IRS Management:

IRS Faces Challenges as it Restructures the Office of the Taxpayer Advocate

GGD-99-124: Published: Jul 15, 1999. Publicly Released: Jul 15, 1999.

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Pursuant to a congressional request, GAO reviewed the operations of the Internal Revenue Service's (IRS) Office of the National Taxpayer Advocate and the Problem Resolution Program (PRP) that it administers, focusing on: (1) challenges the Taxpayer Advocate faces in managing program resources; (2) the potential effects of workload fluctuations on program operations; (3) information available to help the Advocate determine the causes of taxpayer problems and prevent their recurrence; and (4) the adequacy of performance measures the IRS uses to gauge program effectiveness.

GAO noted that: (1) there are various management and operational challenges facing IRS, the Advocate's Office, and PRP; (2) how these challenges are addressed could affect how efficiently and effectively taxpayers are helped by PRP; (3) the Advocate's Office faced resource management challenges because it lacked direct control over most PRP resources; (4) planned changes to the Advocate's Office and PRP, such as placing PRP resources under the control of the Advocate's Office, could mitigate some of these issues; (5) however, it is too early to evaluate the impact of these changes; (6) IRS faces challenges as it restructures the Advocate's Office to better handle variations in PRP's workload; (7) according to Advocate Office officials, in the past, because PRP operations depended on IRS functional units for resources, any fluctuations in PRP's workload were handled by adjusting the number of functional staff assigned to work PRP cases; (8) however, the Advocate's Office is moving away from a structure that relies on other IRS units for staffing, which may make it more difficult for the Advocate's Office to handle workload fluctuations, especially workload increases; (9) the Advocate told GAO that he was committed to helping any taxpayer who contacts the office; (10) while it is understandable why the Advocate's Office might not want to turn away anyone seeking help, accepting cases that could be handled elsewhere in IRS could overburden PRP; (11) the demands on the Advocate's Office to resolve individual taxpayer problems has left little time for staff to spend identifying the causes of recurring taxpayer problems and recommending solutions; (12) also, limitations in the kind of information available provided little assurance that the time being spent was being used most effectively; (13) these efforts on recurring problems, called advocacy, are key to the success of the Advocate's Office because the improvements they generate can reduce the number of taxpayers who ultimately require help from PRP; (14) IRS lacked adequate measures of the effectiveness of the Advocate's Office and PRP; (15) measures of effectiveness should cover the full range of Advocate Office operations so they can be used to improve program performance, increase accountability, and support decisionmaking; and (16) the set of measures used by the Advocate's Office during GAO's review focused on descriptive program events instead of program outcomes, did not provide complete data, or were not based on consistent data collection.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: As part of IRS' overall modernization, the Office of the Taxpayer Advocate redesigned its organization and processes. The redesign clearly separates responsibility for advocacy work from responsibility for casework and minimizes the likelihood that advocacy resources will be redirected to do casework. IRS says that it has developed a complexity/priority indicator to help in prioritizing and assigning advocacy projects and has established and filled the position of Senior Tracking System Analyst. The analyst is responsible for modifying and maintaining the Advocacy Project Tracking System. According to IRS, requirements for that system have been developed, including the content for several new Web-based reports and an on-line advocacy issue submission and tracking process.

    Recommendation: To better ensure that the Advocate's Office effectively uses the resources available for advocacy and thus enhances its ability to prevent the recurrence of taxpayer problems and ultimately reduce the number of taxpayers who need help from PRP, the Commissioner of Internal Revenue should direct appropriate officials to define the requirements for and to develop a system that captures the kind of information needed to identify and prioritize potential advocacy projects and provide feedback to staff on ongoing and completed projects.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: As part of IRS' modernization, the Office of the Taxpayer Advocate, like the rest of IRS, developed performance measures related to customer satisfaction, employee satisfaction, and business results. Baseline data for each of those measures is to be gathered during fiscal year 2001. IRS provided us with information on the specific measures adopted and the management information systems to which they are/will be linked.

    Recommendation: To better manage PRP resources and improve operations, the Commissioner of Internal Revenue should direct appropriate officials to design management information systems that can support outcome-oriented performance measures.

    Agency Affected: Department of the Treasury: Internal Revenue Service


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