Tax Administration:

Improved Staffing of IRS' Collection Function Would Increase Productivity

GGD-93-97: Published: May 5, 1993. Publicly Released: Jun 8, 1993.

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Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) collection of its accounts receivables, focusing on: (1) the growth of IRS delinquent accounts and return workload; (2) whether IRS staffing levels meet workload requirements; and (3) the deployment of IRS collection staff.

GAO found that: (1) although the IRS delinquent taxpayer workload has continued to expand, IRS has not been able to maximize its collection of delinquent tax debts, curb the growth of its accounts receivables, or balance its allocation of field office staff with its workload; (2) IRS staff and work-load imbalances have resulted in varying amounts of workload per year and occurred at different rates among IRS field offices; (3) IRS has been unable to correct staffing imbalances because its staff allocation system does not consider marginal productivity, uses single-year estimates rather than future economic conditions, and relies on staff growth and attrition to determine proper field office staffing levels; (4) IRS needs to develop a staffing methodology which sets appropriate staffing levels and eliminates staffing imbalances before implementing initiatives to modernize its tax systems; and (5) IRS needs to reconsider its decision to redefine and distribute collection activities among field offices.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: IRS is exploring the possibility of deploying staff across district lines from no-growth districts to growth districts to reduce inventories in the growth districts. IRS is also considering balancing workload by moving some of its special-procedures activities to key districts or to other collection functions. According to IRS, the reorganization of the Compliance function has resulted in the transfer to Collection budget and research analysts who were to study some additional corrective actions. As a result, the Collection function indicates that it has neither the expertise or resources to complete work on this broad recommendation.

    Recommendation: The Commissioner of Internal Revenue should direct the Assistant Commissioner (Collection) to develop a plan for ensuring that the Collection staff in field offices is balanced to maximize the assessment and collection of delinquent taxes. The plan should include the use of marginal productivity indicators and multiyear economic forecasts in the methodology for determining the number of staff each field office should have. This will enable IRS to improve its ability to measure staffing imbalances. Further, the plan should provide a means for Collection to assess the impact of planned future technological, strategic, and organizational changes on Collection staffing needs and, if appropriate, to modify its plan on the basis of that assessment. Finally, the plan should include strategies for transferring Collection employees to other functions as a means of eliminating staffing imbalances.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: According to IRS, management regularly monitors the "growth/no growth" status of district offices to ensure these designations accurately reflect current workload and staffing requirements. For example, during FY 1994, the number of districts designated as "no growth" decreased from 41 to 35. IRS believes that this is indicative of the progress it has made in improving the balance of workload and staffing nationally. IRS continues to believe that it is not in its best interest to involuntarily locate employees from "no growth" to "growth" districts.

    Recommendation: The Commissioner of Internal Revenue should reconsider the IRS decision not to transfer Collection staff among field offices. In doing so, the Commissioner should consider the benefits to the federal government of the additional collections that will result from balancing workload and staffing. This option should only be considered as a last resort to eliminating staffing imbalances deemed unacceptable and, to the extent possible, should be voluntary to avoid potential disruptions to employees.

    Agency Affected: Department of the Treasury: Internal Revenue Service


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