Pursuant to a congressional request, GAO provided information on the
Internal Revenue Service's (IRS) Restructuring and Reform Act's
personnel flexibility provisions, focusing on: (1) IRS' implementation
of these provisions; and (2) any tax administration concerns that may
have arisen in relation to implementation.
GAO noted that: (1) IRS has implemented or begun to implement the
mandated personnel flexibility provisions in the Restructuring Act; (2)
specifically, the agency has: (a) begun implementing a new three-phase
performance management system; (b) been reviewing alleged employee
misconduct, and, as of March 1, 2000, had terminated 17 employees for
misconduct; (c) been working to eliminate enforcement statistics in
employee evaluations; and (d) implemented a new training program
emphasizing customer service; (3) IRS has also begun using some of the
discretionary personnel flexibility provisions permitted by the
Restructuring Act; (4) senior managers have been hired at critical pay,
a new pay-banding system for non-Senior Executive Service managers has
been adopted, and several streamlined demonstration projects and new
separation incentive payments are under development; (5) also, certain
recruitment, retention, and performance bonuses have been paid; (6) IRS'
implementation of the personnel flexibility provisions raises several
tax administration concerns; (7) as GAO's prior report and a Treasury
Inspector General for Tax Administration (TIGTA) report have noted, IRS
has had difficulty in eliminating the use of enforcement statistics in
employee evaluations; (8) another TIGTA report found that IRS has had
difficulty developing an accurate system for counting taxpayer
complaints of employee misconduct; (9) in addition, as GAO has
previously reported, IRS employees have taken significantly fewer
enforcement actions to collect delinquent taxes since passage of the
Restructuring Act; and (10) frontline employees GAO spoke to believed
that the decline was due to a lack of agency guidance on how to
interpret the provision concerning employee misconduct.
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