Fast Facts

According to the IRS, providing top-quality service is a critical part of its mission. IRS plans call for improved taxpayer experiences and services.

However, the IRS doesn't have performance goals specifying the desired improvements. For example, one IRS division has broad plans to monitor the taxpayer experience and address identified issues. But it doesn't have performance goals with measures that would indicate whether the taxpayer experience had improved, e.g., a goal of reducing telephone assistance wait times by a specified amount.

Our 7 recommendations include that IRS identify taxpayer experience performance goals and measures.

Internal Revenue Service building

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Highlights

What GAO Found

The Internal Revenue Service's (IRS) mission and strategic plan state expectations for IRS to improve the taxpayer experience and services it provides. However, IRS and its divisions that manage programs serving the largest taxpayer groups—the Wage and Investment (W&I) and the Small Business/Self-Employed (SB/SE) divisions—did not have performance goals to specify the desired improvements. For example, W&I aligned its service programs to IRS's strategic objectives for taxpayer services that state broad types of management activities such as monitoring the taxpayer experience and addressing issues. However, it did not have performance goals that specify outcomes to improve the taxpayer experience, such as reducing taxpayer wait times for telephone assistance.

Because IRS and these two divisions do not have performance goals for improving the taxpayer experience, IRS does not have related performance measures. IRS has many performance measures—including more than 80 for W&I and SB/SE—for assessing the services it provides, such as related to timeliness and accuracy of information provided to taxpayers. However, these existing measures do not assess improvements to the taxpayer experience, such as whether tax processes were simpler or specific services met taxpayers' needs. The division-level measures also lack targets for improving the taxpayer experience. Further, the existing measures do not capture all of the key factors identified in Office of Management and Budget guidance for how customers experience federal services, including customer satisfaction and how easy it was to receive the services. As a result, IRS does not have complete information about how well it is satisfying taxpayers and improving their experiences.

IRS analyzes its taxpayer service measures to compare performance with targets but the analyses provide few insights and no recommendations to improve the taxpayer experience, such as to provide more timely tax filing guidance. Also, IRS does not have a process to use service measures to guide decisions on allocating resources to improve the taxpayer experience. As a result, IRS is challenged to use performance data to balance resource allocation for efforts to improve the taxpayer experience compared with other IRS efforts. Finally, IRS reports limited information to the public about performance related to the taxpayer experience for transparency and accountability.

The table below summarizes important management practices that IRS did not fully follow to provide taxpayers a top-quality service experience.

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Why GAO Did This Study

According to IRS, providing top-quality service is a critical part of its mission to help taxpayers understand and meet their tax responsibilities. Congress, the National Taxpayer Advocate, and the administration have recognized the importance of improving how taxpayers experience IRS services. Setting goals and objectives with related performance measures and targets are important tools to focus an agency's activities on achieving mission results.

GAO was asked to review IRS's customer service performance measures. This report assesses IRS's (1) goals and objectives to improve the taxpayer experience; (2) performance measures to support improved experiences; and (3) use of performance information to improve the experience, allocate resources, and report performance. To assess IRS's goals, measures, targets, and use of them, GAO compared IRS's practices to key practices in results-oriented management.

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Recommendations

GAO is making 7 recommendations, including that IRS identify performance goals, measures, and targets; as well as analyze performance; develop processes to make decisions on resources needed; and report performance on improving the taxpayer experience. IRS indicated that it generally agreed with the recommendations, but that details around their implementation were under consideration and would be provided at a later date.

Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service
Priority Rec.
This is a priority recommendation.
The Commissioner of Internal Revenue should identify agency-wide and division performance goals that align with IRS's strategic service goals and objectives for an improved taxpayer experience. (Recommendation 1)
Open
IRS generally agreed with the recommendation. In January 2021, IRS released a report to Congress that identified a new framework of strategic goals and objectives for improving the taxpayer experience and some high-level service performance measures with targets for improving the taxpayer experience. However, the report did not specify related performance goals aligned with strategic goals for assessing progress in improved taxpayer experience outcomes, particularly in the divisions that provide taxpayer services. Without performance goals, IRS cannot have a clear picture of what specific actions would improve the taxpayer experience. IRS would also be unable to determine the actions that would align with its strategic goal and objectives for providing top-quality service to taxpayers.
Internal Revenue Service
Priority Rec.
This is a priority recommendation.
The Commissioner of Internal Revenue should identify performance measures with targets for improving the taxpayer experience that link with the related performance goals. (Recommendation 2)
Open
IRS generally agreed with this recommendation. IRS's January 2021 report did not link measures with targets to performance goals aligned with strategic goals for improving taxpayer services. IRS plans to continue identifying new measures to inform efforts to improve the taxpayer experience. These new measures will also need targets. Without clear linkages between performance measures with targets and related performance goals, IRS managers and staff providing taxpayer services do not know how their day-to-day activities can contribute to improving the taxpayer experience. Without targets for the measures, it will be difficult for IRS to know whether performance is improving to desired levels.
Internal Revenue Service The Commissioner of Internal Revenue should ensure that the taxpayer experience measures cover all of the factors for customer service identified in OMB guidance as well as service channels across the tax process phases. (Recommendation 3)
Open
IRS agreed with this recommendation. In its January 2021 Taxpayer First Act Report, IRS discussed steps to transform the taxpayer experience with a strategy that encompasses all taxpayer transactions with the IRS throughout interactions with a product or service channel. IRS said it plans to establish a baseline framework to ensure taxpayer experience measures adhere to relevant OMB guidance by the end of calendar year 2021, and collaborate with OMB to ensure that adherence as the guidance evolves. IRS plans to implement our recommendation by January 2022. Once available, we will confirm whether IRS's measures for taxpayer experience cover the factors cited in OMB guidance and account for all of the service channels across the tax process phases.
Internal Revenue Service The Commissioner of Internal Revenue should ensure that taxpayer experience measures reflect the highest-impact taxpayer journeys and key transactions, as consistent with OMB guidance. (Recommendation 4)
Open
IRS agreed with this recommendation. In its January 2021 report, IRS identified 140 capabilities intended to cover all phases of the taxpayer journey, as defined in OMB guidance. IRS said it plans to establish a baseline analytical framework by the end of calendar year 2021 that uses IRS data and federal, state, and publicly available data to understand the highest-impact taxpayer journeys and key transactions. IRS plans to implement our recommendation by January 2022. We will continue to monitor IRS's progress in identifying high impact journeys and aligning its measures to the highest impact journeys and key transactions.
Internal Revenue Service The Commissioner of Internal Revenue should regularly analyze and use the results of the performance measures and surveys on the taxpayer experience to help improve performance. (Recommendation 5)
Open
IRS agreed with this recommendation. In its January 2021 Taxpayer First Act Report, IRS discussed a tiered framework of taxpayer experience measures. According to IRS, gathering and analyzing data from these measures can enable IRS to evaluate the progress of the taxpayer experience strategy and assess the degree of success in improving the taxpayer experience. IRS said the measures are to be reported and updated annually and will include baselines, targets (as appropriate) or projections, and sources, for a given fiscal year. IRS intends to use the results from analyzing the measures to inform decision-making for investment prioritization, resource allocation, and strategic direction under the newly created Taxpayer Experience Office, which is to determine how performance improvements can be implemented across IRS. Implementation of this recommendation depends on completion of the earlier recommendations on IRS's taxpayer experience objectives and measures as well as evidence that the analyses of results were used to improve performance.
Internal Revenue Service The Commissioner of Internal Revenue should develop processes for using performance results on the taxpayer experience as part of resource allocation decisions intended to improve performance. (Recommendation 6)
Open
IRS agreed with this recommendation. IRS plans to update Internal Revenue Manual (IRM) 1.5.1 performance measures guidance to include OMB's customer experience guidance. IRS plans to implement this recommendation by August 2021. When available, we will assess the extent to which the updated IRM section clarifies the process for using taxpayer experience performance results in allocating resources to improve the experience.
Internal Revenue Service The Commissioner of Internal Revenue should publicly report available information on taxpayer experience performance, including the measures and related targets, for example by providing it on IRS.gov and in IRS publications. (Recommendation 7)
Open
IRS agreed with this recommendation. IRS plans to update the IRS.gov website to make its publicly reported performance measures more easily available by July 2021. However, this recommendation cannot be fully implemented until IRS implements earlier recommendations on the measures and analyzing performance against those measures.

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