Report Faults IRS Research Efforts

The Internal Revenue Service does not have a standardized process for monitoring the progress of its research projects, nor a way to validate the results or measure the impact of its research efforts on tax administration.

The Treasury Inspector General for Tax Administration conducted an audit to review whether the structure and management of the IRS’s research programs could be improved. The report noted that the IRS spent $93.2 million last fiscal year on research, but the agency does not have a systematic process to assess the effectiveness of its research. The IRS primarily assesses the impact by measuring customer satisfaction, but TIGTA noted that customer satisfaction is not the most relevant and effective business measure since it does not directly show whether IRS research projects contributed to the research programs’ mission of providing information that supports data-driven decisions by IRS management.

“The IRS does not have an effective process to monitor, validate and measure its research efforts,” said TIGTA Inspector General J. Russell George in a statement. “As a result, IRS management cannot fully assess the impact that its research programs have on improving taxpayer service, enhancing the enforcement of tax laws and assisting in the modernization of the IRS.”

The report recommended that the IRS develop and implement effective business measures to better assess whether research efforts achieve program objectives and to show the impact on tax administration. In response, the IRS said it would consider developing appropriate business measures and explore whether standardized measures are possible. TIGTA said, however, that it remains concerned that the IRS has not committed to establishing effective business measures.