TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION 

Reduced Budgets and Collection Resources 

Have Resulted in Declines in Taxpayer 

Service, Case Closures, and 

Dollars Collected 

May 8, 2015 

Reference Number: 2015-30-035 

This report has cleared the Treasury Inspector General for Tax Administration disclosure review process 

and information determined to be restricted from public release has been redacted from this document. 

Phone Number / 202-622-6500 

E-mail Address / TIGTACommunications@tigta.treas.gov

Website / http://www.treasury.gov/tigta
HIGHLIGHTS

REDUCED BUDGETS AND COLLECTION issues. In addition, ACS inventory grew and 

RESOURCES HAVE RESULTED IN became older, and more cases were not 

DECLINES IN TAXPAYER SERVICE, resolved and were transferred to the Queue. 

CASE CLOSURES, AND DOLLARS In FY 2014, revenue officers collected 

COLLECTED $222 million (7 percent) less than in FY 2011. In 

addition, they closed 34 percent fewer cases. 

Highlights This was primarily due to the decrease in the 

number of revenue officers and downtime that 

resulted from revenue officers’ computer 

Final Report issued on May 8, 2015 problems. In FY 2014, revenue officers’ 

computer downtime reached 66,448 hours, the 

Highlights of Reference Number: 2015-30-035 equivalent to losing 32 full-time employees for 

to the Internal Revenue Service Commissioner the year. 

for the Small Business/Self-Employed Division. Many lower graded revenue officers are more 

IMPACT ON TAXPAYERS experienced because budget limitations have 

restricted their promotion opportunities. As a Since Fiscal Year 2010, decreases in the budget result, Field Collection may be able to mitigate have resulted in the reduction of 21 percent of further risk to tax administration by assigning Automated Collection Service (ACS) contact revenue officers’ inventory closer to full capacity. representatives and 28 percent of Field In addition, higher graded revenue officers could Collection revenue officers. The availability of be assigned a higher percentage of high-risk these key collection employees directly affects complex cases. The number of unassigned taxpayer service and the IRS’s ability to take highly complex cases grew by more than appropriate enforcement action on delinquent 180 percent since Fiscal Year 2012. This is 

taxpayers. important because the average amount 

collected on the most complex cases was more WHY TIGTA DID THE AUDIT than three times the next highest average 

Between Fiscal Years 2010 and 2015, the IRS’s amount collected. 

budget has been reduced by more than WHAT TIGTA RECOMMENDED $1.2 billion. This audit was initiated to determine 

the impact that IRS budget reductions have had TIGTA recommended that the IRS: 1) ensure on collection programs and employees. that revenue officer inventory levels are 

maintained at close to full capacity while WHAT TIGTA FOUND ensuring the inventory levels are commensurate 

Collection employees are important because with the complexity of the cases; and 2) ensure 

their technical skills are needed to fulfill the that General Schedule-13 grade revenue 

IRS’s mission of collecting unpaid taxes. officers are working appropriate cases, and 

Although management made extensive cuts to when possible, increase the percentage of 

non-labor costs, significant collection personnel General Schedule-13 grade cases assigned to 

reductions were still necessary. General Schedule-13 grade revenue officers. 

This has resulted in the ACS answering IRS management agreed with the 

25 percent fewer taxpayer telephone calls since recommendations and plans to take corrective 

2011, because there were fewer ACS contact actions. 

representatives available to answer them. 

Taxpayers whose calls were answered spent an 

average of eight minutes (97 percent) longer 

waiting for a contact representative. Taxpayers 

may become frustrated and remain 

noncompliant if they are unable to reach a 

contact representative to resolve their tax 
DEPARTMENT OF THE TREASURY 

WASHINGTON, D.C. 20220

TREASURY INSPECTOR GENERAL 

FOR TAX ADMINISTRATION 

May 8, 2015 

MEMORANDUM FOR COMMISSIONER, SMALL BUSINESS/SELF-EMPLOYED 

DIVISION 

FROM: Michael E. McKenney 

Deputy Inspector General for Audit 

SUBJECT: Final Audit Report – Reduced Budgets and Collection Resources Have 

Resulted in Declines in Taxpayer Service, Case Closures, and Dollars 

Collected (Audit # 201330010) 

This report presents the results of our review to determine the impact that Internal Revenue 

Service (IRS) budget reductions have had on collection programs and employees. This audit is 

included in our Fiscal Year 2015 Annual Audit Plan and addresses the major management 

challenge of Tax Compliance Initiatives. 

Management’s complete response to the draft report is included as Appendix VII. 

Copies of this report are also being sent to the IRS managers affected by the report 

recommendations. If you have any questions, please contact me or Matthew A. Weir, Assistant 

Inspector General for Audit (Compliance and Enforcement Operations). 
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Table of Contents 

Background .......................................................................................................... Page 1 

Results of Review ............................................................................................... Page 4 

Budget Reductions Have Resulted in a Decrease in Automated 

Collection System and Field Collection Personnel ....................................... Page 4 

Collection Program Performance Trends Have Declined ............................. Page 10 

There Are Opportunities for Field Collection to Mitigate the Risks 

Resulting From the Decline in the Number of Revenue Officers ................. Page 16 

Recommendations 1 and 2: .............................................. Page 21 

Appendices 

Appendix I – Detailed Objective, Scope, and Methodology ........................ Page 23 

Appendix II – Major Contributors to This Report ........................................ Page 25 

Appendix III – Report Distribution List ....................................................... Page 26 

Appendix IV – Automated Collection System Business Results ................. Page 27 

Appendix V– Comparison of Selected Case Attributes ................................ Page 31 

Appendix VI – Glossary of Terms ................................................................ Page 32 

Appendix VII – Management’s Response to the Draft Report ..................... Page 34 
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Abbreviations 

ACS Automated Collection System 

FY Fiscal Year 

GS General Schedule 

IRS Internal Revenue Service 

TDA Taxpayer Delinquent Account 

TDI Taxpayer Delinquency Investigation 

TIGTA Treasury Inspector General for Tax Administration 
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Background 

The Internal Revenue Service (IRS) continues to encounter a number of formidable budgetary 

challenges. Due to delays in enacting Federal budgets for the past several years, Continuing 

Resolutions1 have been passed to keep the Government operating. As such, the full-year 

operating budget has not been known until well into the fiscal year. Additionally, the impact of 

the sequestration provisions in the Balanced Budget and Emergency Deficit Control Act, as 

amended by the Budget Control Act of 2011,2 significantly affected the IRS. During Fiscal Year 

(FY) 2013, the IRS operated under a Continuing Resolution, in addition to sequestration rules, 

that funded the agency at just less than $11.2 billion. That amount was significantly lower than 

both the President’s and the IRS Oversight Board’s FY 2013 recommendations, approximately 

$948 million less than the FY 2010 budget. The IRS’s FY 2015 enacted budget of $10.9 billion 

was more than $1.2 billion (10 percent) less than the FY 2010 enacted budget. 

Figure 1 shows the IRS’s enacted budgets since FY 2009 in comparison to the amounts 

requested in the President’s budgets and the amounts recommended by the IRS Oversight Board. 

The enacted amounts have dropped significantly since FY 2011. 

Figure 1: The IRS’s Recommended, Requested, and Appropriated Budgets 

From FY 2009 to FY 2015 

Source: IRS Oversight Board’s FY 2015 IRS Budget Recommendation Special Report.

 

1

 See Appendix VI for a glossary of terms. 

2

 Pub. L. No. 112-25, 125 Stat. 240 (2011). 

Page 1
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

In its FY 2015 IRS Budget Recommendation Special Report, the IRS Oversight Board expressed 

concern that the cuts have forced the IRS to find major cost efficiencies and implement 

significant spending cuts. This has led to dramatic curtailments in training, travel, office space, 

and outside contracts. The IRS has also been forced to significantly reduce the size of its 

workforce. In FY 2012, the agency offered buyouts to 7,000 of its employees, with more than 

1,200 accepting. The IRS also instituted an “exception-only” hiring freeze, leaving many 

vacancies unfilled. Between FY 2010 and the end of FY 2014, the number of IRS employees 

has been reduced by approximately 13,000 full-time positions, with about 9,500 coming from 

front-line enforcement personnel. 

The IRS Collection program has the primary responsibility for collecting delinquent taxes and 

tax returns while ensuring that taxpayer rights are protected. Specifically, the mission of the IRS 

Collection function is: 

To collect delinquent taxes and secure delinquent tax returns through the fair and 

equitable application of the tax laws, including the use of enforcement tools when 

appropriate, provide education to customers to enable future compliance, and 

thereby protect and promote public confidence in the American tax system. 

This is a significant operation within the IRS because of the extent of noncompliance in both 

delinquent tax liabilities and delinquent tax returns. The IRS estimates that the annual Tax Gap 

($450 billion) includes $46 billion in delinquent tax liabilities and $28 billion in unfiled tax 

returns.3

 The Automated Collection System (ACS) and Field Collection are two critical parts of 

the IRS’s overall Collection program and perform a vital role in collecting delinquent taxes and 

tax returns. Their work with delinquent taxpayers is a major factor in determining the Collection 

program’s success in meeting its mission. 

The ACS has 15 call sites in the Small Business/Self-Employed Division. The Small 

Business/Self-Employed Division also has a total of five ACS support sites that support the call 

sites. Four of these ACS support sites resolve written correspondence from taxpayers, taxpayer 

representatives, and/or third-party contacts. Contact representatives at the ACS call sites are 

responsible for answering incoming taxpayer calls and working the inventory of Taxpayer 

Delinquent Accounts (TDA) and Taxpayer Delinquency Investigations (TDI). TDAs and TDIs 

in ACS inventory are created after prior efforts to collect unpaid balances via notices have been 

unsuccessful. 

There are more than 400 Field Collection offices across the country from which revenue officers 

contact taxpayers in person to collect unpaid taxes and secure tax returns from delinquent 

 

3

 The Tax Gap is the difference between what taxpayers should have paid and what they paid timely. The largest 

portion ($376 billion) of the Tax Gap is based on taxpayers underreporting taxes. A smaller portion ($46 billion) is 

based on taxpayers not fully paying their tax liabilities. The final portion ($28 billion) is based on those taxpayers 

not filing tax returns. In January 2012, the IRS reported these updated Tax Gap figures that represent Tax 

Year 2006 tax return data. 

Page 2
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

taxpayers who have not complied with previous notices or contacts by the ACS. Revenue 

officers also take enforcement actions, including levies, liens, and seizures of property. 

This review was performed at the Small Business/Self-Employed Division Headquarters in 

New Carrollton, Maryland; the Philadelphia Campus in Philadelphia, Pennsylvania; Field 

Collection offices in Oakland, California; Denver Colorado; Springfield, Illinois; and 

Seattle, Washington, during the period November 2013 through November 2014. We conducted 

this performance audit in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions based on our audit 

objective. We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objective. Detailed information on our audit objective, 

scope, and methodology is presented in Appendix I. Major contributors to the report are listed in 

Appendix II. 

 

Page 3
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Results of Review 

Budget Reductions Have Resulted in a Decrease in Automated 

Collection System and Field Collection Personnel 

The IRS budget for FY 2014 was nearly $1 billion less than the FY 2010 budget. During that 

same period, the budgets for the ACS and Field Collection were reduced by more than 

$269 million. Figure 2 shows the changes in the ACS budget from FY 2010 to FY 2014. Since 

FY 2011, the ACS budget decreased more than $92 million (30 percent) from $311.3 million to 

$218.8 million. 

Figure 2: ACS Budget From FY 2010 to FY 2014 

Source: Treasury Inspector General for Tax Administration (TIGTA) analysis of the 2010 

through 2014 Monthly Summary of Resources Reports and Dollars and Sense Reports. 

Figure 3 shows the changes in the Field Collection budget from FY 2010 to FY 2014. Since 

FY 2010, the Field Collection budget decreased more than $181 million (25 percent) from 

$736.9 million to $555.0 million. 

Page 4

$306.5 $311.3

$261.4

$239.0

$218.8

$150

$170

$190

$210

$230

$250

$270

$290

$310

$330

2010 2011 2012 2013 2014

ACS Budget (In Millions)

Fiscal Year
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 3: Field Collection Budget From FY 2010 to FY 2014 

Source: TIGTA analysis of the 2010 through 2014 Monthly Summary of Resources Reports 

and Dollars and Sense Reports.

Similar to the other functions of the IRS, the largest portions of the ACS and Field Collection 

budgets are spent on labor costs. Figure 4 shows that in FY 2010, the majority of the ACS and 

Field Collection budgets was devoted to labor costs. 

Figure 4: ACS and Field Collection FY 2010 Budget Allocations 

Source: TIGTA analysis of the 2010 Monthly Summary of Resources Reports and Dollars and Sense Reports.

Management recognized the importance of keeping employees available to work with taxpayers 

and work inventory. Therefore, management reduced non-labor expenses, such as training, 

travel, services, and supply expenses, proportionally more than labor expenses. Figure 5 shows 

the decrease in non-labor expenses in the ACS and Field Collection between FY 2010 and 

Page 5

$736.9

$701.3

$627.5

$577.6

$555.0

$500

$550

$600

$650

$700

$750

2010 2011 2012 2013 2014

Field Collection Budget (In Millions)

Fiscal Year
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

FY 2014. Specifically, ACS non-labor expenses were reduced by $40.8 million (98 percent) and 

Field Collection non-labor expenses were reduced by $40.5 million (56 percent). 

Figure 5: ACS and Field Collection Non-Labor Expenses 

From FY 2010 to FY 2014 

$41.5 $40.9

$1.0 $0.9 $0.7

$0

$10

$20

$30

$40

$50

Non

2010 2011 2012 2013 2014

‐Labor Expenses (In Millions)

Fiscal Year

ACS

$72.9

$55.3

$42.7

$34.9

$32.4

$0

$10

$20

$30

$40

$50

$60

$70

$80

Non

2010 2011 2012 2013 2014

‐Labor Expenses (In Millions)

Fiscal Year

Field Collection

Source: TIGTA analysis of the 2010 through 2014 Monthly Summary of Resources Reports and Dollars and 

Sense Reports.

All non-labor costs could not be eliminated because some of these costs are necessary. For 

example, revenue officers often incur travel expenses when visiting taxpayer locations. 

However, by FY 2014, the proportion of the budget that was dedicated to labor costs had 

increased. Figure 6 shows the FY 2014 ACS and Field Collection budget allocations. 

Figure 6: ACS and Field Collection FY 2014 Budget Allocations 

 Source: TIGTA analysis of Monthly Summary of Resources Reports and Dollars and Sense Reports.

Page 6
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Even though ACS and Field Collection management were able to lower the labor costs’ 

proportional share of the budget reduction compared with other costs, labor cost reductions were 

unavoidable because the budget reduction was more than all non-labor costs combined. 

Specifically, in the ACS, the budget reduction was $46 million more than all non-labor costs 

combined, and in Field Collection, the budget reduction was $109 million more than all 

non-labor costs combined. As a result, both the ACS and Field Collection reduced staff. 

ACS staffing has been reduced 24 percent since FY 2011 

The ACS began FY 2014 with 705 (24 percent) fewer contact representatives than it started with 

in FY 2011. Figure 7 shows the change in contact representatives from FY 2009 to FY 2014. 

Figure 7: Number of ACS Contact Representatives 

From FY 2009 to FY 2014

2,738 2,817

2,939

2,623

2,426

2,234

1,800

2,000

2,200

2,400

2,600

2,800

3,000

3,200

2009 2010 2011 2012 2013 2014

ACS Contact Representatives

Fiscal Year

Source: TIGTA analysis of ACS call site staffing data.

In addition, three ACS call sites were taken offline in February 2013 to work Accounts 

Management function inventory. Management made this decision to free up Accounts 

Management function resources to address the IRS’s growing inventory of identity theft cases. 

The initiative was originally scheduled to continue for three months, but was subsequently 

extended until June 2014. This reallocation was the equivalent of losing an additional 

410 contact representatives because the employees in these three ACS call sites were now 

answering taxpayer questions rather than working ACS inventory. As a result, from FY 2011 to 

FY 2013, the number of ACS contact representatives was reduced by 31 percent. Figure 8 shows 

how the amount of ACS dollars collected was affected during that time frame. 

Page 7
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 8: Dollars Collected Compared With 

Contact Representatives From FY 2010 to FY 2014 

Source: TIGTA analysis of FY 2010 through 2014 Collection Activity Reports and ACS staffing data. 

Despite the decline in ACS contact representatives, dollars collected by ACS started to trend 

upward in FY 2013. In FY 2014, dollars collected by ACS increased $316 million (11 percent) 

from FY 2012. IRS management believes the levels in FY 2012 and FY 2013 were low because 

of reduced staffing levels and interruptions to ACS systemic levy processing. An improving 

economy and the return of detailed ACS staff in the second half of FY 2014 helped, in part, to 

return revenues closer to levels collected before FY 2012. However, the $3.1 billion collected in 

FY 2014 is still slightly less than the $3.2 billion collected in FY 2010. 

The number of revenue officers has decreased by 28 percent since FY 2010 

Since FY 2010, 1,177 (28 percent) revenue officers have been lost due to attrition or 

reassignment. Figure 9 shows the change in the number of revenue officers from FY 2010 to 

FY 2014. 

Page 8
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 9: Number of Revenue Officers From FY 2010 to FY 2014 

4,140

3,903

3,558

3,240

2,963

2,000

2,500

3,000

3,500

4,000

4,500

2010 2011 2012 2013 2014

Number of Revenue Officers

Fiscal Year

Source: TIGTA analysis of Collection reports. 

Retirement eligibility data indicate that declines in the number of ACS contact representatives 

and Field Collection revenue officers may continue. In FY 2015, 16 percent of ACS contact 

representatives and nearly one-quarter of Field Collection revenue officers are eligible to retire. 

By the end of FY 2016, 24 percent of the ACS contact representatives and 33 percent of Field 

Collection revenue officers will be eligible to retire. 

ACS contact representatives and Field Collection revenue officers are important because their 

technical skills are needed to fulfill the Collection function’s mission of collecting unpaid taxes. 

Contact representatives at the ACS call sites are responsible for answering incoming taxpayer 

calls and working the inventory of TDAs and TDIs. Revenue officers contact taxpayers in 

person to collect unpaid taxes and secure tax returns from delinquent taxpayers who have not 

complied with previous notices or contacts by the ACS. These are the key resources needed to 

address the Collection function’s portion of the Tax Gap and to work the inventory of delinquent 

accounts to ensure equitable treatment for the majority of taxpayers who timely and fully pay 

their taxes. 

In addition to working the inventory of delinquent taxpayers, revenue officers also serve as a 

deterrent to potentially delinquent taxpayers. With fewer resources available to administer tax 

collections, both the ACS and Field Collection have experienced unfavorable trends in some key 

customer service (ACS call handling) and business results. Further, replacing lost employees 

will potentially create a further strain on the IRS’s ability to work the delinquent taxpayer 

inventory because experienced employees will need to be taken from their regular duties to train 

any new employees. 

Page 9
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Collection Program Performance Trends Have Declined 

ACS call handling performance has declined due to fewer ACS contact 

representatives 

ACS management places a high priority on answering incoming taxpayer telephone calls because 

communication with taxpayers helps resolve delinquencies and brings taxpayers into compliance 

with their tax obligations. The ACS’s primary measure of telephone effectiveness is the Level of 

Service, which is a measure of the callers’ abilities to connect with ACS contact representatives. 

However, with fewer contact representatives to answer telephone calls, the ACS was unable to 

maintain the same Level of Service that it achieved in prior years. Although IRS management 

took steps to reduce the number of incoming telephone calls by reducing the number of liens and 

levies, contact representatives could not keep up with the number of incoming calls. 

Specifically, although total calls into the ACS have decreased by 16 percent since FY 2011, ACS 

contact representatives answered 25 percent fewer telephone calls. Figure 10 compares the 

number of calls received and answered from FY 2009 to FY 2014. 

Figure 10: ACS Calls Received and Answered From FY 2009 to FY 2014

Source: TIGTA analysis of ACS call site data. 

In addition, the taxpayers who reach a contact representative are experiencing much longer wait 

times. In FY 2014, the average time to reach an ACS contact representative increased by 

approximately eight minutes (97 percent) compared with FY 2011. Conversely, the average time 

that contact representatives spent resolving taxpayer questions has decreased since FY 2011. On 

average, ACS employees spent 6 percent less time handling taxpayer telephone calls in FY 2014 

Page 10

1,500,000

2,500,000

3,500,000

4,500,000

5,500,000

6,500,000

7,500,000

8,500,000

2009 2010 2011 2012 2013 2014

Total Calls

Fiscal Year

Total Calls Into ACS

Total Calls Answered
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

than they did in FY 2011. TIGTA previously reported4 that ACS management information does 

not capture the complete results of its call handling operations. As a result, ACS management 

cannot determine the reasons why there was a decrease in the average time it took to handle each 

taxpayer call. Figure 11 shows wait times increased as handle times decreased from FY 2009 to 

FY 2014. 

Figure 11: ACS Telephone Average Wait Time and 

Average Handle Time From FY 2009 to FY 2014 

9.8

7.9 8.1 8.4

13.1

15.9

23.8 22.7 22.9

21.5 21.1 21.5

6

8

10

12

14

16

18

20

22

24

26

2009 2010 2011 2012 2013 2014

Time (Minutes)

Fiscal Year

Average Handle Time

Average Wait Time

Source: TIGTA analysis of ACS call site data.

The Level of Service also declined in FY 2014. Figure 12 shows that although the average Level 

of Service stayed near 80 percent from FY 2009 to FY 2012, it decreased to less than 72 percent 

in FY 2014. 

 

4

 TIGTA, Ref. No. 2014-30-080, Declining Resources Have Contributed to Unfavorable Trends in Several Key 

Automated Collection System Business Results (Sept. 2014). 

Page 11
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 12: ACS Level of Service From FY 2008 to FY 2014 

76.8%

78.9% 80.1% 80.6% 80.5%

73.9%

71.9%

60%

65%

70%

75%

80%

85%

90%

95%

100%

2008 2009 2010 2011 2012 2013 2014

Level of Service

Fiscal Year

Source: TIGTA analysis of ACS Level of Service data. 

If this trend continues, these conditions could lead to taxpayer frustration as many taxpayers 

receiving IRS notices, e.g., Notice to File Federal Tax Lien and Notice of Levy, will find it 

difficult to reach a contact representative to resolve their tax issues. 

Several key ACS business results showed unfavorable trends

In addition to unfavorable trends in providing service to taxpayers by answering telephone calls, 

TIGTA previously reported5

 that ACS business results have been affected by declining resources 

in the following ways: 

 New inventory is outpacing case closures, so the inventory is growing. 

 Inventory is taking longer to close, thus cases in inventory are aging. 

 More, and older, cases were transferred to the Queue, which reduces the probability of 

collection by the field. 

See Appendix IV for the details and analysis of the affected ACS business results previously 

reported by TIGTA. 

 

5

 TIGTA, Ref. No. 2014-30-080, Declining Resources Have Contributed to Unfavorable Trends in Several Key 

Automated Collection System Business Results (Sept. 2014). 

Page 12
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

The number of cases closed by Field Collection has decreased 

In FY 2014, revenue officers closed 164,061 (34 percent) fewer cases than in FY 2011. We 

determined that the decline in case closures was due in large part to the decrease in the number 

of revenue officers and downtime resulting from revenue officers’ computer problems.

The 28 percent reduction in the number of revenue officers correlated with a 34 percent 

decrease in case closures 

Figure 13 shows that from FY 2010 to FY 2014, the number of cases closed by revenue officers 

correlated with the number of revenue officers. 

Figure 13: Case Closures and Number of Revenue Officers 

From FY 2010 to FY 2014 

Source: TIGTA analysis of Director Collection Reports and Collection Activity Reports. 

The number of TDAs6 closed by revenue officers is a component in determining the Collection 

coverage rate.7 The collection coverage rate measures how well the IRS is keeping up with new 

inventory. Between FY 2008 and FY 2013, the coverage rate has declined from 55.2 percent to 

47.0 percent. For FY 2014, the IRS established the coverage rate target at 42.7 percent. The 

decline in coverage rate is another indication that revenue officers are not keeping up with new 

receipts of TDAs. 

 

6

 A revenue officer case can include multiple TDAs pertaining to one taxpayer. 

7

 The collection coverage rate compares the number of collection cases disposed of to the cases available. Cases 

available are calculated as the beginning inventory of cases plus any new cases. 

Page 13

4,140

3,903

3,558

3,240

2,963

462,467 489,446

429,530

383,742

325,385

2,500

3,000

3,500

4,000

4,500

0

100,000

200,000

300,000

400,000

500,000

2010 2011 2012 2013 2014

Number of Revenue Officers

Taxpayer Cases

Fiscal Year

Number of Revenue

Officers

Taxpayer Cases
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Delayed laptop roll-out led to computer downtime 

In addition to having fewer revenue officers to work cases, a delay in issuing new laptops to 

revenue officers may have contributed to the decrease in Field Collection case closures. The IRS 

was unable to make many technological enhancements due to budget reductions. As a result, 

many revenue officers had to work on outdated laptops using outdated software, which led to 

computer downtime. During our interviews, group managers expressed concern with outdated 

technology because their employees were not fully productive as a direct result of these 

computer issues. Specifically, even though there were fewer revenue officers in FY 2014 than 

FY 2010, computer downtime increased 95 percent. Figure 14 shows that computer downtime 

increased from 34,137 hours in FY 2010 to 66,448 hours in FY 2014.

Figure 14: Revenue Officer Computer Downtime 

From FY 2010 to FY 2014 

Source: FYs 2010 through 2014 Collection Activity Reports.

In FY 2014, revenue officers’ computer downtime reached 66,448 hours, the equivalent to losing 

32 full-time employees for the year. Figure 15 shows the increase in the average number of 

downtime hours charged per revenue officer. As the number of revenue officers declined 

28 percent from FY 2010 to FY 2014, average computer downtime increased 175 percent per 

revenue officer. 

Page 14

34,137 35,584

38,636 39,096

66,448

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010 2011 2012 2013 2014

Computer Downtime (in Hours)

Fiscal Year
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 15: Average Number of Downtime Hours per 

Revenue Officer From FY 2010 to FY 2014

Source: TIGTA analysis of FYs 2010 through 2014 Collection Activity Reports. 

The number of dollars collected has decreased as fewer revenue officers are 

closing cases 

In FY 2014, Field Collection collected $222 million (7 percent) less than FY 2011. This is due, 

in part, to the decline in revenue officers. Figure 16 shows that starting in FY 2013, dollars 

collected correlated with the decrease in the number of revenue officers. 

Page 15

8 9

11

12

22

0

5

10

15

20

25

2010 2011 2012 2013 2014

Computer Downtime (in hours) per

Revenue Officers

Fiscal Year
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 16: Dollars Collected Compared With Revenue Officers 

From FY 2010 to FY 2014

Source: TIGTA analysis of Director Collection Reports and Collection Activity Reports.

In addition, fewer cases are being closed by each revenue officer. In FY 2011, revenue officers 

closed an average of 125 cases; while in FY 2014, revenue officers closed an average of 110 

cases. However, revenue officers have collected more dollars per case which may explain why 

dollars collected have not declined more. In FY 2014, revenue officers collected approximately 

$2,700 (40 percent) more per case than FY 2011. Overall, revenue officers collected 36 percent 

more dollars per revenue officer in FY 2014 than in FY 2010. General Schedule (GS)-13 grade 

revenue officers collected an average of $4.4 million each in FY 2014 and $159 million 

(162 percent) more dollars total in FY 2014 than in FY 2011. 

There Are Opportunities for Field Collection to Mitigate the Risks 

Resulting From the Decline in the Number of Revenue Officers 

Despite the billions of dollars collected by revenue officers in Field Collection, additional steps 

can be taken to reduce the risks posed by the declining number of revenue officers and case 

closures. 

Revenue officers’ assigned inventories are not at full capacity 

The IRS established target inventory levels for each revenue officer grade in order to obtain 

maximum productivity without affecting Field Collection quality. The inventory levels also 

provide a measure of uniformity among the Field Collection offices. The following target 

inventory ranges are required for each revenue officer grade: 

 GS-13 — 34 to 50 taxpayer cases 

Page 16
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

 GS-12 — 34 to 50 taxpayer cases 

 GS-11 — 53 to 79 taxpayer cases 

 GS-09 — 70 to 95 taxpayer cases 

By establishing ranges, management has some flexibility in how many cases are assigned to each 

revenue officer. Field Collection inventory reports provide a snapshot of the total number of 

cases assigned to each revenue officer and a breakdown of the assigned cases by grade level. We 

analyzed the collection inventory report for September 30, 2014 (end of FY 2014). Figure 17 

shows the average inventory level for each revenue officer grade in comparison to their upper 

and lower inventory ranges. 

Figure 17: Average Inventory Level by Revenue Officer Grade

Source: TIGTA analysis of Field Collection inventory report ending on September 30, 2014. 

At the end of FY 2014, the average number of cases assigned to each revenue officer grade was 

between 76 and 83 percent of their full capacity. For example, the average number of cases 

assigned to Grade 12 revenue officers was 41 cases, which is 82 percent of their full capacity of 

50 cases. In addition, 12 of the 59 GS-13 grade revenue officers had adjustments8

 to their 

inventory levels. Of the 47 GS-13 grade revenue officers that did not have adjustments to their 

inventory levels, nine (19 percent) did not have a sufficient number (less than 34) of cases 

assigned to them. In May 2011, the Director, Field Collection, issued guidance that provided 

 

8

 GS-13 grade revenue officers may have their inventory levels adjusted for a variety of reasons such as temporary 

assignments, medical conditions, assignment of collateral duties, etc. 

Page 17
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

that the inventories of field revenue officers should generally not exceed 85 percent of the top of 

the inventory ranges. However, the average inventory levels for each revenue officer grade 

shown in Figure 17 are less than 85 percent of the top of the respective inventory ranges. 

The May 2011 guidance considered factors such as cycle time, mix of inventory, and resources 

in establishing the 85 percent. However, the current budget environment has limited the career 

advancement of lower grade revenue officers so most of the revenue officers hired in FY 2009 

and FY 2010 at the GS-07 and GS-09 grade levels have remained at the GS-09 and GS-11 grade 

levels since FY 2011. As a result, the experience level of GS-09 and GS-11 grade revenue 

officers is generally higher than it has been in prior years. 

Because target inventory levels were established to obtain maximum productivity, Field 

Collection could potentially increase productivity and case closures by using the target inventory 

range flexibility to assign revenue officers’ inventories closer to full capacity. An IRS 

optimization study9 concluded that increases in revenue officer inventory levels are associated 

with higher revenue officer productivity. 

The decline in the number of higher grade revenue officers has affected the type 

of taxpayer cases worked 

The decline in the number of revenue officers has affected the experience level of Field 

Collection. Figure 18 shows how the grade of revenue officers who were assigned inventory has 

changed over the last five years. 

Figure 18: Number of Revenue Officers by Grade 

From FY 2010 to FY 2014 

Percentage

   FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Change

Since  

FY 2010

GS‐13 76 71 60 57 59 ‐22%

GS‐12 1,412 1,328 1,245 1,122 1,030 ‐27%

GS‐11 954 921 988 931 853 ‐11%

GS‐09 1,194 1,374 1,075 1,022 864 ‐28%

Source: TIGTA analysis of FYs 2010 through 2014 Collection Activity Reports. 

From FY 2010 to FY 2014, Field Collection lost a significant percentage of its most experienced 

revenue officers. At the end of FY 2014, there were 27 percent fewer GS-12 grade revenue 

officers and 22 percent fewer GS-13 grade revenue officers working cases than in FY 2010. The 

 

9

 Small Business/Self-Employed Division Research New Carrollton/Richmond Project ID: NCH0124: Revenue 

Officer Target Inventory Level Study: Analysis of Inventory Levels and the Impact on Productivity, Cycle Days and 

Quality (September 2009). 

Page 18
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

GS-13 grade revenue officer position was established in July 2006 to address the most complex 

collection cases. However, the IRS placed a freeze on promotions to the GS-13 grade level in 

FY 2012 due to the declining budget. The number of GS-09 and GS-11 grade revenue officers 

has also decreased, by 28 and 11 percent, respectively. These revenue officers were unable to 

advance to higher grades because of budget limits until the last quarter of FY 2014. IRS 

management advised us that some revenue officers were promoted to GS-11 and GS-12 between 

July 2014 and September 2014. 

The significant decrease in the number of GS-12 and GS-13 grade revenue officers affects the 

complexity of the collection cases that are assigned and worked. TDAs and TDIs are issued with 

a case grade of GS-09, GS-11, GS-12, or GS-13. These case grade levels correspond to the 

anticipated level of difficulty of the case. The complexity associated with each grade level is 

also considered in the number of cases each revenue officer should carry in his or her inventory. 

Higher graded (more experienced) revenue officers are needed to work the more complex cases. 

These cases involve more sophisticated taxpayers and significantly larger delinquent tax 

amounts. Appendix V shows a comparison of the GS-09, GS-12, and GS-13 grade case 

attributes based on case-grading criteria. 

The decrease in GS-13 grade revenue officers has affected the composition of TDA inventory in 

the Queue. Since FY 2010, the Queue has decreased 26 percent, due in part to the shelving of a 

large number of cases. Meanwhile, GS-13 grade unassigned inventory has increased 

180 percent, from 5,617 TDAs in FY 2012 to 15,702 TDAs in FY 2014. Figure 19 shows how 

TDA inventory in the Queue has changed since FY 2012. 

Figure 19: TDA Inventory in the Queue Between 

FYs 2012 and 2014 

   FY 2012 FY 2013 FY 2014

Percentage

Change Since

FY 2012

Total TDA Inventory   1,135,911 848,239 840,492 ‐26%

GS‐13 Grade 5,617 12,166 15,702 180%

GS 12 Grade 224,073 110,502 115,016 ‐49%

GS‐11 Grade 354,150 220,807 218,428 ‐38%

GS‐09 Grade 552,071 504,764 491,346 ‐11%

Source: TIGTA analysis of FYs 2010 through 2014 Collection Activity Reports (NO-5000). 

In October 2012, the case-grading system in the Inventory Delivery System was enhanced to 

systemically grade cases as GS-13 cases. Prior to this enhancement, all GS-13 cases were 

manually graded. Management believes that the growth in GS-13 grade inventory in the Queue 

is related primarily to the case-grading enhancements rather than the decline in GS-13 grade 

revenue officers. However, even as the number of GS-13 grade cases increased and the number 

Page 19
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

of GS-13 grade revenue officers declined, GS-13 grade revenue officers were assigned a 

significant number of lower grade cases. We analyzed the September 30th collection inventory 

reports for FYs 2010 through 2014. Figure 20 shows that at the end of FY 2010 and FY 2014, 

the percentage of assigned cases graded below the GS-13 grade level had decreased from 

49 percent to 41 percent. 

Figure 20: Inventory Mix Assigned to GS-13 Grade Revenue Officers 

GS‐13

Grade Cases

(51 Percent)

Below

GS‐ 13

Grade Cases

(49 Percent)

FY 2010

GS‐13 Grade

Cases

(59 Percent)

Below GS‐13

Grade Cases

(41 Percent)

FY 2014

Source: TIGTA analysis of Field Collection inventory reports ending on September 30, 2010, and 

September 30, 2014. 

This is a positive trend and we believe that there are benefits to increasing GS-13 grade revenue 

officers’ inventories with more GS-13 grade cases. Closing more GS-13 grade cases may 

increase collections. In FY 2014, the average dollars collected per GS-13 grade case was more 

than $110,000. Figure 21 shows the average dollars collected on GS-13 grade cases compared 

with GS-12, GS-11, and GS-09 grade cases. The average amount collected on GS-13 grade 

cases is more than three times the amount collected on the next highest average amount 

collected. 

Page 20
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 21: Average Dollars Collected per Case by 

Case Grade in FY 2014

Source: TIGTA analysis of FY 2014 Collection Activity Reports (NO-5000). 

By not assigning more GS-13 grade cases, the IRS may be more vulnerable to more sophisticated 

tax schemes and not work as many high-risk, high-dollar delinquencies. This could not only 

reduce revenue collected in the short-term, but also negatively affect future compliance. 

Recommendations 

Recommendation 1: The Director, Collection, Small Business/Self-Employed Division, 

should ensure that revenue officer inventory levels are maintained at close to full capacity while 

ensuring the inventory levels are commensurate with the complexity of the cases. 

Management’s Response: IRS management agreed with this recommendation and 

will issue a memorandum reminding Field Collection group managers to ensure that their 

revenue officer inventory levels are within current inventory levels and appropriate, 

taking into account the complexity of the cases. IRS management will also evaluate 

whether the current inventory levels for revenue officers are appropriate as part of their 

ongoing study in the complexity of Field Collection cases.

Recommendation 2: The Director, Field Collection, Small Business/Self-Employed 

Division, should ensure that GS-13 grade revenue officers are working appropriate cases, and 

when possible, increase the percentage of GS-13 grade cases assigned to GS-13 grade revenue 

officers. 

Management’s Response: IRS management agreed with this recommendation and 

will issue a memorandum reminding Field Collection group managers to ensure that their 

Page 21

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

GS‐13 GS‐12 GS‐11 GS‐9

$110,754

$31,239

Dollars

$8,574 $7,262

per Case

Case Grade
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

GS-13 grade revenue officers are assigned appropriate cases, and when possible, increase 

the percentage of GS-13 grade cases assigned to GS-13 grade revenue officers. 

Page 22
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix I 

Detailed Objective, Scope, and Methodology 

The overall objective of this review was to determine the impact that IRS budget reductions have 

had on collection programs and employees. To accomplish our objective, we: 

I. Determined how the IRS budget cuts have affected the ACS1

 and Field Collection. 

A. Compiled and analyzed trends in IRS, ACS, and Field Collection budgets for 

FY 2009 through FY 2014. 

B. Compiled and analyzed trends in ACS and Field Collection staffing and business 

results. 

1. Analyzed ACS contact representatives’ and Field Collection revenue officers’ 

staffing levels and grade levels for FY 2010 through FY 2014. 

2. Analyzed Collection program business results from FY 2010 through FY 2014 

using Collection Activity Reports and Director Collection Reports. 

3. Analyzed Collection Target Inventory Reports for the periods 

September 30, 2010, 2011, 2012, 2013, and 2014. 

4. Analyzed TDA inventory levels in the Queue for FY 2010 through FY 2014. 

5. Reviewed the TIGTA final report2

 on ACS inventory management. 

C. Identified any correlation between ACS contact representative staffing levels with 

call handling performance. 

D. Identified any correlation between Field Collection revenue officer staffing levels and 

case closures. 

Internal controls methodology

Internal controls relate to management’s plans, methods, and procedures used to meet their 

mission, goals, and objectives. Internal controls include the processes and procedures for 

planning, organizing, directing, and controlling program operations. They include the systems 

for measuring, reporting, and monitoring program performance. We determined that the 

following internal controls were relevant to our audit objective: collection target inventory 

levels established to ensure that revenue officers maximize productivity without a cost to quality 

 

1

 See Appendix VI for a glossary of terms. 

2

 TIGTA, Ref. No. 2014-30-080, Declining Resources Have Contributed to Unfavorable Trends in Several Key 

Automated Collection System Business Results (Sept. 2014). 

Page 23
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

and customer service, and call handling performance metrics established to measure the 

performance of the ACS telephone operations. We evaluated these controls by reviewing Target 

Inventory reports to determine whether each grade of revenue officer had a sufficient number of 

cases assigned and whether the cases assigned were at the proper grade level. We also analyzed 

ACS call handling performance metrics to assess the performance of its telephone operations. 

Page 24
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix II 

Major Contributors to This Report 

Nancy Nakamura, Assistant Inspector General for Audit (Compliance and Enforcement 

Operations) 

Matthew Weir, Assistant Inspector General for Audit (Compliance and Enforcement Operations) 

Bryce Kisler, Acting Assistant Inspector General for Audit (Compliance and Enforcement 

Operations) 

Carl Aley, Director 

Timothy Greiner, Audit Manager 

Bridgid Shannon, Lead Auditor 

Richard Viscusi, Lead Auditor 

Charles Nall, Senior Auditor 

Nicole DeBernardi, Auditor 

Page 25
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix III 

Report Distribution List 

Commissioner C 

Office of the Commissioner – Attn: Chief of Staff C 

Deputy Commissioner for Services and Enforcement SE 

Deputy Commissioner, Small Business/Self-Employed Division SE:S 

Director, Campus Collection, Small Business/Self-Employed Division SE:S:CC 

Director, Collection, Small Business/Self-Employed Division SE:S:C 

Director, Field Collection, Small Business/Self-Employed Division SE:S:FC 

Director, Collection Policy, Small Business/Self-Employed Division SE:S:C:CP 

Director, Headquarters Collection, Small Business/Self-Employed Division SE:S:C:HQ 

Chief Counsel CC 

National Taxpayer Advocate TA 

Director, Office of Legislative Affairs CL:LA 

Director, Office of Program Evaluation and Risk Analysis RAS:O 

Office of Internal Control OS:CFO:CPIC:IC 

Audit Liaison: Commissioner, Small Business/Self-Employed Division SE:S 

Page 26
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix IV 

Automated Collection System Business Results 

TIGTA previously reported1 the following details and analysis of the affected ACS2 business 

results. From FY 2010 to FY 2013, the number of ACS contact representatives has decreased by 

39 percent. Because resources are still needed to answer taxpayer telephone calls, fewer 

resources are available to work new TDA and TDI inventory. This has contributed to 

unfavorable trends in several key business results over the past four years.

Inventory is growing 

During FYs 2012 and 2013, the ACS received approximately 6.51 million and 7.07 million new 

TDAs, respectively. Figure 1 shows that ACS TDA open inventory grew from 5.94 million to 

7.79 million (31 percent) from FY 2010 to FY 2013. 

Figure 1: Modules in TDA Year-End Inventory 

for FYs 2010 Through 2013 

Source: FYs 2010 through 2013 Collection Activity Reports (NO-5000). 

Between FYs 2012 and 2013, the gap between new TDA receipts and closures increased by 

47 percent. Specifically, in FY 2012, new TDAs (6.51 million) outpaced delinquent account 

closures (4.69 million) by 1.82 million. In FY 2013, new TDAs (7.07 million) outpaced 

delinquent account closures (4.40 million) by 2.67 million. Figure 2 shows that the dollar value 

associated with the open TDA inventory has also increased. 

 

1

 TIGTA, Ref. No. 2014-30-080, Declining Resources Have Contributed to Unfavorable Trends in Several Key 

Automated Collection System Business Results (Sept. 2014). 2

 See Appendix VI for a glossary of terms. 

Page 27
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Figure 2: Value of TDA Year-End Inventory 

for FYs 2010 Through 2013 

Source: FYs 2010 through 2013 Collection Activity Reports (NO-5000).

After decreasing from $39.96 billion in FY 2010 to $30.36 billion in FY 2012, the dollar value of 

the open inventory grew to $43.92 billion (45 percent) between FYs 2012 and 2013. Similarly, 

Figure 3 shows that the number of entities with open TDIs in ACS inventory has also increased 

since FY 2010. 

Figure 3: Entities in TDI Year-End Inventory for FYs 2010 Through 2013

Source: FYs 2010 through 2013 Collection Activity Reports (NO-5000).

Page 28
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Inventory is aging and taking longer to close 

Figure 4 shows that the ACS open inventory is aging and taking longer to close.

Figure 4: Age of TDA Inventory and Closures 

for FYs 2010 Through 2013

Source: FYs 2010 through 2013 Collection Activity Reports (NO-5000). 

Between FYs 2010 and 2013, the average age of the TDAs in ACS inventory prior to being 

transferred out increased by 35 percent, from 46 weeks to 62 weeks. During the same period, the 

average time to close a delinquent account being actively worked in the ACS increased from 

37 weeks to 39 weeks (5 percent). Also during the same period, TDAs 16 months3 or older in 

open inventory increased by 98 percent from 1.3 million in FY 2010 to 2.57 million in FY 2013. 

More cases were transferred to the Queue 

Higher priority balance due accounts that are not successfully resolved by the ACS may be 

assigned to Field Collection for possible face-to-face contact with the taxpayer. However, 

because Field Collection does not have the resources to resolve all of the cases in the Queue, 

cases transferred to the Queue by the ACS may never be worked. 

These unresolved cases may first be routed to the Queue for a significant period of time until a 

revenue officer can work them. Lower priority cases that are not successfully resolved by the 

ACS and need additional enforcement action are also assigned to the Queue, where they will 

remain in an inactive status until a change in the case status causes them to be reassigned to the 

ACS or assigned to a revenue officer. For example, a new balance due module issued on a 

current tax year can cause the prior period tax delinquency case to be reassigned to an active 

 

3

 Sixteen months is the criterion the IRS uses to track the age of cases in ACS inventory. 

Page 29
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

status. As of the end of FY 2013, the Queue inventory included three million TDA tax 

modules involving 848,241 entities with balance due amounts totaling $49.9 billion. 

Because fewer resources are working inventory, more cases are subsequently routed to the 

Queue. Specifically, the ACS sent 12 percent more cases to the Queue during FY 2013 than 

during FY 2012. As the Queue inventory grows, the number of cases that are removed from 

inventory and written off an uncollectible is also likely to increase. Cases can remain in the 

Queue until the 10-year statute of limitations4

 has expired. However, these cases become less 

collectible as they get older. 

 

4

 Internal Revenue Code Section § 6502. 

Page 30
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix V 

Comparison of Selected Case Attributes

Issue GS-09 Grade GS-12 Grade GS-13 Grade 

Taxpayer Total 

Positive Income 

Less than $120,000 Greater than $185,000 Greater than $262,000 

Financial 

Investigations 

Basic financial 

investigations and 

analysis or routine 

verification of 

income and assets 

when income and 

assets are easy to 

identify.

Require in-depth, detailed 

financial investigations 

involving sophisticated and 

difficult issues, 

e.g., electronic funds 

transfers between multiple 

accounts (Abusive Tax 

Avoidance Transactions 

cases included), when 

income and assets are 

difficult to trace, 

specialized, highly 

valuable, or unique. 

Require investigation into 

complex subterfuges that 

conceal income and assets 

and delay collection. 

Examples include wire 

transfers; multiple sets of 

books; records from layered 

entities; Form 1040NR, U.S. 

Nonresident Alien Income 

Tax Return, filing; Abusive 

Tax Avoidance Transactions 

cases; and extensive Counsel 

involvement. 

Enforcement 

Action Impact 

No significant 

community or 

economic impact, 

e.g., small 

business: action 

affecting less than 

10 employees and 

is not expected to 

generate public 

interest.

Have a pronounced 

community or economic 

impact, e.g., 

large-to-medium business: 

action affecting more than 

31 employees, with the 

potential for media 

scrutiny and public 

reaction. 

Have extensive economic 

impact including large 

business with assets more 

than $10 million involving 

more than 60 employees. 

Types of 

Taxpayers 

Deal with taxpayers 

and their 

representatives 

from small 

accounting firms or 

financial 

institutions. 

Deal with representatives 

from large State and 

regional accounting firms, 

law firms, and financial 

institutions. 

Require ongoing involvement 

with multiple suit, nominee, 

and transferee 

recommendations arising 

from a single case. 

Source: TIGTA analysis of Internal Revenue Manual Exhibit 1.4.50-1 (Sept. 12, 2014).

Page 31
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix VI 

Glossary of Terms 

Page 32

Term Definition

Automated Collection 

System

A telephone contact system through which telephone 

assistors collect unpaid taxes and secure tax returns fro

delinquent taxpayers who have not complied with prev

notices. 

m 

ious 

Campus The data processing arm of the IRS. The campuses process 

paper and electronic submissions, correct errors, and forward 

data to the Computing Centers for analysis and posting to 

taxpayer accounts. 

Collection Activity Reports Reports that provide Collection function activity information 

from the beginning of the fiscal year through the end of the 

current reporting month. 

Continuing Resolution A joint resolution enacted by Congress, when the new fiscal 

year is about to begin or has begun, to provide budget 

authority for Federal agencies and programs to continue in 

operation until the regular appropriations acts are enacted. 

Field Collection The unit in the Area Offices consisting of revenue officers 

who handle face-to-face contacts with taxpayers to collect 

delinquent accounts or secure unfiled returns. 

Fiscal Year Any yearly accounting period, regardless of its relationship 

to a calendar year. The Federal Government’s fiscal year 

begins on October 1 and ends on September 30. 

IRS Oversight Board A nine-member independent body charged to oversee the 

IRS in its administration, management, conduct, direction, 

and supervision of the execution and application of Internal 

Revenue laws and to provide experience, independence, and 

stability to the IRS so it may move forward in a cogent, 

focused direction. 
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Term Definition

Level of Service The percentage of calls answered compared to the number of 

calls attempted. 

Queue An automated holding file for unassigned inventory of 

delinquent cases for which employees in the Collection Field 

function are unable to be immediately assigned for contact 

due to limited resources. 

Revenue Officer Employees in the field who attempt to contact taxpayers and 

resolve collection matters that have not been resolved 

through notices sent by the IRS campuses or the ACS. 

Sequestration When an amount of money equal to the difference between 

the cap set in the Budget Resolution and the amount actually 

appropriated is “sequestered” by the Department of the 

Treasury and not handed over to the agencies to which it was 

originally appropriated by Congress. 

Tax Gap The estimated difference between the amount of tax that 

taxpayers should pay and the amount that is paid voluntarily 

and on time. 

Taxpayer Delinquency An unfiled tax return(s) for a taxpayer. One taxpayer 

Investigation delinquency investigation is issued for each delinquent tax 

period for a taxpayer. 

Taxpayer Delinquent A balance due account of a taxpayer. One taxpayer 

Account delinquent account exists for all delinquent tax periods for a 

taxpayer. 

Page 33
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Appendix VII 

Management’s Response to the Draft Report 

Page 34
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Page 35
Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected 

Page 36
Page 37

Reduced Budgets and Collection Resources Have Resulted in 

Declines in Taxpayer Service, Case Closures, and Dollars 

Collected