GAO Reports  
GAO/GGD-00-37 December 15, 1999

Tax Administration: IRS' 1999 Tax Filing Season

Pursuant to a congressional request, the GAO discussed the Internal Revenue Service's (IRS) performance during the 1999 tax filing season, focusing on: (1) telephone service; (2) availability of walk-in services; (3) other taxpayer service efforts; (4) Earned Income Credit (EIC) noncompliance; (5) electronic filing; (6) implementation of recent tax law changes; and (7) implementation of a new return and remittance processing system.

GAO noted that: (1) IRS met or exceeded its 1999 goals for several performance measures, but fell short of its goals in two key areas - taxpayers' ability to access IRS' toll-free telephone service and the quality of IRS' responses to taxpayers tax law questions; (2) certain features of IRS' methodology for measuring the quality of responses to tax law questions also warranted IRS' attention; (3) the timeliness of refunds for paper returns raised some questions about IRS' timeliness that IRS could not answer; (4) IRS attempted to improve telephone service in 1999, however, service did not improve, but deteriorated; (5) GAO's work indicated this deterioration resulted from (a) unrealistic assumptions about the implementation and impact of IRS' changes, and (b) other problems managing staff training and scheduling and implementing new technology; (6) IRS enhanced the availability of its walk-in services by increasing Saturday hours and making services more accessible to taxpayers who did not have convenient access to a walk-in office; (7) IRS did a better job of measuring walk-in customer satisfaction in 1999 than 1998; (8) however, IRS made little progress in measuring the quality and timeliness of its walk-in services; (9) use of IRS' World Wide Web site on the Internet increased significantly during the 1999 filing season, but IRS data pointed to problems with taxpayers getting answers to tax law questions via electronic mail; (10) IRS stopped millions of dollars in erroneous EIC claims in 1999 by validating social security numbers and scrutinizing certain claims; (11) IRS implemented new procedures (called recertification) in 1999 that require certain taxpayers to document their eligibility for the EIC before IRS approves their claim; (12) GAO identified certain opportunities to streamline the recertification process and thus make it less burdensome to taxpayers and IRS; (13) IRS service centers were not consistently following the national guidelines for recertification, which could result in disparate treatment of taxpayers; (14) IRS implemented several initiatives in 1999 directed at making electronic filing paperless and thus more appealing to potential users; (15) 20 percent of the returns filed in 1999 included the new child tax credit; (16) many of those taxpayers erred in calculating the credit amount, while others who were eligible for the credit failed to claim it; (17) correction of these errors increased IRS' processing workload; (18) IRS made significant changes to the computer systems it uses to process returns and remittances; and (19) IRS accomplished those changes without any discernible processing disruptions.

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