GAO Reports  
GGD-95-6 December 07, 1994

Tax Administration: IRS Notices Can Be Improved

Each year, the Internal Revenue Service (IRS) sends millions of notices to taxpayers about the status of their tax accounts. Notices are often the first form of IRS contact that taxpayers receive to alert them to a potential tax problem. In 1993, IRS sent more than 60 million notices affecting about $190 billion in taxpayer transactions. GAO identified clarity problems with 31 of the 47 most commonly used notices it received. GAO also believes that taxpayers with multiple tax problems would be better served by receiving a single, comprehensive notice summarizing the status of their accounts, rather than the stream of multiple notices that IRS now sends out. Through a tax systems modernization initiative that is exploring ways to issue a single notice addressing multiple tax matters, IRS hopes to be able to deliver comprehensive tax account notices to taxpayers. Despite IRS' progress and commitment to improving clarity, in some cases taxpayers continued to receive notices that IRS' Notice Clarity Unit (NCU) deemed problematic. Although NCU may have reviewed the notice and recommended text changes, IRS continued to issue the inferior version, since the revisions were not made promptly. Many of the recommended changes were delayed or never made because of IRS' computer system, which is antiquated and requires labor-intensive programming to make the simplest of text changes. Improvements may result from the transfer of notices to Correspondex, a more modern computer system that generates other IRS correspondence.

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