Recommendations for Executive Action

1. Status: Open

   Comments: In April 2016, IRS officials reported that, although the agency initially disagreed with the recommendation to compare its telephone service to the best in business, the agency created a benchmarking development team in early 2016 to consider our prior work in benchmarking its telephone service. As of October 2016, IRS officials reported that the agency completed a benchmarking study and plans to share the results with us by the end of 2016. IRS officials continue to report that many of our taxpayer service-related recommendations will ultimately be incorporated into IRS's new Future State initiative. However, it is unclear the extent to which and when our recommendations will be fulfilled by the Future State initiative. In addition, IRS may be able to develop a comprehensive customer service strategy with Treasury as we suggested to Congress in December 2015 that would incorporate our related recommendations including to benchmark to best in business which would enable IRS to make more informed requests to Congress about resource requirements to deliver desired levels of service.

   Recommendation: The Commissioner of the Internal Revenue should direct the appropriate officials to systematically and periodically compare its telephone service to the best in business to identify gaps between actual and desired performance.

   Agency Affected: Department of the Treasury: Internal Revenue Service

2. Status: Closed - Implemented

   Comments: In 2014, we found that the Internal Revenue Service (IRS) was using a new enterprise-wide risk management approach to identify risks and making good progress in establishing its risk management process. While IRS identified risks and countermeasures, such as contingency plans and workload adjustments, most countermeasures were not specific. Without specific countermeasures identified in advance, IRS's ability to respond to adverse events may be hampered. Therefore, we recommended that IRS include specific countermeasures or options in their risk management plans that could guide officials when an adverse event occurs. In May 2016, IRS officials reported that they had developed guidance covering the components of the Committee of Sponsoring Organization of the Treadway Commission (COSO) Enterprise Risk Management framework. The COSO framework includes the identification of risk responses or countermeasures in risk management plans. IRS reported that it had developed specific countermeasures in its risk management plans covering filing season readiness for those risks ranked highest in likelihood and impact. In August 2016, we reviewed an update to IRS's Wage & Investment Risk Register and found that risks associated with the filing season listed a series of specific mitigation steps for each risk identified. IRS identified additional mitigation steps that could be taken if the initial step fell short of the desired outcome.

   Recommendation: The Commissioner of the Internal Revenue should direct the appropriate officials to include specific countermeasures or options in risk management plans that could guide a response when an adverse event occurs.

   Agency Affected: Department of the Treasury: Internal Revenue Service

3. Status: Closed - Implemented

   Comments: IRS agreed with our recommendation and said that implementing it would allow the agency to determine the amount of resources that are reallocated as a result of the service initiatives, assess the taxpayer experience, and address additional opportunities for improvement. In February 2015, IRS established performance measures tracking mechanisms and assessments for evaluating its fiscal year 2015 service approach. We reviewed the document and determined that IRS developed measurable targets and plans to analyze the effects of each of the 5 service initiatives for fiscal year 2015. Additionally, IRS analyzed the results of the service initiatives at the end of the 2015 filing season, and plans to conduct another assessment at the end of fiscal year 2015. These efforts helped IRS determine the effectiveness of the fiscal year 2015 service initiatives, report on the results of them to Congress and other stakeholders, and make informed decisions on additional service initiatives in 2016 and beyond.

   Recommendation: The Commissioner of the Internal Revenue should direct the appropriate officials to develop outcomes that are measurable and plans to analyze service changes that allow valid conclusions to be drawn so that information can be conveyed to Congress, IRS management, and others about the effectiveness of IRS's service changes and impact on taxpayers.

   Agency Affected: Department of the Treasury: Internal Revenue Service

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