Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) development and use of interactive telephone systems to improve customer service, focusing on IRS efforts to: (1) make the phone systems easy to use; (2) protect taxpayer data; and (3) assign owners that would provide developers with systems requirements information.

GAO found that: (1) successful IRS implementation of interactive telephone systems is critical to improving IRS customer service, since IRS expects taxpayer telephone assistance to double as IRS tries moves towards a paperless system; (2) three new IRS phone systems are not user-friendly which may cause taxpayers to use the new systems less; (3) the new phone systems' routing system has too many menu options and does not permit callers to return to the main menu if necessary; (4) IRS is aware of the systems' menu problem, but it believes the multiple options are necessary because tax issues are complex; (5) IRS is considering providing multiple toll-free numbers to alleviate its menu problem, but providing advance instructions on the menu options may be more cost-effective; (6) IRS has complied with Department of the Treasury and IRS security requirements to protect taxpayer data and is investigating ways to increase security as taxpayers gain greater access to their tax accounts; (7) IRS process owners have been designated late and have not provided all requirements information needed for the phone systems' development; and (8) an IRS cost-benefit analysis has shown that the phone systems' benefit-to-cost ratio is three to one.

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