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MSP #13: CORRESPONDENCE EXAMINATION

The IRS Has Overlooked the Congressional Mandate to Assign a Specific Employee to Correspondence Examination Cases, Thereby Harming Taxpayers

TAS Recommendations and IRS Responses

1
1.

TAS RECOMMENDATION #13-1

Analyze the additional work caused by the current approach taken in correspondence exam. Based on that review, develop procedures and staffing models that enable cases to be assigned to one employee once the taxpayer has contacted the IRS.

IRS RESPONSE TO RECOMMENDATION: As the NTA report noted, the congressional mandate was for IRS to “develop procedures to the extent practicable and if advantageous to the taxpayer to assign one IRS employee to handle a taxpayer’s matter until it is closed.”  Given the technology limitations and our paper centric program in Correspondence Exam, it is not practical to assign one employee to handle the taxpayer’s audit from beginning to end.  Our current approach to working corporate inventory is a more efficient process than assigning a case to one examiner once the taxpayer has contacted the IRS and the current procedures do not violate RRA 98. In the current process, the case is assigned to the first Tax Examiner who addresses the response, but may not remain with the initial Tax Examiner until resolution. If sufficient documentation is not received from the initial contact, the case is placed back in the automated system until subsequent correspondence is received or the case is self-assigned by the examiner who handled the taxpayer phone call or was assigned after the documentation was received or the case is closed. Eliminating extension routing of phone calls allows Correspondence Examination to provide one-stop service with most calls. The Correspondence Examination Toll Free Line allows taxpayers to contact an experienced assistor at any campus for immediate assistance, without having to wait for a returned call from an individually assigned examiner. This process allows for the most expeditious resolution of the case.  Additionally, as part of the Correspondence Exam Assessment Project, we are engaged in several activities to improve the correspondence exam experience.  Examples include plans to pilot Taxpayer Digital Communications (TDC)  to communicate with taxpayers through a secure portal and conducting a phone efficiency review to improve phone operations.  

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS’s responses indicate it is misinterpreting or ignoring the congressional intent behind RRA 98 §3705(b).  The IRS disagrees with recommendations, concluding they are not practicable, without analyzing whether they are advantageous for the taxpayer.  The IRS cites no data or pilots to show assigning one employee is not more efficient nor any analysis to show the current process is compliant with RRA 98.  Meanwhile, TIGTA, the NTA, and the GAO have all heavily criticized the current IRS correspondence examination processes for inadequately delivering taxpayer service.  The IRS needs to revisit its analysis from a taxpayer’s perspective and balance the practicability of suggested changes with the impact on taxpayer rights.  Congress intended to decrease the burden for taxpayers who had a difficult time resolving their cases because they could not reach the appropriate IRS employee.  As noted in the Most Serious Problem, the same problems facing taxpayers in 1998 continue to burden taxpayers today.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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2.

TAS RECOMMENDATION #13-2

Allow the taxpayer to individually choose service options to his or her advantage, such as leaving a voicemail for the employee owning the case or speaking with the next available employee.

IRS RESPONSE TO RECOMMENDATION: As the NTA report noted, the congressional mandate was for IRS to “develop procedures to the extent practicable and if advantageous to the taxpayer to assign one IRS employee to handle a taxpayer’s matter until it is closed.” Given the technology limitations and our paper centric program in Correspondence Exam, it is not practical to assign one employee to handle the taxpayer’s audit from beginning to end. However, to provide better customer service and a more expedient case resolution, when taxpayers call the Correspondence Examination Toll Free Line, their call is routed to the next available assistor. The assistor is experienced, has access to case history, and will work with the taxpayer toward resolution. If at the end of the call, the taxpayer is not satisfied, they have the option to have the assigned Tax Examiner return their call.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS cites technology limitations as a reason why it cannot comply with the congressional mandate.  The IRS response indicates it views providing the next available employee as an efficient way to work cases.  Since the IRS has not studied the costs associated with problems the automated system has created in correspondence examination, it is difficult to determine efficiency in working all cases. Perhaps assigning an employee to certain correspondence exam cases, even if it takes longer for a return phone call to occur, will benefit taxpayers and the IRS in the long run. The IRS also asserts assigning the next available employee resolves most cases in a one-stop fashion; however, it does not provide any data or analysis to support this assertion. In FY 2016, TAS will analyze the “one-stop” effectiveness of the IRS’s correspondence examination cases.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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3.

TAS RECOMMENDATION #13-3

Design extension routing capabilities to enable taxpayers to reach the employee assigned to their cases.

IRS RESPONSE TO RECOMMENDATION: As the NTA report noted, the congressional mandate was for IRS to “develop procedures to the extent practicable and if advantageous to the taxpayer to assign one IRS employee to handle a taxpayer’s matter until it is closed.”  Given the technology limitations and our paper centric program in Correspondence Exam, it is not practical to assign one employee to handle the taxpayer’s audit from beginning to end. We would not want to design extension routing capabilities to enable taxpayers to reach the employee assigned to their cases. In the past, we’ve found in the automated correspondence environment that when the taxpayers left voice mails the calls were not returned within the previous requirement of 24 hours. Examiners were not able to timely return the taxpayer calls because of handling other calls, working cases, using leave, performing other non-casework activities or due to their tour of duty. To improve customer service for the telephones, corporate call routing (Intelligent Contact Management – ICM) was fully implemented in 2009 for Correspondence Examination. Extensive training was provided to all examiners on all audit issues enabling them to effectively respond to telephone calls. Calls were routed to the next available examiner eliminating the need for taxpayers to leave messages. The Correspondence Examination Toll Free Line allows taxpayers to contact an experienced assistor at any campus for immediate assistance, without having to wait for a returned call from an individually assigned examiner. This process allows for the most expeditious case resolution.

CORRECTIVE ACTION: N/A

TAS RESPONSE: Given the Commissioner’s recent prediction that the phone level of service for all of FY 2015 would be approximately 40 percent, and the acknowledgment that taxpayers may have to wait 30 minutes or more before reaching an assistor, it is even more important for the IRS to have cases assigned to a specific employee once the taxpayer has contacted the IRS or at least help route taxpayers to the right IRS employee or office. With such low levels of service on the phone lines, taxpayers must commit a large amount of time and money to wait on hold for the next available employee, who is not always the right one for assistance. For instance, case histories are not always written clearly, and return calls are not always made to the taxpayer. Of course, this assumes the taxpayer is able to get through to an IRS employee.

The IRS cites a previous inability of correspondence examination employees to return taxpayer calls within the required 24 hours to justify the current examination process. The IRS explains calls could not be returned within 24 hours because the employees were handling other calls, working cases, taking leave time, etc. However, the IRS could provide taxpayers with a choice. Perhaps some taxpayers would rather wait longer for a response if the response is coming from the employee working their case.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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4.

TAS RECOMMENDATION #13-4

Include an option for single employee assignment in all technology developments, including VSD.

IRS RESPONSE TO RECOMMENDATION: As the NTA report noted, the congressional mandate was for IRS to “develop procedures to the extent practicable and if advantageous to the taxpayer to assign one IRS employee to handle a taxpayer’s matter until it is closed.” Given the technology limitations and our paper centric program in Correspondence Exam, it is not practical to assign one employee to handle the taxpayer’s audit from beginning to end therefore, we do not concur with this recommendation.  However, we are evaluating options to communicate and resolve specific taxpayer issues through technology. Virtual Service Deliver (VSD) is a good example of multiple employees resolving a single case. Through VSD, cases were successfully resolved even though the person conducting the VSD appointment was not always the person previously assigned the audit.   We are also planning to pilot “Taxpayer Digital Communications” which will allow communications to taxpayers through a secure portal.  Similar to VSD, it is envisioned that multiple examiners may be involved to expedite case resolution.

CORRECTIVE ACTION: N/A

TAS RESPONSE: While we are pleased the IRS is evaluating new technological tools such as Virtual Service Delivery and is planning to pilot Taxpayer Digital Communications, which will allow communications to taxpayers through a secure portal, the National Taxpayer Advocate remains concerned the IRS is not willing to provide an option for taxpayers to communicate with a specific employees assigned to a case. Having multiple employees work a case creates a culture where no one employee is accountable for how the case is handled. Employees may do just what is required of them at any given moment, but no one is vested in fully helping the taxpayer navigate the process and come to a resolution. The IRS response does not address this lack of accountability, but based on assumed short-term efficiencies already discredited by the GAO and TIGTA, the IRS  disregards the suggestions provided by TAS to address the problem. The National Taxpayer Advocate encourages the IRS to observe the congressional mandate, which will result in real efficiencies for the IRS – and benefits to taxpayers.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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