Reeling from a series of budget cuts in recent years, the Internal Revenue Service has slashed the customer service functions at its walk-in offices, but did not evaluate the potential impact of reducing or eliminating key services at 386 Taxpayer Assistance Centers prior to implementing changes at those locations, according to a new government report.
The report, from the Treasury Inspector General for Tax Administration, found that the IRS eliminated or reduced tax return preparation, tax law assistance, refund inquiries and transcript request services as part of its fiscal year 2014 “service approach.” However, prior to developing this plan, the IRS did not evaluate the burden each service change would have on taxpayers who visit the centers.
“The taxpayers most likely to visit Taxpayer Assistance Centers include low-income, elderly, and limited-English-proficient taxpayers who seek assistance in complying with the tax laws,” said TIGTA Inspector General J. Russell George in a statement. “It is important to evaluate the burden and impact that service cuts at these locations could have before taking action because many taxpayers rely on these centers to help them understand and meet their basic tax obligations.”
He noted that the IRS has also not established processes to identify the optimal locations where it should provide face-to-face services or to identify underserved areas that would benefit from virtual service via computer videoconference. In addition, the data available to IRS management for use in assessing potential site closures is based on incomplete information.
TIGTA initiated its audit to assess the IRS’s ability to provide effective and efficient service to taxpayers through its Taxpayer Assistance Center, or TAC, program. TIGTA found that the IRS has not adequately addressed two recommendations from previous TIGTA reports: It has not developed sufficient measures and goals for Facilitated Self-Assistance in the TACs. Facilitated Self-Assistance is a means for taxpayers seeking face-to-face services to learn and perform any task available on IRS.gov via public computer terminals located at selected TACs. In addition, controls to ensure that data are entered accurately into management information systems and reviewed were not implemented until after TIGTA’s review.
TIGTA recommended that the IRS ensure compliance with its own procedures, which require that service-related decisions be based on informed research. The IRS should also develop steps to be taken to collect data to monitor, measure, and adjust service changes, TIGTA suggested. In addition, the report recommended that the IRS finish its efforts to get data on the services that are most important to taxpayers; establish a methodology to identify the optimal locations for providing face-to-face assistance to the most taxpayers; develop and implement the necessary documentation requirements to support its data analyses; establish a process to identify the best locations for providing virtual face-to-face services; and quantify the cost savings and benefits related to Virtual Service Delivery. Virtual service allows taxpayers to use video and audio communication technology to have “virtual” face-to-face interactions with assistors in remote locations.
The IRS agreed with or indicated completion of four of TIGTA’s recommendations, but disagreed with three of the recommendations. For certain corrective actions that the IRS proposed or stated were already implemented, TIGTA said in the report it believes the IRS’s actions are insufficient. The lack of sufficient corrective action could, in turn, increase the burden on taxpayers who seek face-to-face assistance at the Taxpayer Assistance Centers such as low-income, elderly and limited-English-proficient taxpayers, TIGTA argued. The report contended that the IRS did not gather the necessary data and perform the required analysis to reduce the impact of service eliminations and reductions on these taxpayers.
In response to the report, the IRS pointed out that it is operating under budget constraints and the Taxpayer Assistance Centers are expensive to operate.
“Face-to-face contact is the most costly method of providing service to taxpayers,” wrote Debra S. Holland, commissioner of the IRS’s Wage and Investment Division. “In an era of reduced funding and increasing customer demand, the IRS cannot improve service delivery by increasing staffing. However, it can, and has, improved service delivery by making many of the services provided at TACs available online at IRS.gov, and by leveraging our relationships with other service providers. Each year, we review and update our priorities to ensure we are effectively and efficiently meeting the needs of taxpayers and tax professionals. While we have a number of avenues for serving taxpayers, our resources for providing direct services by telephone and face-to-face interaction are limited and will continue to remain so.”
The IRS pointed out that it needed to leverage technology such as video to operate more efficiently.
“Even in the best budget scenario, it would be impossible to answer every phone call or serve every taxpayer who visits a walk-in site,” Holland added. “Because serving taxpayers is important to the IRS we know that, given the current and expected future budget environment, we must depend even more on our technology-based services and our external partners than we have in the past. For this reason, the IRS implemented the Fiscal Year 2014 Service Approach to address these challenges. This approach does not eliminate service; rather, it directs taxpayers to the most cost-effective IRS or partner channel available, to provide the needed service. This allows the IRS to focus limited toll-free and walk-in resources on customer issues that can be best resolved with person-to¬ person interaction. By using this approach, we are able to improve our ability to serve, address, and resolve more complex matters, such as identity theft victim assistance and tax account issues.”