Taxpayer Service: IRS Could Improve the Taxpayer Experience by Using Better Service Performance Measures
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.
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.
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.
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.
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) |
IRS generally agreed with the recommendation. In its January 2021 Taxpayer First Act Report to Congress, IRS 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. As of March 2022, IRS officials said that the fiscal year 2022-2026 IRS Strategic Plan being developed would include strategic goals and objectives and agency-wide and division performance goals that align with IRS's service goals for improving the taxpayer experience. The Plan, which was published in July 2022, set forth two strategic goals to provide a better service experience, but did not identify agency-wide and division performance goals for improvements in the taxpayer experience that align with those strategic goals. As of January 2023, IRS officials said they were working to connect strategic goals and objectives of the Treasury and IRS Strategic Plan to the IRS Taxpayer Experience Strategy; and to connect these strategic priorities to Inflation Reduction Act service-related priorities. Without performance goals, IRS divisions that provide services to taxpayers do not have a clear picture of what specific actions would improve the taxpayer experience and would align with IRS's higher-level strategic goal and objectives for serving taxpayers. Nor do managers and staff responsible for taxpayer service clearly know how their day-to-day activities can help ensure a focus on improving the taxpayer experience and achieving IRS's mission to provide taxpayers top-quality service. We will update this status after we complete review of any IRS documentation on the timing of specific actions taken or planned to implement the recommendation, as we requested that IRS provide in August 2023.
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| Internal Revenue Service |
Priority Rec.
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) |
IRS generally agreed with this recommendation. IRS's January 2021 Taxpayer First Act Report to Congress did not link measures with targets to performance goals aligned with strategic goals for improving taxpayer services. As of March 2022, IRS officials said that the fiscal year 2022-2026 IRS Strategic Plan being developed would include strategic goals, objectives, and supporting measures for agency-wide and division performance goals that align with IRS's taxpayer service goals. The Plan, which was published in July 2022, set forth two strategic goals to provide a better service experience. However, the Plan did not identify agency-wide and division performance goals for improvements in the taxpayer experience and specify their related measures with targets. As of January 2023, IRS said it was using the measures framework in the Taxpayer First Act Report to Congress as a foundation and would identify agency-wide and division performance goals iteratively over fiscal years 2023 and 2024, but it was not clear when actions would be complete. Without clear linkages between performance measures and related performance goals, IRS managers and staff who provide taxpayer service lack roadmaps showing how their daily activities can contribute to goals that relate to improving the taxpayer experience. Without targets for the measures, IRS is challenged to know whether performance is improving to desired levels. We will update this status after we complete review of any IRS documentation on the timing of specific actions taken or planned to implement the recommendation, as we requested that IRS provide in August 2023.
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| 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) |
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 planned 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 initially said it planned to implement our recommendation by January 2022. As of January 2023, IRS officials described steps underway, but it was not clear when actions would be complete. We will update this status after we complete review of any documentation on the timing of specific actions taken or planned to implement the recommendation, as we requested that IRS provide in August 2023. Such documented actions should allow us to 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.
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| 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) |
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 planned 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 initially said it planned to implement our recommendation by January 2022. As of January 2023, IRS officials described steps underway to map taxpayer journeys, but it was not clear when actions would be complete. We will update this status after we complete review of any IRS documentation on specific actions taken or planned to implement the recommendation, as we requested that IRS provide in August 2023.
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| 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) |
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. As of January 2023, IRS said it planned to assess the first batch of customer experience measures and establish baselines and targets by mid-fiscal year 2024. Furthermore, IRS said it planned to assess findings from previous reporting and integrate this work into improving existing measures, as well as developing new customer experience measures, in the second half of fiscal year 2024. We will update this status after we complete review of any IRS documentation on actions taken to implement it.
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| 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) |
IRS agreed with this recommendation. In response, IRS updated Internal Revenue Manual (IRM) 1.5.1 performance measures guidance to include references to OMB's customer experience guidance. In January 2023, IRS officials described IRS's process for developing its budget request. However, it is not clear how the revised guidance, or the description of the budget development process, documents how IRS will use performance data to make resource allocation decisions that improve the taxpayer experience. A key reason that IRS has not clearly identified a process to guide these resource decisions to improve taxpayer experience is that IRS has not established performance goals with measures and targets for experience. Without that performance information, IRS cannot analyze the gap between actual and target performance for taxpayer experiences and identify actions to improve the experience to target levels. Without such a process, IRS cannot consider important issues in a rigorous manner needed to allocate limited resources. Further, without a process to use all available quantitative and qualitative data on alternate resource decisions, IRS risks not optimally balancing the resources across competing interests to help improve taxpayer experiences. We will update this status after we complete review of any IRS documentation on actions taken to implement the recommendation.
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| 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) |
IRS agreed with this recommendation. In July 2022, IRS said it updated the IRS.gov website to make its publicly reported performance measures more easily available, published its strategic plan for fiscal years 2022-2026, and posted its Budget in Brief and Congressional Justification for fiscal year 2023 to IRS.gov. However, this recommendation cannot be fully implemented until IRS implements earlier recommendations on the measures and analyzing performance against those measures. As noted in the status of those recommendations, it is not clear when actions to implement them will be complete. We will update this status after we complete review of any IRS documentation on actions taken to implement the recommendation.
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