE Financial System 
(IFS): Used by IRS for budget, payroll, accounts payable/receivable, 
general ledger functions, and financial reporting; also used toreport 
on the cost of operations and to manage budgets by fiscal year; 
Fiscal year 2014 appropriation[A]: $15; 
Actual obligations to date[B]: $414; 
Fiscal year 2015 projected life-cycle cost: $494; 
Projected useful life (year): 2019. 

Investment name: Integrated Submission and Remittance Processing 
System (ISRP): Processes paper tax returns, and updates tax forms to 
comply with tax law changes; 
Fiscal year 2014 appropriation[A]: $10; 
Actual obligations to date[B]: $143; 
Fiscal year 2015 projected life-cycle cost: $188; 
Projected useful life (year): 2019. 

Investment name: IRS End User Systems and Services (EUSS): Supports 
products and services necessary for daily functions for over 100,000 
IRS employees at headquarters and field sites; 
Fiscal year 2014 appropriation[A]: $182; 
Actual obligations to date[B]: $705; 
Fiscal year 2015 projected life-cycle cost: $1,933; 
Projected useful life (year): 2019. 

Investment name: IRS Main Frames and Servers Services and Support 
(MSSS): Intended to support the design, development, and deployment of 
server storage infrastructures, software, databases, and operating 
systems; 
Fiscal year 2014 appropriation[A]: $406; 
Actual obligations to date[B]: $4,094; 
Fiscal year 2015 projected life-cycle cost: $7,317; 
Projected useful life (year): 2019. 

Investment name: IRS Telecommunications Systems and Support (TSS): 
Supports IRS's broad and local network infrastructure such as servers, 
and switches for voice, data, and video servicing of about 1,000 IRS 
sites; 
Fiscal year 2014 appropriation[A]: $302; 
Actual obligations to date[B]: $1,007; 
Fiscal year 2015 projected life-cycle cost: $2,388; 
Projected useful life (year): 2019. 

Investment name: IRS.Gov-Portal Environment Provides web-based 
services such as tax filing and refund tracking, to internal and 
external users, such as IRS employees and other government agencies, 
taxpayers, and business partners; 
Fiscal year 2014 appropriation[A]: $16; 
Actual obligations to date[B]: $487; 
Fiscal year 2015 projected life-cycle cost: $651; 
Projected useful life (year): 2017. 

Investment name: Modernized e-File (MeF) Provides a secure web-based 
platform for electronic tax filing of individual and business tax and 
information returns by registered Electronic Return Originators; 
Fiscal year 2014 appropriation[A]: $40; 
Actual obligations to date[B]: $376; 
Fiscal year 2015 projected life-cycle cost: $639; 
Projected useful life (year): 2020. 

Service Center Recognition/Image Processing System (SCRIPS) Used as a 
data capture, management, and image storage system using high-speed 
scanning and digital imaging to convert data from the 940, 941, K-1, 
and paper returns from Information Returns Processing, into electronic 
format; 
Fiscal year 2014 appropriation[A]: $9; 
Actual obligations to date[B]: $157; 
Fiscal year 2015 projected life-cycle cost: $203; 
Projected useful life (year): 2019. 

Source: GAO's analysis of fiscal year 2015 congressional justification 
for IRS. 

[A] Fiscal year 2014 appropriation is the amount IRS plans to fund out 
of its own accounts (e.g., user fees and other budget accounts). 

[B] Actual obligations to date through fiscal year 2013. 

[C] IRS uses the acronym “ACA” to refer to the Patient Protection and 
Affordable Care Act in its reports.

[D] In this report, we are not evaluating the healthcare.gov 
initiative headed by the Centers for Medicare and Medicaid Services. 

[End of table] 

[End of Appendix XI] 

Appendix XII: GAO Conducted Analyses Related to 12 of 38 Legislative 
Proposals in the Fiscal Year 2015 Budget Request: 

Table 15: Legislative Proposals Related to Prior GAO Work (in 
Millions): 

IRS legislative proposals related to prior GAO work: Modify reporting 
of tuition expenses and scholarships of Form 1098-T, Tuition Statement; 
Projected revenues over 10 years: $606; 
Projected costs over 3 years: $0.2; 
Related GAO reports: GAO-10-225. 

IRS legislative proposals related to prior GAO work: Authorize the 
Department of Treasury to require additional information to be 
included in electronically filed Form 5500 annual reports and 
electronic filing of certain other employee benefit plan reports; 
Projected revenues over 10 years: No revenue effect; 
Projected costs over 3 years: $11.2; 
Related GAO reports: GAO-05-491. 

IRS legislative proposals related to prior GAO work: Increase 
certainty with respect to worker classification; 
Projected revenues over 10 years: $9,610; 
Projected costs over 3 years: $1.9; 
Related GAO reports: GAO-09-717. 

IRS legislative proposals related to prior GAO work: Require taxpayers 
who prepare their returns electronically, but file their returns on 
paper, to print their returns with a scannable code; 
Projected revenues over 10 years: No revenue effect; 
Projected costs over 3 years: $14.6; 
Related GAO reports: GAO-12-33. 

IRS legislative proposals related to prior GAO work: Allow IRS to 
absorb credit card processing fees for certain tax payments; 
Projected revenues over 10 years: $19; 
Projected costs over 3 years: $9.6; 
Related GAO reports: GAO-10-11. 

IRS legislative proposals related to prior GAO work: Provide IRS with 
greater flexibility to address correctable errors; 
Projected revenues over 10 years: $173; 
Projected costs over 3 years: $1.4; 
Related GAO reports: GAO-11-481. 

IRS legislative proposals related to prior GAO work: Provide 
whistleblowers with protection from retaliation; 
Projected revenues over 10 years: Negligible revenue effect; 
Projected costs over 3 years: $0; 
Related GAO reports: GAO-11-683. 

IRS legislative proposals related to prior GAO work: Provide stronger 
protection from improper disclosure of taxpayer information in 
whistleblower actions; 
Projected revenues over 10 years: No revenue effect; 
Projected costs over 3 years: $0; 
Related GAO reports: GAO-11-683. 

IRS legislative proposals related to prior GAO work: Add tax crimes to 
the Aggravated Identity Theft statute; 
Projected revenues over 10 years: Negligible revenue effect; 
Projected costs over 3 years: $0; 
Related GAO reports: GAO-13-132T. 

IRS legislative proposals related to prior GAO work: Impose a civil 
penalty on tax identity theft crimes; 
Projected revenues over 10 years: Negligible revenue effect; 
Projected costs over 3 years: $2.7; 
Related GAO reports: GAO-13-132T. 

IRS legislative proposals related to prior GAO work: Explicitly 
provide that the Department of Treasury and IRS have authority to 
regulate all paid return preparers; 
Projected revenues over 10 years: Negligible revenue effect; 
Projected costs over 3 years: Not available; 
Related GAO reports: GAO-14-467T, GAO-08-781. 

IRS legislative proposals related to prior GAO work: Rationalize tax 
return filing due dates so they are staggered; 
Projected revenues over 10 years: $2,581; 
Projected costs over 3 years: Not available; 
Related GAO reports: GAO-13-515. 

Source: GAO analysis based on IRS fiscal year 2015 congressional 
justification and Department of the Treasury, General Explanations of 
the Administration's Fiscal Year 2015 Revenue Proposals(Washington, 
D.C.: March 2014). 

[End of table] 

[End of Appendix XII] 

Appendix XIII: Implementing Open Matters for Congress and 
Recommendations to IRS Could Result in Financial Benefits: 

We highlighted several areas where IRS could achieve cost savings and 
revenue enhancements in our reports on duplication, overlap, and 
fragmentation.[1] 

As of March 2014, 37 GAO products contain 10 matters for Congress and 
72 recommendations to IRS with a potential financial benefit. In 
addition, we have made multiple recommendations that could improve IRS 
operations if implemented. 

Since March 2013, 34 recommendations were implemented. 

Figure 23: Recommendations to IRS and Open Matters for Congress with a 
Financial Benefit: 

[Refer to PDF for image: vertical bar graph] 

Number of matters and recommendations: IRS; 
Indirect financial benefit: 37; 
Increase savings and revenue: 6; 
Increase savings: 14; 
Increase revenue: 15. 

Number of matters and recommendations: Congress; 
Indirect financial benefit: 0; 
Increase savings and revenue: 4; 
Increase savings: 1; 
Increase revenue: 5. 

Source: GAO analysis of GAO open recommendations. 

[1] See GAO, GAO, 2014 Annual Report: Additional Opportunities to 
Reduce Fragmentation, Overlap, and Duplication and Achieve Other 
Financial Benefits, [hyperlink, 
http://www.gao.gov/products/GAO-14-343SP (Washington, D.C.: Apr. 8, 
2014). 

[End of figure] 

[End of Appendix XIII] 

[End of briefing slides] 

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