Vice President Al Gore

Treasury Secretary Robert E. Rubin

with the Front-line 

Employees of the IRS
REINVENTING SERVICE AT THE IRS

Report of the Customer Service Task Force

Vice President Treasury SecretaryAl Gore Robert E. Rubin
Dear Mr. President:

We are pleased to present to you this report by the IRS Customer Service Task Force, the result of the intensive reviewwe commissioned last May.For the past five years, this Administration has been committed not just to a fairer tax code, including cutting taxes formiddle-class families, but also to fairer tax collection. Ourphilosophy is simple: the taxpayers don’t work for us, wework for them.We know that the vast majority of IRS employees are decent,hard-working public servants who want to provide qualityservice to the American people. We also know that even asingle instance of unfair treatment of taxpayers is unacceptable — and we will not tolerate it. But most important, weknow that a system that fails to meet taxpayers’ needs simplymust be changed.This report — the work of the Treasury Department, theNational Performance Review, and 30 front-line IRS employees and managers from across the country — reflects tens ofthousands of hours of work. The Task Force reviewed customer complaints and reports on the IRS, interviewedexperts and employees, and above all, listened to the concerns of the American taxpayer. The IRS has already begunto implement some of the report’s recommendations: forexample, in November, 1997, it began holding monthlyProblem Solving Days, and in January, 1998, it extended thehours of telephone service to six days a week, 16 hours aday.The report builds upon our actions in recent years to betterserve the taxpayer. In July, 1996, you signed the Taxpayers’Bill of Rights 2 to give taxpayers more protection in dealing
A Message to the Reader:

I wish to extend my personal thanks to the many fine IRS

employees who participated on this task force and contributed to this excellent report. I also want to thank VicePresident Gore and Secretary Rubin for their leadership inpromoting high-quality service at the IRS. Without theirsupport, this report would not have been possible.I believe the recommendations outlined in this report willhelp us in creating an IRS that provides services that areconsistently as good as those in the private sector. Wewill not be able to achieve this transformation overnight,but we have already begun to do more to meet our customers' needs. For example, on Saturday, November 15,1997, we held our first national “Problem Solving Day,”which allowed taxpayers nationwide to come into IRSoffices to get their problems solved. Yet Problem SolvingDay is only the beginning. There is clearly more that wecan and must do.This report provides a framework for me and the rest ofthe organization as we create a new customer servicefocus at the IRS. Each chapter title in the report is, infact, a customer service goal for the IRS. For example,Chapter II.a. says “Simplify Forms, Notices and Correspondence.” I wholeheartedly embrace these goals.They are the foundation from which we can build an IRSfocused on providing the best service to American taxpayers. The task force recommendations in this reportprovide a road map which will enable us to make thisvision a reality.

Charles O. Rossotti 

. The massive job of modernizing IRS computer

moving back on track, although there is a long

 The IRS has become a leader in the use of the

eliver information and forms to taxpayers. And

er, TeleFile, the IRS’s telephone filing service, was

wo federal programs recognized by the Ford

and Harvard University’s Kennedy School for

innovation in government. 

uch more needs to be done. The Task Force

ore than 200 actions that can help improve how

es taxpayers. These actions are based on the

payers deserve customer service from the IRSarable to the best of the private sector. Cus

rve clearer forms and notices, timely answers to

ons, accurate resolution of their problems, and

rteous treatment.

ork together with the Congress to ensure ade

ng of the initiatives necessary to advance these

e some of the actions in this report can be made

ned budget levels, others will require additional

n addition, these changes can only be made in

with the National Treasury Employees Union,

sents front-line employees. Bargaining unit

erved on the Task Force, and their enthusiasm

ns gives us confidence that front-line employees

ith IRS management to create a customer

ve an IRS that is on taxpayers’ side, providingy need. We know we have a long way to go.

d news is that the reform of the IRS has begun.

port as a compass to help guide the way and

w Commissioner Charles Rossotti’s commitment

xpayers, we can proceed on that important

Robert E. Rubin
I. Summary 1

II. A New Direction For Service 11a. Simplify Forms, Notices And Correspondence 13

• Use Plain, Clear And Courteous Language 15• Eliminate Unnecessary Notices And Contact 

With The IRS 16

• Tailor Communication To Customers 18• Reinvent How Notices Are Managed 19• Forward The Mail 20 

b. Provide Better Telephone Service 22

• Provide Telephone Services 24 Hours A Day, Seven 

Days A Week 24

• Support Service With Modern Technology 25• Customize More Services To Meet Taxpayer Needs 25 

c. Provide Better Face-To-Face Service 28

• Expand Walk-In Services 30• Make Forms More Available 31 

d. Help Small Businesses 32

• Help Start-Up Businesses 33• Communicate More Clearly With Less Paper 35• Provide Knowledgeable, Convenient Help 37• Promote One-Stop Service 39• Help Businesses With Problems 39 

e. Create A Problem Solving System That Works 42

• Resolve Customer Problems In One Contact 44• Make It Easy For People To Get Problems Solved 47• Track And Use Data On Complaints 48 

REINVENTING SERVICE AT THE IRS

Contents
1

I. Summary

re 51

mprove Customer Service 53

ng Options 53

Options 55

e On A World Class 

55 

on 57

s 59

63

ses On Customers 64

Code 65

Statement 66

xpayers 67

ht 71

Treatment 73

Get 75

ard 77

 The Right Things 79 

mers 82

s They Need To 

84

er Customer Service 86

he Right Jobs 87

Workplace 88

89

 Message Out 90 

91 

A.1

S A.23

“For the vast majority

of Americans who

want to do the right

thing, the IRS should

do right by them, and

that means treating

them with respect and

trust. And, it means

recognizing that 

taxpayers are its 

customers.”

Vice President Gore

Far too many Americans feel the Internal Revenue Serviceis not doing right by them, or that it doesn’t treat themwith the respect and trust they deserve. Taxpayers can’tunderstand complex IRS forms, notices and procedures.IRS phones and toll-free numbers are often busy. Taxpayers who get through frequently get put on hold or transferred to a person who cannot answer specific questions.Taxpayers who do not speak English are unlikely to reachan employee who speaks their language. And even thesimplest problems can take far too long to resolve.On May 20, 1997, Vice President Al Gore and TreasurySecretary Robert Rubin launched a National PerformanceReview study to find ways to improve customer service atthe IRS. The IRS Customer Service Task Force consisted ofover 60 front-line IRS employees and managers, Department of Treasury officials, and members of the NationalPerformance Review. The Task Force interviewed hundreds of people: it listened to complaints, read lettersfrom taxpayers and met with tax preparers. The TaskForce gathered ideas from others in government and theprivate sector, including businesses that excel in customerservice and consultants who help those companiesimprove customer service.The Task Force also looked at IRS pilot programs thathave improved customer service and compliance andcollected ideas from front-line employees. For example,
3

the people and companies they regulate to solve problems — results such as cleaner air, fewer injuries andfewer violations and fines.The report of the Task Force contains more than 200actions which share a clear goal: to ensure that every taxpayer is treated with fairness and respect and that IRScustomer service begins to meet the same standards thatcharacterize private sector firms. Together these actionswill make the IRS easier to deal with in everything fromfinding forms to filing taxes, from getting information toresolving a problem.Highlights of the Actions:

1. Ban Measures That Undermine Fair 

Treatment of Taxpayers

• The IRS will immediately ban measures such as using

enforcement activities to rank districts and assigning dollar goals for districts and service centers (MS011).

• The IRS will work with the National Treasury Employees

Union to design and test a balanced scorecard to evaluate the IRS and its employees in 1998. The scorecard willrate performance on: (1) customer service, based on customer satisfaction surveys; (2) employee satisfaction; and(3) business results (MS02).

• Over the longer term, the IRS will change how it selects,

trains, evaluates, rewards and supports its employees sothey can better serve customers (HP01.1).

2. Provide Better Telephone Service• Increase Hours 

To make service more convenient, the IRS will by January1, 1998 expand telephone service to 6 days a week, 16

as run programs with small businesses that were

erge of bankruptcy because of tax troubles. Spe

eams moved in to work with these businesses

gned plans that allowed them to pay off tax debts

 afloat, saving jobs and contributing to the local

y. In the process the IRS doubled the tax revenues

 in one area. As a preventive measure, the teams

p an intensive taxpayer education program to

sinesses what the IRS expects them to do and

o it.

 Force studied other government reinvention

d found ample evidence that enforcement is not

good method of ensuring compliance with the

amined programs that prove that agencies that

ple like customers and partners can be more

successful in encouraging people to obey

the law, and can then focus enforcementefforts on those who deliberately violateit. For example, until the U.S. CustomsService began working with airlines,importers and the rest of the trade community, Customs at the Miami Airport hada history of long lines for passengers andendless waits for cargo. Customsdesigned and implemented a plan thatenabled them to identify high risk passengers or freight before a plane landed. This resulted in an increase in drug

seizures, faster passage through customs

biding passengers and less waiting time for

s. Similar results were found at the Environmen

ction Agency and the Occupational Safety and

dministration when these agencies joined with

1 Numbers refer to Actions of Reinventing Service in the IRS 

accompanying reports (See Appendix for actions grouped by topic in Sections II and III of this report).
5

publications and forms (CI04.1). It will also expand the telephone information system so that people can find out

when and where they can get help (CI04.3).

• Improve Tracking of Complaints

Using the Taxpayer Advocate’s Problem Resolution Information System (PROMIS), the IRS will track complaints(FP06.1) and, if unresolved in a reasonable period of time,

reassign the case to the next higher level of management

(CI07.2). These changes will go hand in hand with the

strengthened Taxpayer Advocate and Citizen AdvocacyPanels described in II.e. 

• Review Unnecessary Penalties

The Administration will undertake a comprehensivereview of the fairness and effectiveness of all penalties,report to Congress in 1998 and make recommendationsfor legislative changes (FP04.1).

4. Reduce and Simplify Forms and Notices• Rewrite Notices

By 1999 the IRS will completely rewrite in plain language its most frequently used notices, like those forlate payment or mathematical errors. These notices willbe released only after they are tested for clarity andacceptance by taxpayers who do not have accounting ortax law backgrounds (NC01.1).

• Eliminate 30% of All Notices

By the end of 1998 the IRS will eliminate additionalunnecessary notices. This will eliminate more than 45million pieces of mail — almost one-third of the noticesthe IRS has been sending to taxpayers (NC02.5).

• Simplify Forms and Brochures 

During 1999 the IRS will create easy-to-read brochures to

day. By January 1, 1999 the IRS will expand tele

rvice to 7 days a week, 24 hours a day (CI01.2).

y, callers can get their questions answered by an

mer service representative only 5 days a week,

 a day. Expanded phone service will be achieved

g more of the current workforce on the phones

eak calling periods, using a new national 

ng system to route calls to the next available

 service representative, and forwarding calls to

es in other time zones during late night hours.

Customized Services

he IRS will begin using new call-routing tech

o provide information that is geared to specific

s’ needs — such as the tax implications of the

house, retirement or job change and multilin

ice (CI01.1). The IRS will also provide nationwide

e services for tax preparers (CI01.6).

t Easier To Get Answers

New “Problem Solving Days”

g on November 15, 1997 the IRS instituted

“Problem Solving Days” in every district, during

mployees listen to and resolve taxpayer 

 (CI07.1). 

Office Hours

g in 1998 the IRS will open district offices 

days during the busiest weekends of the filing

I04.2).

ore Convenient Locations

g in 1999 the IRS will open additional temporary

ity-based locations such as banks, libraries or

 malls during peak tax season to distribute 
TeleFile — the telephone filing system. Also, the IRS will

extend the use of TeleFile for business (FP09.2).

• Electronic Filing

The IRS will increase the number of forms that can befiled electronically and educate customers about the benefits of electronic filing — fewer hassles, fewer contactswith the IRS and faster refunds (FP09.4).

• Paperless Taxes 

In 1999 the IRS will work to enable taxpayers to filepaperless returns by eliminating the need for mailing inW-2s and other forms and for paper signatures (FP09.7).

7. Introduce New Payment Options• For the first time, beginning in 1999 taxpayers who file

electronically will be able to pay their taxes with a directwithdrawal from their bank accounts. In addition, the IRSis seeking credit industry partners to test credit cards fortaxpayers who file electronically in 1999 (FP09.8). These

new options will build upon the successful experiencewith about 15 million taxpayers whose refunds aredeposited electronically.

8. Eliminate Unnecessary Filing• In 1998 the IRS will step up its public efforts to inform 

nearly two million older and lower-income taxpayers who are currently filing federal tax forms that they don’tneed to file, saving them and the IRS time and money(FP01.1).

9. Upgrade Technology to Improve 

Customer Service

• In the long term, the IRS Modernization Blueprint will 

improve assistance to customers by making accurate,

7

mportant information on tax benefits and obliga

en and where taxpayers need it, such as at banks

companies after the purchase of a home (CM04.2).

the IRS will rewrite the basic 1040 instruction

and test it for clarity on ordinary taxpayers (CM01.2).

hen Customized Support For 

usinesses

rt-Up Businesses 

g in 1998 the IRS will team up with other federal

 financial institutions, tax preparers, state and

horities and others to provide tax information,

and consultative services to small start-up busi

hese services are designed to make record keep

g and payment requirements as simple and easy

le (SB01.2).

Specialized Phone Services

he IRS will offer small businesses the opportunity

leFile, expanding a successful pilot program

de. The IRS will provide small businesses with

a day phone assistance geared to their needs by

 tax season (SB07.1).

th Troubled Small Businesses

will work with troubled small businesses to 

m comply, stay in business and avoid future tax

, expanding on successful pilot programs in Cal

Maine and elsewhere (SB05.8).

 Electronic Filing

the IRS will increase by 3 million, or about 10

the number of taxpayers who are eligible to use
9

cally accessible and up-to-date information

 on taxpayer returns and accounts while provid

ent protection of taxpayer privacy (CI01.7). In

 example, the IRS will pilot a national 

ng system and provide simpler menus to let 

s get information more easily, including a much

able TeleTax system to check on the status of

nds (CI01.8).

ve Customer Service Training

e 1998 filing season the IRS will have an inten

cy-wide special training program. This program 

ate the new approach to customer service and 

ecific plans for the 1999 filing season (HP15.1). In 

 IRS managers, including the Commissioner, will

me each year serving customers (HP18.2).

 . . . . . .

gether, these actions promise to introduce a 

ure of customer service at the IRS. Accountability

els for customer satisfaction, greater access to

e and walk-in service, easier-to-understand forms

ces, expanded electronic filing, improved tech

n effective complaint system — all this will

impler to get questions answered, fill out forms

taxes. This program will provide new support for

siness, the lifeblood of the American economy

axpayers who face the greatest hurdles in

g compliance.

tions will help ensure that the IRS meets Vice

 Gore’s statement that taxpayers have the rightatment. “The goal is this: to treat them with

h respect, with accuracy and with fairness. It’s

le.”

Top management’s recent apology for poor treatment oftaxpayers was both courageous and necessary. Thisaction, taken with this report, signals the change withinthe IRS and in the relationship between the IRS and theAmerican taxpayer. These changes signal a new era inwhich the IRS employees can earn the trust of the taxpayers and take greater pride in the changes they’re makingon their behalf.The more than 100,000 employees of the IRS were represented on the Task Force by people like Nancy Eik,a customer service representative in a walk-in center inMissoula, Montana. Ms. Eik spends every Saturday duringthe tax season at the public library helping people fill outtheir tax forms. This is the type of IRS employee servicethat will help rebuild the pride, energy and professionalism of the IRS.Task Force members believe that by taking the steps inthis report, IRS employees will be able to provide bettercustomer service and work to restore the morale of theworkforce. For government reinvention to be successful— legitimate and lasting — it must come from both thefront-line workers and the customers. This report is basedon that honest feedback from the front lines and the customers of the IRS. The IRS is the agency of the federal government that mostAmericans must deal with every year. Nothing else ingovernment reaches out and touches so many Americansso directly. And no agency has a greater responsibility toprotect its customers and serve our nation’s citizens withfairness, courtesy and respect.
11

A New DirectionFor Service

II.

“How can people trust

government to do big

things if we can’t do

little things like answer

the telephone promptly and politely?”

Vice President Gore

What if the Internal Revenue Service thought of taxpayersas customers? What would a customer-driven IRS looklike? How would the experience of taxpayers change asthey filed their taxes? What can the IRS learn from business, other government agencies and its own employeesabout serving its customers? These questions were the starting point of this report. The IRS Customer Service Task Force was asked to followPresident Clinton’s Executive Order 12862, “Setting Customer Service Standards,” which called for a customerservice revolution in government. The members of theTask Force reviewed a decade’s worth of surveys, reportsand other data about what taxpayers want and what theycomplain about. They looked at the experiences of different customer segments — for example, individualtaxpayers, small businesses and tax preparers. They compared IRS performance and practices with some ofAmerica’s best companies and public agencies. Theytalked to hundreds of taxpayers and IRS employees tofind ways to dramatically change how information andservices are delivered by the IRS to its customers. There is no doubt that the IRS can become more responsive to taxpayers and offer customer services that areequal to the best of government and business. This fall
13

eleFile program was honored as one of the top

vations in government for 1997 by the Ford

on and Harvard University’s Kennedy School of

ment. Under this model program, taxpayers using

EZ tax return can file quickly and easily by tele

Nearly five million taxpayers filed by telephone

he TeleFile program in 1997, a 65 percent

from the previous year. Customers aren’t charged

 to use TeleFile — the number is toll free — and

popular with users because they get faster refunds.

— which can be deposited directly in taxpayer

ounts — take an average of three weeks, com

th six to eight weeks for paper returns. 

s one example of the kinds of changes that the

king to be more responsive to the needs of 

s. Despite the success of TeleFile and other mod

n efforts, however, the IRS hasn’t kept pace with

ovements in business practices, customer service

ed technology that individuals have come to

 the private sector.

 Force focused on how the IRS deals with 

s, defining more than 200 specific actions to

the products and services that the IRS provides.

on describes many of those actions and how

 affect the IRS’s customers.

II.a Simplify Forms,

Notices And CorrespondenceBackground: Customer surveys, focus groups andreports reviewed by the Task Force document taxpayercomplaints about how hard it is to understand tax formsand IRS notices. Form 1040, the most common tax package (used by 66 million individuals), looks basically thesame as it did 20 years ago — hard to use, too manylines and lots of small print. Additionally, even tax professionals list “lack of clear notices” among their top complaints. Considering that the IRS sends out more than100 million notices every year, this is no small problem.Unclear forms and notices also lead to taxpayer mistakesand account for many telephone inquiries and visits toIRS walk-in centers, resulting in costs for taxpayers. Alongwith increasingly complex tax laws, hard-to-understandforms and instructions are certainly part of the reason that50 percent of taxpayers hire a professional to do their taxes.Although the IRS has begun to rewrite its notices, forms,and publications, the Task Force found that many are stilldifficult to understand and use technical language thatwould not make sense to the average taxpayer.Public and private entities are finding that there are powerful benefits to using plain language that people canunderstand. The National Performance Review, whichhas promoted the use of plain language across the 
ent, worked with the Task Force to demonstrate

ossible. Together they rewrote IRS Notice Num

000, a notice that is sent to nearly one 

axpayers each year advising them that the IRS is

g changes to their tax returns. The current notice

ges packed with single-spaced paragraphs writ

 capital letters, with explanations and instruc

rspersed. The one-page rewrite has a simple

on of the proposed changes, a few explanatory

hs and clear directions for what to do if the tax

rees or disagrees with the IRS. The redesigned

so gives a telephone number and the hours durh taxpayers can call if they have questions.

15

When the Task Force looked at the experience of other government agencies

using plain language, it also learned howimportant it is to get ordinary individuals,rather than just tax professionals, toreview notices. For example, the Department of Veterans Affairs did extensivetesting when it began to rewrite all of itscommunications with veterans and theirfamilies. One such letter informed veterans that the agency was issuing a replacement check for a check that hadn’t beencashed. During testing, veterans wereasked what they’d do when they got theletter. They all said they’d telephone tofind out when the check would be issued.An additional sentence saying when toexpect the check headed off needlesstelephone calls.

•Use Plain, Clear And Courteous

Language 

Problem: IRS notices, forms and letters are often unclear.Actions: Notices and Correspondence: The IRS will work with the National Performance Review’s Plain Language

Team to rewrite the “top 10 worst offenders” by the end of 1997 (NC01.3). By 1999

the IRS will completely rewrite in plainlanguage its most frequently used notices,

Plain Language Pays

• Citibank’s plain English loan form cut 

staff training in half.

• A U.S. Navy study showed that plain

writing took Naval officers 17 to 23percent less time to read than materialwritten in a bureaucratic style.

• Great Britain’s Customs Service 

redesigned its lost baggage form andreduced errors from 55 percent to 3percent.

• The Canadian province of Alberta’s 

agriculture department found that their

rewritten plain language forms savedat least 10 minutes per form in stafftime, about $3.5 million total annualsavings.

• The Federal Communications 

Commission eliminated public inquiriesabout the requirements for Ham Radioand Operators when it rewrote the regulation in plain English.

Current Notice Format

ce Format
IRS) are greater than their benefit. Based on a major re-engineering project, the IRS identified more than 50 notices that

could be done away with and has already eliminated 33notices. In addition, the IRS reviews and processes taxreturns that do not need to be filed. In 1996, for example,nearly two million senior citizens, students and other lowincome taxpayers who didn’t need to file tax returns did soanyway, either from habit, or from fear of getting in troublewith the IRS.Actions: By the end of 1998 the IRS will eliminate additional low-value notices. This will eliminate more than 45million pieces of mail annually, almost one-third of the totalnumber of notices the IRS has been sending to taxpayers(NC02.5). In 1998 the IRS will step up its efforts to inform the

nearly two million older and lower-income taxpayers whoare currently filing federal tax returns that they don’t need todo so, saving the taxpayers and the IRS time and money

(FP01.1).

The IRS should study doing away with the requirement tofile Form 4868, Application of Automatic Extension of Timeto File U.S. Individual Income Tax Return, except when a 

17

e for late payment or mathematical errors. These

will only be released after they are tested for clar

cceptance by taxpayers without accounting or 

expertise (NC01.1). 

should ensure acknowledgment of the communi

t receives from taxpayers about problems and 

e when it makes a mistake (CM01.4). To improve 

ty of its correspondence, the IRS should immedi

ew and carry out all appropriate recommenda

ntained in a 1990 IRS study of correspondence 

ample, requiring that all non-computer-generat

es and letters contain the signature and tele

umber of the employee who will be working on 

unt (NC03.1). It should also standardize the format 

ent of written responses, using appropriate com

computer software (NC03.4). With a view to more 

ommunication with customers, the IRS should 

ast records of incoming correspondence to see 

ategories could be better handled by making a 

e call, rather than writing a letter, and make rec

ed changes (NC03.2, NC03.3).

he IRS should redesign its most important forms 

ications, focusing on clarity and ease of use 

By 2000 the IRS will rewrite the basic 1040 

on package, testing it for clarity with people who

ave tax law or accounting backgrounds (CM01.2). 

te Unnecessary Notices And Contact 

he IRS 

em: Taxpayers want to keep their contact with 

o a minimum. The IRS has a record of sending 

es whose costs (both to the taxpayer and to the 

Eliminate45 millionout of140 millionnoticesby 1999
19

tax products and information in Spanish and other languages as needed (CM03.1, CM03.2). During 1999 the IRS

should create easy-to-read brochures to provide important information on tax benefits and obligations whenand where taxpayers need it, such as at banks or realtycompanies during the process of purchasing a home

(CM04.2). The IRS should also ensure prompt distribution of

information about new tax laws and other issues to itsemployees (CM01.3). 

•Reinvent How Notices Are Managed 

Problem: The Task Force found that when and hownotices are issued has an impact on workloads elsewherein the IRS. Most notably they contribute to a surge in telephone calls at certain times of the year and on certaindays of the week. For example, IRS experience indicatesthat mailing notices between Wednesday and Friday contributes to the significant spike of telephone calls thatclog lines on Mondays and Tuesdays.Actions: The Task Force identified many ways inwhich better management of when and how notices areissued significantly benefits customers and the IRS. Todistribute the workload and demand on telephone linesmore evenly, the IRS should map the pattern of when andhow notices are issued (NC02.1) and merge those with telephone performance data (NC02.2). This will enable the IRS

to identify problem areas, adjust the notice issuance pattern from peak to non-peak periods and even out thenotice issuance pattern throughout each tax year. The IRSwill make sure that if a notice includes a telephone number, it will be the telephone number for employees whocan answer questions that the notice might generate

(NCO2.3, NCO2.6, NCO2.7, NC02.8). The IRS should integrate these

 is due (FP02.1). Barring any statutory impediments,

hould also find ways to reduce the number of 

ent to taxpayers concerning small amounts of 

As a first step, the IRS should review all relevant 

on to determine if the dollar level at which 

re issued can be increased (NC02.9, NC02.10).

ommunication To Customers 

em: Taxpayers complain that the publications

espondence they receive from the IRS don’their questions or fit their particular situations. For

 when they buy a house, they want easy access

evant tax information. In addition, there is a

rowing group of taxpayers who do not speak

They need information about their tax obligations

ages they understand.

ns: The IRS should tailor its publications and

 more closely to the needs of its customers

 should improve and expand the availability of

e 

A

Buying aNew Home

TAX TIPS FOR NEW PARENTS!

Tax Tips forEducation
businesses moving every year, this creates problems for

customers who, for example, don’t receive refund checksor notices about errors or penalties. This problem coststhe U.S. Treasury an estimated $100 million annually inlost revenues attributed to undelivered mail addressed tobusiness customers alone.Actions: The Task Force identified several ways toaddress the problem of undelivered mail, most of whichcan be carried out without changes in the law.The IRS should track returned and undelivered mail,review current procedures for handling it, and determineprecisely how much this process costs the IRS (NC04.1).Since updating addresses in IRS computer files with information from third parties may require regulatory or legislative changes, the IRS should examine the legal issuesinvolved and propose any necessary changes (NC04.2).

The IRS should use change of address information to forward mail. Specifically, it should develop procedures forgetting change of address information from taxpayersover the telephone or from a third-party source such asthe United States Postal Service (NC04.3). The IRS should

explore using the United States Postal Service’s existingchange of address mechanisms to ensure that mail is forwarded to the right addresses (NC04.4). Utilizing this

method for address changes could save the IRS and thetaxpaying public millions of dollars due to more accurateefficient mailing processes. After developing a system forelectronically updating addresses in its computer files, theIRS should install and maintain the system (NC04.5).

21

into its overall network management, call-rout

casting and scheduling system (NC02.4).

hould establish a new full-time position of a

gatekeeper,” who will have the authority and

bility to manage the entire notice process

The responsibilities of the job should include:

g adherence to IRS policies regarding the 

neration, and mailing of corporate notices 

;

ng a linkage with automated call-routing

ity (NC02.15);

ng input into the standard-setting for new 

 (NC02.16); 

ining the appropriate software solution to

rewritten notices and merge them with the

riate account data (NC01.2);

g all customer service assistors, walk-in man

nd customer advocates about any new,

ar, or problem notices (NC02.17); and

hing an improved “early warning system” so 

e IRS can notify tax preparers and others 

ly when problem notices are generated and 

 (NC02.18). 

d The Mail 

em: The IRS has not had the authorization to

Postal Service change of address information to

s address lists. With 40 million households and
answered in ten seconds, receive a busy signal less than

one percent of the time, and have their question answeredor problem solved with a single phone call 85 percent ofthe time. In the public sector, the Social Security Administrationhas shown what can be done with a concerted, broadand sustained effort to improve telephone service —establishing an 800-number service that, according to anindependent customer survey by Dalbar, Inc., is biggerand better than such top-ranked private operations asL.L. Bean, Disney, Xerox and Southwest Airlines. Even afterreceiving this top rating, Social Security continued toimprove service and reduce the time required to reach acustomer service representative — shifting staff to its callcenters during peak periods, converting data centers tohandle overflow calls on the busiest days, and setting upan easy-to-use 24 hour automated system to answer themost frequently asked questions.

The Task Force found that best-practice companies and public agencies tap the knowledge of front-line representatives for ideas because, according to Tony Nicely, the Chief Executive Officer of GEICO, “The front-line workerwho answers 25,000 calls a year knows more about the customer and the operation than anyone.”2 These 

companies also use many strategies to improve telephoneservice, including reducing the customers’ need to callfor information. For example, utilities facing a poweroutage automatically send faxes to radio stations andother media outlets to get urgent information out to affected customers, giving them the information they need and cutting the number of telephone inquiries. 

23

ovide Better

lephone 

rvice

ground: The IRS runs the nation’s most

sed 800-number operation, larger than private

s two largest call centers, United Airlines and the

Electric Answer Center. As of September 1997,

ated 103 million callers had reached the IRS by

p from 90.3 million in 1996 and 100.9 million

ous fiscal year. 

n-month period ending in August 1997, two

the people who called the IRS eventually got

But many of those people had to make multiple

he IRS — either because they couldn’t get

he first time, got put on hold, or gave up for

er reason. The IRS estimates that 162 million

opposed to callers) got a busy signal in 1996. 

sistent complaints about the accuracy of

that taxpayers receive to their inquiries, the IRS aggressive effort to improve the accuracy ofprovided by customer service representatives.

eral Accounting Office reported that the IRS had

e accuracy of answers from 63 percent in 1993

cent in 1996 and, according to the IRS, to 95

n 1997. 

 expectations of telephone service are based on

ndustry standards: customers have their calls

2 Tony Nicely, CEO, GEICO at an IRS Customer Service Task 

Force presentation.
• Support Service With Modern Technology

Problem: With the current automated telephonemenu, many callers hang up before getting to the services offered on the menu. Callers are also often frustrated because they cannot get accurate answers to their questions.Actions: Over the long term, the IRS ModernizationBlueprint (see p. 27) will improve assistance to customersby making accurate, electronically accessible, and up-tothe-minute information on taxpayer returns and accountsavailable to authorized employees (CI01.7). These technological improvements will help employees resolve taxpayer problems in a single telephone call while protecting 

taxpayer privacy with stringent security systems. In 1999the IRS will take steps to make the TeleTax refund information system more reliable to help more taxpayerscheck on the status of their refunds over the phone (CI01.8).

The IRS should also complete a study of why peoplehang up when they use the automated menu and recommend ways to fix this problem (CI02.1).

•Customize More Services To Meet 

Taxpayer NeedsProblem: Taxpayers with questions often have trouble reaching a representative who has the informationthey need, speaks their language, or has specializedexpertise such as that needed by tax preparers.Actions: The IRS should provide more customizedservices that respond to the needs of tax practitioners,small businesses, those who don’t speak English, andother customer segments with particular needs. As part of

25

the actions that the Task Force calls for else

 this report — such as writing notices in plain 

e and providing better computer support to front

loyees — will contribute to substantially 

d telephone services. The actions below focus 

lephone system itself.

e Telephone Services 24 Hours A Day, 

Days A Week

em: IRS customer surveys, General Accounting

ports, and other data that the Task Force reviewed

 — taxpayers want better phone service. They

vailable when it is convenient for them, includ

end and evening hours. Customers want to be

et through and don’t want to get busy signals or

n hold. They want an easy-to-use telephone menu

and to be able to reach an IRS representative. They want accurate answers

to and fast resolution of problems.

Actions: By January 1, 1998 the

IRS will expand telephone service to 6 days a week, 16 hours a day. By January 1, 1999 the IRS will expand telephone services to 7 days a week, 24hours a day (CI01.2). In addition, the IRS

will use multiple strategies to reducedemand on the telephone lines, suchas educating customers on when toexpect refunds (CI01.4).
Modernization Blueprint

On May 15, 1997, the Department of the Treasury andthe IRS published a plan to dramatically modernize theinformation technology systems of the IRS. The Blueprintclearly gives priority to implementing those aspects of theplan that will have direct benefits for taxpayers. Whenfully created, the Modernization Blueprint will:To carry out the Modernization Blueprint, the IRS is joining with the private sector to develop technologiesthat meet the best practices of industry and are in fullcompliance with applicable federal laws, rules and regulations. The customer service component of the Blueprint is scheduled to begin on October 1, 1998, with the competitive award of a Prime Systems Integration Services Contract to a team of technology companies. The U.S. Congress has concluded that the “... IRS hasmade significant progress in putting together a workablemodernization program” and, to support the modernization of its information technology, has appropriated $325million in fiscal year 1998 to fund the ModernizationBlueprint.

27

Modernization Blueprint, in 1998 the IRS will

ng new call-routing technology to gear servicec customer needs — such as the sale of a house,

ange or retirement (CI01.1) — as well as providing

elephone menus to let customers access informa

e easily.

hould also provide nationwide telephone 

for tax preparers through special phone gates

d continue to provide specialized assistance to

porations in its service centers (CI03.13). The IRS

onduct a study to determine if having only one

elephone number is sufficient to meet customer

03.12). 

r improve the quality of phone service, the IRS

low employees with multilingual skills to assist

s in Spanish and other languages (HP14.1). Also,

es should advise taxpayers the best time of day

 discuss their particular type of question. In turn,

hould use its data systems to let employees

g the telephones know when to expect these

calls so that they are prepared to help (CI01.3). 

• Create a “data engine” to give the IRS capabilities comparable to customeroriented, private sector financial service companies;• Let taxpayers reach the IRS via the Internet and telephone to facilitate filing 

and resolve taxpayer account issues;

• Give taxpayers user-friendly, computerized taxpayer assistance;• Let taxpayers work with authorized customer service representatives who 

have on-line access to current, complete and accurate information; and

• Provide stringent systems and data security to protect taxpayer privacy.
29

alone. “Last week a younger couple drove to Bismarckfrom Minot (110 miles) after they had called the toll-freenumber, had been on the phone for an hour, and stillwere confused as to what action to take and didn’t feelthat their problem was resolved. Within 5 minutes of visiting me, they had the resolution to their problem,”reports Joan Ostby, an IRS employee who works in theBismarck, North Dakota IRS office.Since 1995 budget constraints have forced the IRS toclose 127 walk-in centers; only 267 of the remaining 422centers offer a full range of services, including access toforms and taxpayer and collection assistance. Furthermore, only half of the centers are open seven hours a dayand none are open after 5 p.m. or on Saturdays, evenduring the tax season. When the IRS cut back on thenumber of walk-in offices in an effort to cut costs andimprove efficiency, and as a result customers couldn’t getforms and personal help where they had previously, thenegative reaction was strong. And demand for face-to-faceservices is growing; in 1997 the IRS served 9 millionwalk-in customers, a 50 percent increase over 1996, eventhough there were fewer walk-in offices.In searching for cost-effective ways to provide more faceto-face service and better access to forms, the Task Forcefound that many public agencies are working with eachother and with private groups to offer one-stop servicesthat are more convenient for the public and more costeffective for the agencies concerned. For example, theNational Park Service and the Forest Service teamed upwith REI, a major Seattle-based sporting goods retailer,and established a booth in REI’s flagship store where

ovide Better

ce-To-Face

rvice

ground: “The biggest complaint I hear from

s is ‘There’s no place to get forms and no one to

ce-to-face when you have a problem.’ We have

yer service and no forms in this building,” says

officer James Watkins of the Dallas, Texas District

dding that taxpayers seeking forms and services

ve 15 miles and contend with downtown traffic

ing problems in order to get the help and forms

 need. 

oup interviews conducted by the IRS between

97 confirm this complaint. Many of those inter

aid that they liked walk-in services as a way to

s, get answers to complex questions, and resolve

ncerning their tax accounts — especially during

ing season. Customers complained that, because

e service has been difficult to access and

they aren’t yet accustomed to doing business

Internet, office closures and inconvenient hours

e locations make it difficult to deal with the IRS.

telephone and Internet services are preferred by

customers, the IRS is working aggressively to

the quality of those products and services. How

e-to-face help is likely to remain an important

RS customer service. Elderly taxpayers in particu

 face-to-face assistance. But the elderly aren’t
office, the IRS should create a plan for effective alternatives to serve those customers (CI05.1). If an office with

walk-in services must close, the district should conduct a public media campaign to inform the public ofthe closure and where to seek help in the future (CI05.2). 

•Make Forms More Available 

Problem: Customers often complain that theyhave a hard time finding the forms they need whenthey need them.Actions: The IRS should make forms more available to those customers who do not use the Internet,and publicize the location of forms to taxpayers (CM02.3).

Beginning in 1999 the IRS will open additional temporary community-based locations during the peak season to make publications and forms available in banks,libraries, shopping malls and other locations (CI04.1).

The IRS should work with state and local tax agenciesto establish one-stop “tax stores,” locations whereforms and other tax services can be provided (CI04.4). 

The IRS has developed new ways to distribute taxforms and publications electronically through CDROM technology, fax-on-demand and personal computers, and should expand the use of CD-ROMs toensure that forms and publications are available in allwalk-in offices. It should also make available masterversions of basic 1040 forms and tax tables in copystores and other locations where they can be photocopied (CM02.2). The IRS should also make expanded

use of the Internet to meet taxpayer needs, supplementing current forms and publications with updatedtax information (CM02.1).

31

rovide information on park openings, river and 

ditions and more. Rangers reach more than twice

outdoor enthusiasts this way. The booth is also

nvenient for customers and open for longer hours

weekends, and the government has saved money

 costs. 

sota, after state tax authorities converted a drive

od stand to an outlet for tax forms, the IRS joined

eration. Today drive-through taxpayers do one

pping at what’s known as the “great Minnesota

er.” 

 Walk-In Services

em: Walk-in offices are often closed when 

s need them most — for example, on weekends

e filing season — and many do not provide key

ns: Beginning in 1998 the IRS will open 

ffices on Saturdays during the busiest weekends

ng season (CI04.2). It should also offer a more

ensive range of services in walk-in offices so

more responsive to customer needs — including

es with the training and ability to solve prob

ter equipment, a full stock of forms on CD

nd other material to serve customers. The IRS

so expand the telephone information system so

ple can find out when and where they can get

ace help (CI04.3). And it should study the feasibility

ing audit appointments to include evenings and

s for the convenience of the customer (CI06.13).

the IRS believes that some customer segments

on walk-in services, before closing a walk-in
convenient tax and other services for small businesses.

Similar centers have been established in Indiana, Minnesota,Mississippi and other states. The Kansas City Service Center established a Federal Tax Deposit Penalty Help Line tohelp business customers make deposits correctly.Many of the actions that the Task Force has called for inother parts of the report will benefit small businessesdirectly and indirectly. The following actions are intendedto benefit them specifically, but apply to the selfemployed and larger businesses as well.

•Help Start-Up Businesses

Problem: Many small businesses struggle right fromthe start, having a hard time simply learning what the taxand regulatory rules are and how to comply with them.The checklist of what is required for a new small businessis daunting (see box on p. 34). Just one of the requirements, the Federal Tax Deposit system, requires businesses with employees to withhold anddeposit a portion of their employees’ wages and salariesfor federal income, Social Security and Medicare taxes, inaddition to state and local requirements. According to theGeneral Accounting Office, a small business in Cleveland,Ohio with six employees would have to submit at least56 federal, state and local tax deposits over the course ofa single tax year, including the collection and payment ofseven different employment taxes. Many make mistakeson their Federal Tax Deposits. While the IRS generallywaives the penalty the first time small businesses make amistake on these deposits, it has not used this first mistake as an opportunity to help small businesses get it rightthe next time.

33

elp Small 

usinesses

ground: Small businesses are both the

owing part of the national economy and a criti

r in the nation’s tax system. They pay billions of

 taxes and file 99 percent of all business tax

Collectively, small business is the nation’s largest

mployer, accounting for 53 percent of private

bs. Small businesses are also the backbone of the

orting and withholding system that assists federal,

 local authorities in collecting taxes. Based on

mbers, it is not surprising that small businesses

 more than half of the compliance cases that the

les. And, despite the vigor of the small business 

any close their doors each year. In 1996, 50,000

went through bankruptcy. When a small business

ouble, tax issues compound its problems. Every

mall businesses, taxpayers and the IRS — stands

y making it easier for small businesses 

heir tax obligations.

with problems like these, the IRS established a

siness Affairs Office and has also developed EZ

simplify tax filing for many businesses, including

 1040 Schedule C-EZ, which let two million

siness owners file a very much simplified return

The IRS has worked with other federal agencies

 a “U.S. General Store” in Houston to provide 
35

Actions: To assist new small businesses, beginning in1998 the IRS should team up with other federal agencies,financial institutions, tax preparers, state and localauthorities and others to provide tax information, trainingand consultative services to small start-up businesses.These services will be designed to make record keeping,filing and payment requirements as simple and easy aspossible (SB01.2). 

The IRS should create and make available to new businesses a start-up kit with multi-agency tax information

(SB02.2). The organization should also assist new employers

who have just applied for Federal Employer IdentificationNumbers with information on relevant tax requirements

(SB01.1). It should send a letter to business customers who

have made first-time deposit errors to tell them if thepenalty has been waived and to tell them how to avoidmistakes in making their next deposit (SB05.1). Furthermore,

the IRS should develop and publish clear, simplebrochures giving tax tips on new obligations as businesses change — for example, when hiring employees,expanding the business, converting from a sole proprietorship to a partnership, incorporating, or shutting down

(SB03.3).

•Communicate More Clearly With Less Paper

Problem: The tax laws — and the regulations, formsand instructions that translate them into reality — arecomplex. Small business people told the Task Force infocus groups that they decided not to hire employees justto avoid dealing with the record keeping, reporting andwithholding requirements. Small businesses need simplerforms, clearer instructions, notices and letters. But gettingit right is such a challenge that they also need special

 Tax Checklist For Starting 

ew Business

 for Employer Identification Number (Form SS-4)

 estimating tax payments (Form 1040 ES)

rt annual taxes, profit or loss (Form 1040,

dules C, C-EZ or F)

rt any supplemental income and loss (Form 1040,

dules E and S)

e withholding for federal income tax, Social 

ity and Medicare (Circulars E and A)

 Federal Tax Deposits (Form 8109B, Over the 

ter or EFTPS)

rt annual taxes (Forms 1065 and 1120)rt capital gains or losses (Form 1065, Schedule E)rt partner’s shares (Schedule K-1)

porations (Form 2553)

rt shareholder’s shares (Form 1120S,

dule K-1)

y vehicle uses (Form 2290)

rt cash payments over $10,000 (Form 8300)

ederal unemployment taxes (Form 940)

uarterly taxes on employees (Forms 941, 943, 943A)

mployees to complete withholding certificates 

s W-4 and W-5) 

 wage and withholding information to employees 

 W-2)

 wage information to sub-contractors (Form 1099)

rt information from W-2s issued (Form W-3)rt information from 1099s issued (Form 1096)
tions for clarity with small business owners and employees (SB03.2); rewrite notices in a manner that they understand (SB08.1); and standardize the format and content of

written responses to reduce inconsistencies in notices thatare sent to small businesses (SB08.5). The IRS should also

find ways to notify small business customers promptly ifproblem notices are generated and mailed (SB08.3), and

also identify notices that can be eliminated or sent lessfrequently (SB08.2). The IRS should develop a permanent

method to seek feedback from small businesses aboutwhich forms, publications and specific line items are themost problematic (SB03.1).

•Provide Knowledgeable, Convenient Help 

Problem: Small businesses have difficulty gettingtheir tax questions answered and problems resolved.Actions: By the 1999 tax season, IRS should providesmall businesses with 24 hour a day phone assistancegeared to their needs, within the menu options availableon the toll-free assistance line (SB07.1) and should also seek

to route telephone calls from small businesses to employees who have the training and the authority to answerbusiness tax questions and resolve account problems

(SB07.2). Furthermore, the IRS should review the existing

and proposed uses of IRS interactive voice response unitsto ensure that small business needs are met in a costeffective manner (SB07.3). Since small businesses prefer to do

business over the phone, the IRS should explore the use oftelephone calls instead of written notices or letters (SB07.4).

The IRS should continue exploring new methods of communicating with small businesses (SB08.4), as well as partnering with trade associations to provide timely, updated

37

. Giving small business this kind of special help,

y when they are starting up, can not only help

inesses in business, but can also drive down the

load, saving taxpayers money.

ns: The IRS should reduce the paperwork bur

mall businesses, encouraging them to use e-mail

e tax account problems (once the IRS develops 

 protect the privacy of taxpayer information 

ail) (SB04.3) and continuing the development of 

 for incorporated businesses and other filing 

B03.4). 

he IRS should expand the successful TeleFile

program to allow many small businesses to use their telephones to file Form

941 and report employment taxes

(SB04.2). The IRS should seek ways to let

small businesses use credit cards as apayment option for tax balances due atno cost to the government (SB04.5). It

should also find out how to help andencourage small businesses to use theElectronic Federal Tax Payment System, conducting focus groups to getfeedback on the system from smallbusiness customers and marketing theelectronic system in ways that makeclear how it can benefit small businesses (SB05.3).

To ensure that correspondence, noticesand forms are easy to understand, the

IRS should test new forms and publica

all Business Customer Survey, MELE Associates, Inc., 1995.
• Promote One-Stop Service

Problem: Small businesses are sometimes frustratedby the time required to deal with so many different government entities — federal, state and local — and withthe many filing and reporting requirements that have similar, but not identical, data needs. They are also frustratedwhen they try to get answers or resolve problems andcannot reach the IRS by telephone or in person, havecorrespondence go unanswered, or deal with IRSemployees who lack the training to deal with businessquestions. Actions: So that small businesses will be able to submit a single report with tax and wage data to meet therequirements of the Internal Revenue Service, SocialSecurity Administration, the Department of Labor, andstate agencies, the IRS should continue to work to support the Simplified Tax and Wage Reporting System program (SB04.1) and develop a strategy to open more one-stop

business assistance centers in partnership with federal,state, and local agencies (SB02.3). The IRS should promote

further use of “joint installment agreements” for businesses that have federal and state tax liabilities (SB04.4). And in

partnership with small business stakeholders, it shouldmake use of electronic tools — such as a small businesscorner on the IRS home page — or provide one-stopinformation, education, and registration service to thesmall business community (SB02.1).

•Help Businesses With Problems 

Problem: Small businesses often have complianceproblems because they don’t understand their obligationsunder the tax code. According to a 1995 IRS survey of

39

¿Como le puedo

servir?”

mation specific to small businesses in a variety of

s. Through association newsletters, trade jour

bsites, and other communication systems (SB01.3),

ould communicate with small businesses more

y.

of the growing number of companies that con

ness in languages other than English, the IRS

mprove multilingual communications with them,

g written, face-to-face and telephone communi

09.1). To begin meeting the needs of some of

stomers, the IRS should — depending on

— provide a nationwide toll-free Spanish lan

ephone service for small business owners (SB09.2).

 also create forms, publications, notices and

s in Spanish (SB09.3).
and accountant groups to help educate individuals who

make deposits for small businesses (SB05.4). The IRS should

test using specially trained employees to make educational telephone calls to new employers, and specifically tonew employers when the IRS first discovers a mistake intheir handling of their federal tax deposits (SB05.2). And it

should expand the approach of the Penalty Help Linedeveloped in Kansas City to provide assistance to smallbusinesses (SB05.6).

To encourage greater consistency throughout the country,the IRS should develop training materials and courses toeducate IRS employees about deposit requirements,penalties and consistent use of reasonable cause provisions for waiving penalties (SB05.5). It should also analyze

the costs and benefits of handling all federal tax depositpenalties in one centralized location (FP04.2).

The IRS should study and make improvements regardingpenalty administration for small businesses, includingconsidering raising the threshold for forgiving penaltiesbased on oral testimony (SB06.1). The IRS should also test

the use of outgoing telephone calls in lieu of writtennotices in certain potential penalty situations (SB05.7). As

described in Section III.b. (see p. 67), the IRS shouldwork with troubled small businesses to help them comply, stay in business, and avoid future tax problems,expanding on successful pilot programs in California,Maine and elsewhere (SB05.8).

41

all businesses, “small business owners continue

ve the IRS as strong in enforcement and general

n providing understandable tax information and

tic customer service.”

he biggest problems small businesses have is

 on their federal tax deposits. The IRS assesses

 deposit penalties, although many are subse

waived or reduced — an average of 40 percent

during a recent three-year period. In addition,

many IRS offices administer federal tax deposit

, and because the interpretation of penalty

ration regulations can be somewhat subjective,

ent treatment frequently occurs. 

sinesses are particularly affected by these prob

e IRS has found that many new business owners

stakes on the forms or during the deposit

and end up facing a penalty simply because 

not understand the requirements.

S Kansas City Service Center, a group of tax

g assistants took a very active approach to the

of deposit errors. A federal tax deposits Help

 established with the purpose of resolving busi

omers’ problems within 24 hours. This group has

e to resolve almost 10,000 issues for each of the

e tax years. Just as importantly, they have been

dentify problems with forms and programs.

resulting from these findings could help reduce

rate on these deposits.

ns: To help small businesses deal with the fed

deposit system, the IRS should work with payroll
resolving a number of problems on the spot.

The Task Force found that the best companies in Americahandle customer problems by making it easy for employees to resolve problems and easy for customers to complain when they are dissatisfied. These companies cherishcomplaints as a valuable source of information abouttheir operations and about underlying problems that theycan fix at the source.When dealing with a company with a good problemsolving system, a customer can get a problem solved withone telephone call, one visit, or one letter. The Task Forcefound tremendous benefits in one-stop problem resolution. Not only does this practice result in much greatercustomer satisfaction, it can also reduce the costs of handling problems — in some cases by more than 50 percent. Every company and public sector department andagency that the Task Force looked at was seeking ways togive front-line employees the ability to solve customerproblems in a single interaction.A good problem solving system also values complaints.Generally, complaints represent the tip of the iceberg.Research shows that fewer than one in twenty peoplewho are unhappy will formally complain to the organization. In the private sector, people don’t complain for avariety of reasons: they feel it is not worth the hassle;they don’t know where or how to complain; they don’tbelieve the company will do anything; or they are afraidof negative consequences. More likely, when peoplehave a complaint, they tell their friends or neighbors;research shows that people with a complaint are likely totell eight to ten other people.

43

reate A 

roblem Solving

ystem That

Works

ckground: When people have a tax problem,

want to get it resolved quickly. When they are

e to resolve it, what may be a simple problem

uickly turn into a complaint. The IRS needs a

 system for solving problems before they become

aints.

RS has Taxpayer Advocates and a Problem Resolu

rogram to assist taxpayers with problems relating

 organization’s administration of the tax laws.

ear, nearly 300,000 cases were brought to the

on of Taxpayer Advocate offices around the

ry, and cases were resolved in an average of 38

ask Force also looked at a successful IRS Taxpay

vocate program in North Carolina that reaches

yers who haven’t been able to get their tax prob

solved through normal channels. The IRS North

na district Taxpayer Advocate, Tina Juncewicz,

n annual “IRS Listens” day. She publicizes the

in area media, and then anyone with a griev

or a question involving the IRS can come in dur

at day and consult privately with a member of

aff. The program has been cutting red tape by
45

required so that taxpayer’s representative, such as anaccountant, can deal with the IRS on the taxpayer’sbehalf — are frequently not honored because the Powerof Attorney information is not available to the IRSemployee assisting them.Actions: One Contact: To ensure that customers get problems

resolved in a single contact, the IRS should establish aprocess in every office that puts any run-around burdenon the IRS, and removes it from the customer (CI02.2). This

policy would require an IRS employee either to solve theproblem or find the office or person who can, and holdthe employee accountable for doing so. This will entailmodification of the current program requirements for“gating” or automatically transferring certain types ofcalls. It will require better training of front-line employees, especially in customer service techniques, as well asempowering them to use their judgment in doing everything they can to resolve an issue before it is transferred.Training and related issues are covered later in this report.The IRS often sends taxpayers letters when there are discrepancies between what taxpayers report on tax returnsand what is reported to the IRS about those same taxpayers by banks, employers or other third parties. The IRSshould ensure that there is sufficient technical staffing atthe telephone numbers given to taxpayers for assistanceon these “underreporter” notices, and find ways to overcome the barriers to resolving these cases by telephone

(CI02.3). It should also develop and carry out a cost-effective plan to expand the number of IRS assistance centers

working on underreporter cases, again — where possible

merican Public: Best Practices in Resolving Customer Complaints. Federal 

g Consortium Study Report. National Performance Review, 1996.

 Force found that a good problem solving system

le for another reason — company after company

 it as a key part of their overall strategy. When a

complaint is handled well, it reduces

costs and can turn a critic into a supporter. When a complaint leads anorganization to understand and fix anunderlying problem, overall performance improves. And, in the publicsector, when a government agency listens to people with problems andsolves them, it helps establish confidence and trust.

• Resolve Customer Problems In One ContactProblem: Customers complainthat it takes too many contacts withthe IRS to get tax problems resolved.They are often asked to play telephonetag with various offices to get theirproblems solved. These difficultiesoften arise because customer data arestored in multiple computer files.Employees cannot solve some taxpayer

problems quickly because the informa

 need is not all in one place, and different files

ain conflicting information about a taxpayer’s

 with Powers of Attorney also make it difficult to

roblems in a single contact. Taxpayers and their

atives complain that Powers of Attorney —

t.

x

 
secure on-line system to improve their accessibility (FP07.1,

FP07.2), and ensure that the units in the service centers that

service these accounts are properly staffed (FP07.3). For a

long-term solution, the Modernization Blueprint calls forthe consolidation of all accounts into a new unified system (FP07.4).

Streamlined Powers of Attorney: The IRS should emphasize to all employees the need to honor all valid Powers

of Attorney and to process them promptly (FP03.1). In addition, the IRS should improve training in this area (FP03.2);

establish a telephone center for authorizations (FP03.3);

improve processing procedures (FP03.4, FP03.5, FP03.6, FP03.8);

establish a centralized computer database to speedauthorizations (FP03.9); and be able to accept Power of

Attorney authorizations electronically and record themimmediately while meeting privacy and security requirements (FP03.10).

•Make It Easy For People To Get

Problems Solved Problem: Taxpayers told the Task Force that theyhave difficulty getting problems resolved and are not surewhere to turn to get help. They complain about theamount of time it takes and say they feel that normalchannels are not responsive to their complaints and problems. Actions: Even prior to the publication of this report,the IRS launched Problem Solving Days, a new initiative

— patterned on the North Carolina “IRS Listens” effort —

to help taxpayers get their problems solved. The firstProblem Solving Day was held on November 15, 1997,at all 33 IRS district offices. Approximately 6,300 taxpay47

more telephone calls instead of written notices

e cases (CI02.5).

where issues could best be resolved in writing,hould specifically advise taxpayers on what

on and documents they need to provide (CI02.4).

ld help keep customers from wasting time on

e calls when written documentation is required,

g to IRS when a quick telephone call will resolve

em. The IRS should also conduct an analysis

lop plans to refine and improve its toll-free ser

elp clarify to customers what can and cannot be

by telephone (CI03.2, CI03.3).

red Employees: To ensure that employees are

d to help customers, the IRS should ensure that

ate supply of forms and materials are available

employees to do their jobs (CI03.6); that employees

erly and promptly informed of new information

d that employees have access, when appropri

e multiple databases and systems needed to

ustomer issues in one contact (CI03.8). Working

National Treasury Employees Union, the IRS

reate more flexible job descriptions to better sup

workload demand (CI03.1). To empower employees

wer telephone calls, the IRS should provide sim

gency-wide guidance that spells out what kinds

employees are able to resolve over the telephone

d revisit these guidelines on a continuing basis to

procedural changes or training needs (CI03.5).

on Support: To begin to address the problem of

computer files, the IRS should collect its “Non

le accounts” in one place, load them onto a
49

ded the event, and the vast majority were

ously satisfied with the service they received. In

percent of customers who responded to the day’s

on survey gave the IRS the top mark for overall

The IRS will continue to hold these sessions once

onth within every IRS district (CI07.1).

ons About Problem Solving Days?

IRS Taxpayer AdvocateTo strengthen the IRS Taxpayer Advocate, the Administration will:• expand the powers of the Taxpayer 

Advocate to provide relief when there have been unreasonable delaysin resolving a taxpayer’s issue or when a taxpayer may be subject to serious harm; 

• increase local and national Taxpayer 

Advocates’ staffs; and 

• expand the Taxpayer Advocate’s 

reporting obligations to Congress to cover informal interventions.

Independent Citizen Advocacy PanelsThe Administration is creating 33 localCitizen Advocacy Panels to assist taxpayers with problems. These Panels willbe made up of private citizens and will:• refer taxpayer complaints to the 

Taxpayer Advocate;

• refer complaints about resolution of 

cases by local Taxpayer Advocates tothe national Taxpayer Advocate;

• monitor local IRS customer service;• track complaints on a local level;• make public reports; and• make recommendations for 

improvements to the national Taxpayer Advocate and the IRS Commissioner.

The Citizen Advocacy Panels will bephased in, with the first four beginningoperations in selected IRS districts in1998 and expanding nationally as quickly as possible.

-800-829-1040

on to creating Problem Solving Days, the Admin

took other steps this fall to improve IRS perfor

 resolving taxpayer complaints. On October 10,

esident Clinton announced two major steps —

gthening of the office of the Taxpayer Advocate

creation of Citizen Advocacy Panels nationwide

es on opposite page).

r, so that IRS employees can help taxpayers 

ons of emergency or hardship, the IRS should

nt a policy that allows District Directors to

and issue emergency tax refunds to customers 

usiness day (FP11.1).

And Use Data On Complaints 

em: Some problems can drag out for two or

rs if the IRS and the taxpayer don’t agree on an

S management needs an effective complaint

system to ensure that taxpayer complaints are

dressed promptly. That system must also elevate
51

blems that aren’t being addressed to higher lev

 organization. Such a system should also help

entify — and then address — any systemic

t are creating problems for taxpayers.

ns: Beginning immediately, using the Taxpayer

’s Problem Resolution Information System, the

d track complaints (FP06.1) and, if a complaint is

olved after a reasonable period of time, reassign

ext higher management level (CI07.2). To tighten

bility in the future, the IRS should set up a sys

ystematically raises the priority of cases that

been addressed to ensure that the appropriate

ent level is involved (FP06.2). It should also design

to ensure that individual employees and 

 are held accountable for the fair and speedy

n of problems (FP03.7). The Taxpayer Advocate

evelop a process for identifying solutions to sys

blems identified by taxpayers. These solutions

e brought to the attention of the Commissioner

cessary (HP13.3).

Prepare For A Paperless 

Future

Background: Currently, the IRS processes morethan two billion transactions a year, including 200 millionindividual and business tax returns, interest and dividendforms, employer withholding reports, and payments. Mostof these transactions still take place on paper and have tobe converted into an electronic format by scanning ormanually entering data — an error-prone and resourceintensive process.The steady progress of TeleFile gives a hint of the potential for electronic filing: less paper, no mail, error rates100 times less than with paper returns, faster refunds, andhappy customers. David Gergen, Chairman of the AwardsProgram of the Ford Foundation and Harvard’s KennedySchool of Government, said of the award-winning Telefileprogram, “Filing taxes can often be a complicated, timeconsuming process. It’s good to see that the IRS is simplifying the procedures and reducing the paperwork for citizens.”

II.f

A. Alfred Taubman Center for State and Local Government

John F. Kennedy School of Government, Har vard University
ite the advantages, only 10 percent of the 200

ndividual and business returns are filed electroni

en though a much higher percentage of returns

ared on computers. The actions recommended

ask Force to increase the use of electronic filing

 the positive momentum of the IRS Electronic Tax

ration program.

e IRS still relies heavily on paper for its one-on

sactions with taxpayers, it is beginning to use

gy to disseminate information to taxpayers more

— primarily through the Internet. As part of a

 world that is being revolutionized by informa

nology, the IRS is already making aggressive use

orld Wide Web to deliver information and forms

yers. Last tax season six million forms and publi

were downloaded from the IRS website and 117

its were logged. 

ne with access to the Internet, the IRS Homepage

y the best place to go for tax forms and informa

 available 24 hours a day. It has virtually all IRS

d publications. It summarizes tax regulations and

nswers to the most frequently asked taxpayer

s, among other information. The IRS Homepage

blished a monthly (bi-weekly during the tax sea

tronic publication called the Digital Dispatch,

as the latest tax news from the IRS. 

f a long-term strategy to set up a system to

axpayer questions quickly and expertly, the IRS

nswering taxpayer questions over the Internet.

he last fiscal year, it answered more than 52,000

essages about tax laws and regulations. Sixty 

53

percent of the e-mails were answered in one dayand 93 percent within three days. Like private sector firms and other government agencies, the IRSmust overcome issues related to electronic signatures, security and privacy so that all transactionscan be carried out safely via the Internet.

• Upgrade Technology To Improve 

Customer Service Problem: The IRS has not had the technologyto support customer service or to support IRSemployees in ways that have become standard inprivate industry and are increasingly common ingovernment.Actions: The IRS Modernization Blueprint willimprove assistance to customers by making accurate, electronically accessible and up-to-the-minuteinformation available on taxpayer returns andaccounts while protecting taxpayer privacy (CI01.7). 

• Offer More Electronic Filing Options 

Problem: The IRS and taxpayers are only beginning to take advantage of the benefits of electronic filing. Many taxpayers are unaware ofthe benefits. Some taxpayers are not able to fileelectronically because their wages or interest ordividend income exceed a certain level. Issues surrounding electronic signatures and documentslike W-2s that normally accompany returns, plusprivacy and security concerns about electronictransactions on the Internet, also keep the electronic numbers down.
55

ns: 

eleFile: By 1998 the IRS should increase by 3

r about 10 percent, the number of taxpayers

eligible to use TeleFile — the telephone filing

09.2). The IRS should market TeleFile aggressively

ual taxpayers (FP09.5), and extend TeleFile for

s to allow small companies to meet federal tax

porting requirements over the phone (FP09.3). The

IRS should also continue to expand eligibility for TeleFile by raising the dollarceilings on income for electronic filersand by raising the dollar limits forinterest and dividends in TeleFileoptions.

Develop Paperless Tax Filing: The IRS

should increase the number of formsthat can be filed electronically and

ustomers about the benefits of electronic filing

hassles, fewer contacts with the IRS, and faster

P09.4). To get a truly “paperless” system of elec

ng, in 1999 the IRS should work to eliminate the

mailing in W-2s, other forms and paper signa

7). The IRS should also determine how to issue

ectronically (NC02.11, NC02.12). 

th the Private Sector: The IRS should solicit ideas

ate industry and tax practitioners to increase the

ctronic filing (FP09.1). The organization should

uct extensive market research to find out how

c filing can better meet customer needs (FP09.6),

his information as a basis for new services (FP09.9).

These services should include allowing taxpayers toresolve tax questions by e-mail, rather than having towrite or telephone the IRS, if the IRS can do so withoutjeopardizing taxpayer privacy (FP09.10). Also, tax practitioners should be offered the option of filing an electronic

Power of Attorney which could be processed in one dayinstead of the average of 26 days it currently takes toprocess the hard copy version (FP09.11).

•Introduce New Payment Options 

Problem: Although 15 million taxpayers receive taxrefunds through electronic deposits to their bankaccounts, there are no provisions for taxpayers to useautomatic withdrawals, debit cards or credit cards to paytheir taxes.Actions: For the first time, beginning in 1999 taxpayers who file their returns electronically will be able topay their taxes with a direct withdrawal from their bankaccounts — in much the same way consumers now paytheir mortgages or utility bills (FP09.8). The IRS is also seeking credit industry partners to pilot-test credit cards for

taxpayers who file electronically in 1999 (FP09.12). The idea

is popular with taxpayers, and a number of state andlocal jurisdictions have already successfully allowed theuse of both debit and credit cards for tax payments.

•Promote One-Stop Service On A World Class 

Web Site On The Internet Problem: As the information technology and communications industries evolve, the IRS will need to continue to move aggressively to take full advantage of thepotential of the Internet to provide enhanced customerservices on its website.
57

ns: The IRS should continue to improve and 

he use of the Internet to provide new services 

ucts (FP09.13). 

Question for the IRS? 

S Homepage on the World Wide Web 

w.irs.ustreas.gov III. A Customer Service Revolution In 1993, President Clinton issued an Executive Order calling for a “customer service revolution” in how government agencies provide services to the American public. Nothing less could change the underlying systems and behavior that have evolved in many government agencies over decades of doing business the old way. Since its creation in 1862, the IRS has always had two roles. It is charged with collecting nearly all of the rev- enue due to the federal government. Yet it is also expect- ed to promote voluntary compliance with the tax laws by serving its customers, the taxpayers. As the National Commission on Restructuring the Internal Revenue Ser- vice brought to light in its 1997 report, the IRS often gets conflicting messages from oversight organizations about which role comes first. In the past, the IRS has heavily favored tax collection, with customer service taking a back seat. Perhaps this is no more clearly illustrated than in staff distribution: 60 percent of the more than 100,000 IRS employees are engaged in enforcement, 8 percent in

customer service.5 Similarly, the current mission statement

of the IRS does not place enough emphasis on customerservice. The President, the Congress, oversight bodies and thepublic have recently said in no uncertain terms that they

5 IRS 1996 Data Book.
59

ore than tax collection from the IRS. They are

or the same customer service revolution that has

med American industry over the last decade.

pectations have been rising, especially as infor

echnology has enabled banks and credit card

es, for example, to offer information and service

 a day with even higher standards of accuracy,

and convenience. National parks, the Postal Ser

 other public agencies, including federal 

y agencies, are showing that it is possible to pro

omer service that is equal to the best in business.

ent Clinton said on October 10, 1997, “It is

t in spite of our best efforts, there remain signifi

blems and challenges at the IRS.” To achieve hange in how the IRS interacts with the public,

nization must fundamentally change how it views

s taxpayers. The IRS must work much harder to

violations and penalties in the first place and turn

n-one enforcement as a last resort. Old measures

gly emphasize enforcement must be balanced

w measures that encourage customer service. And

must shift how it selects, trains and supports its

es so that they can provide the service that the

n people deserve.

anges could lead to the kind of cultural shift that

d so that the IRS can not only provide first-class

ut also regain the trust and confidence of its cus

— the vast majority of America’s taxpayers who

d, obey the law and pay their fair share.

III.a Treat Taxpayers

As Customers

“When it comes to 

the IRS — indeed when 

it comes to every part 

of government — our

philosophy is simple: the

taxpayers don’t work for

us, we work for them.”

Vice President Gore

Background: Making the shift to a customerfocused organization requires major changes for theIRS — listening to customers through surveys andother methods, measuring how well it serves customers, holding managers and employees accountablefor how taxpayers are treated, and acting rapidly toaddress complaints. In sum, it requires a revolution incustomer service.The problem, in this case, is not information; the IRSknows a lot about its customers. Using surveys andfocus groups conducted by the IRS and outside groupssince the 1960s, the Task Force was able to get a clearpicture of the IRS customers. The data documentedhow different the needs and concerns were of differentcustomer segments. Looking at five different customersegments — individuals, the self-employed, smallbusinesses, large businesses and tax preparers — theTask Force found that each group had very differentneeds at different points in time.Telephone assistance illustrates the differences. All taxpayers want improved access on the telephone, fewerbusy signals, shorter waits and more accurate responses to their questions. Small business people, for their 
Customer Segment Profiles

61

Enter job market, relocate, retire, receiveinheritance, marry, have a child, pay childcare expenses, die, divorce, buy or sell ahome.Start business, keep up with major regulatorylaw and market changes, deal with investment or financial loss, keep tax records forboth individual and business taxes.Start new product lines, hire employees,develop the business, add new locations,incorporate, incur casualty or operating losses, change technology, keep tax records, prepare tax return(s), sell or merge business.Hire employees, develop new product lines,add space or equipment, experience domestic market or regulatory changes, restructure,add fringe benefits, change business strategy,maintain tax records, sell or merge business,close business.Educate the public about tax requirements,prepare returns, recommend ways for the IRSto improve operations and customer service.

e

bject

x

s).

s,

za

e

0

ev

d.

za

e

that

pay

on

tion

x

e

rn

Selected Key Events part, want to be able to reach the IRS after business hours

and on weekends. Large businesses want to get throughduring business hours but want their employees to beable to call the IRS after work. Individuals and the selfemployed want to talk to the IRS at almost any time ofday 

— whatever accommodates their particular situation.

Tax practitioners were the most satisfied group; they werepleased with the dedicated telephone services that theIRS has in place in local offices during business hours.A second Task Force finding was that all groups face periodic changes in their tax status. They have to learn newtax rules at precisely those times when they confrontmajor changes in their lives — getting married, buying ahouse, having a baby, starting a new business, experiencing a spouse’s death, or retiring. Although they want to“get it right” at these times in their lives, learning aboutchanging tax requirements is rarely a primary consideration.The Task Force found that there were other customercharacteristics that were important to how the IRS deliversits services. Language is a growing issue for both individual taxpayers and businesses, with more than 13 millionSpanish-speaking adults in the U.S. today and more than860,000 Hispanic-owned businesses. Many older Americans need forms with larger type and convenient in-person assistance. First-time filers need customized help.Customers who have been hit by a flood or other naturaldisaster need extra time and special help. Finally, theTask Force found that customer needs change over timeas the population itself changes. Actions throughout this report address the needs of variouscustomer segments. To continue the focus on customer
63

on, the Task Force calls for customer feedback to

ated effectively into the IRS measurement system

on III.c.).

mination of private sector models, the Task

nd three common characteristics among suc

rvice companies — they value and act upon

 feedback; their organizations are aligned to

tomers; and customer satisfaction is at the core

measurement systems. 

mer-focused organizations, data about customers

erything the companies do. They influence what

anies produce and market and the services they

These companies value customer feedback and

ds* / Potential Impact on the IRS

• Increased demand for assistance

990) • Increased medical expenses,

pension income

 population

r old • More complicated returns

• More use of preparers

s

rson • Need for assistance after normal 

working hours and on weekends

• Special tax credit issues, such as the

Earned Income Tax Credit

uage speaking population

6% • Increased need for tax products 

r the and information in other languages

d taxpayers

94 • Need for better educational materials for both the employers and the employees

 of Labor Statistics

complaints, and customers’ concerns are assessed as aroutine part of decision-making. Managers welcome feedback from front-line employees and seek opportunities tointeract with customers. These companies are also organized to respond to customer needs and see customers asa core part of their mission. 

•Lead The Way 

Problem: If the IRS is to become customer-focused,senior managers across the organization must send aclear message that change is required and remove thebarriers to providing top-quality customer service.Actions: Leadership will set the pace for the reinvention of customer service in the IRS. Managers from theCommissioner on down should spend time each yearserving customers directly (HP18.2). IRS leadership should

review and remove barriers, both organizational andstructural, that prevent effective job performance (HP11.3)

and establish a uniform set of leadership competenciesfor all levels of management (HP18.1). Managers will encourage and empower teams in a customer-focused workplace. IRS employees trained toanswer a customer’s inquiry should be allowed to answerthat question whether assigned to that specific issue ornot (HP11.2). Furthermore, to encourage greater innovation,

front-line managers should be able to approve employees’ suggestions to improve customer services and products, but need to get the approval of the next level ofmanagement before turning down their suggestions. Anyproposals that are turned down need to be shared withthe Ideas Advocate (See Section III.d.) (HP11.1). 
65

System That Focuses On Customers

em: Most of the IRS is organized around 

y-defined functions, rather than the needs of 

s. Furthermore, there has not been an internal

n for customers or for spreading the ideas and

tices that would improve customer services and

 The Task Force found that customer satisfaction

e been rarely used in making operational deci

d have historically had only a limited impact on

ations. For example, without knowing how

t the dedicated telephone service is to tax 

, the IRS had planned to eliminate it as part of a

utting exercise. In another example of the organi

nternal focus, the Task Force found that the IRS

ed its notices for clarity on employees already

with the subject of the notice, rather than on 

s.

ns: The IRS should begin to refine customer 

 and key events for each of those segments as

te to those customers’ tax responsibilities (CF02).

gnment of the IRS organization should include

asis on excellent customer service (CF03). Many of

mmended actions in this report will help 

system that is focused on customers — a mea

 and performance system that values customers

edback system that regularly obtains and uses

 input (CF04). 

hould create a long-term program to make its

more customer-friendly. The program should

he IRS workforce at all levels; challenge long

es and beliefs about how the organization works

es out its mission; and hold the IRS and its

employees accountable for providing excellent customerservice (HP10.1). To be successful, the program should use

four fundamental strategies: • Establish and write out a clear mission statement 

to guide the bureau; 

• Engage all executives and managers in leading 

change; 

• Align the bureau’s policies, procedures, systems,

and structures to support employees as they worktoward the accomplishment of the new purpose; and

• Gain the commitment of all members of the 

workforce (HP10.2, HPI0.3).

The IRS should also continue to compare its performancewith benchmarks from private industry and other government agencies and establish a means to institutionalizebest practices (HP13.1). Another important method of 

reinforcing the organizational change is to communicateearly successes in program and policy changes throughout the organization (CM06.1).

•Seek Changes In The Tax Code 

Problem: The Tax Code’s complexity burdens taxpayers and impedes compliance. While the Task Forcedid not focus its efforts on tax reform, it identified a number of ways in which the complications of the tax codemake it difficult for the IRS to meet customers’ needs. Actions: As it has done in the past, the IRS shouldidentify provisions of the Internal Revenue Code requiringimprovement or simplification, consistent with otherimportant tax policy goals — including considerations offairness, equity, economic efficiency, progressiveness and
67

collection (FP05.1). The IRS should maintain ongo

munication with the Treasury Department to

existing Code provisions that are sources of 

nt compliance or administrative burdens for 

s or the IRS, and develop proposals to reduce

dens (FP05.2). In addition, the IRS should work

ate sector groups, such as bar associations, pro

 tax associations and academic groups, to identi

evelop proposals to forward to the Treasury

ent to improve and simplify the Code (FP05.3).

p A New Mission Statement

em: The IRS mission statement does not provide

rection that emphasizes service to the taxpayer.

ns: The IRS should develop a simpler and more

mission statement that commits to serve taxpayers

mers (CF01). In line with the new IRS mission, tax

ill be able to pay their taxes with a check made

e United States Treasury instead of the IRS (FP08.1).

III.b Ensure Fair

Treatment ForTaxpayers

Background: Voluntary compliance is the cornerstone of the U.S. tax system. Over the past 15 years, 83cents of every dollar due to the U.S. government hasbeen paid voluntarily by taxpayers, a compliance ratethat is one of the highest in the world. Nonetheless, therate has been essentially unchanged for almost twodecades.The stakes are high. The voluntary compliance rate of 83 percent still means that 17 cents of every dollar due isnot voluntarily paid. Every one percent in additionalcompliance represents an additional nine billion dollarsfor the U.S. Treasury. Uncollected revenue affects everyAmerican who pays taxes in full and on time, and givesan unfair advantage to those who do not pay their fair share.The IRS, responsible for fairly collecting the money topay America’s bills, seeks the most effective strategies todo so. Like most other regulatory agencies, the IRS hasfocused on one-on-one enforcement — audit, collection,and investigation of fraud. Last year, IRS enforcementefforts collected $30 billion in revenue beyond taxes paidvoluntarily, pushing the collection rate up to 87 percent.Penalties, part of the “downstream” end of compliance,have mushroomed. From the original 13 penalties listedin the 1954 Internal Revenue Code, today there are about
69

lties, which amounted to $13.2 billion in 

nts in 1996.

s have several appeal options if they do not

h the IRS’s position on the amount of taxes they

e is to seek an internal remedy using an IRS

Officer. Appeals officers may reverse all or part

it recommended assessment, based upon indi

se circumstances and facts. Currently, there is no

racking system that records the reasons why

it-recommended assessments are reversed while

e not.

gly, the IRS and other regulatory agencies are

ng that giving more attention to early interven

preventing problems have a significant impact

iance. Regulatory agencies are working

 — seeking to understand where compliance

 lie and to focus efforts on them. The Task Force

t in many other agencies this involves establish

nership with the groups that are regulated.

 on prevention and partnership is getting results.

ple, the Coast Guard, without adding a single

n, worked with the towing and barge industry to

ce safety violations and cut by half fatalities

ew members. By working with the pharmaceuti

ry, the Food and Drug Administration cut the

me for approval of drugs from 23 months to 15.

l IRS research and pilot projects demonstrate

its of moving compliance efforts upstream. For

 in 1995 the North Florida District Office’s

staff analyzed the problem of 6.2 million returns

y that contained Social Security numbers for

Moving Compliance Efforts Upstream

Prevention

Lower cost per case

Less burden on taxpayers

1-On-1 Enforcement

Higher cost per case

More Intrusive

Enforcement Servicing Accounts Handling Returns Pre-filing Systemic Changes

Targetenforcementto increaseproductivity.Use liens andseizures as alast resort.

Use information and“soft” letters,telephonecalls, andnotices to correct accountproblems.

Improve returnprocessing —e.g., correctmath errors.Identify issuesearly andadjust refunds.

Improveforms andpublications.Educate taxpreparers andcustomersegments, e.g.,small business,first-time filers.Tell taxpayersabout recurringproblems.

Identify underlying problems.Work withtax preparersand industrygroups.Changelaws andregulations.Join withstate and localgovernments.

dependents who were claimed on at least two tax returns(a dependent can be claimed on only one return). Ratherthan assuming this entire population of taxpayers wasflouting the law, the researchers took a closer look andfound that there were a number of reasons for the duplicate numbers. Many taxpayers had correctly claimed thededuction. Some had made a mistake on a Social Security number, others simply didn’t understand the law andstill others were knowingly claiming a fraudulent deduction. Furthermore, about a third of the taxpayers madethe same claim year after year.The North Florida District researchers next tested a tailored approach to improve compliance. They sent two“soft” letters to a sample of some 14,000 taxpayers. One
71

ed them simply to correct the problem the 

g year if necessary. The second letter added a

or an amended return. Both worked; the percent

xpayers who repeated the duplicate claim

from a rate of 35 percent to 15 percent. Because

st, the IRS will be able to focus its future enforce

orts on the much smaller group of taxpayers who

respond to the “soft” approach. The IRS estimates

g this approach in the next filing season could

more than $100 million in annual revenue and

s burden on taxpayers who want to get their

ht.

nnovative group of IRS employees, the Ag Team,

 working with agricultural businesses in Central

a’s wine-producing San Joaquin Valley to help

and labor contractors comply with tax laws. The

 activities include visiting farm shows and fairs,

 speaking about taxes at the annual growers lun

Ninety-five percent [of these businesses] want to

 right, but only fifty percent know how. We still

be tough with the five percent who could care

the real payoff is in teaching the honest folks the

ys one of the Ag Team members. In 1993 busi

 the Ag Team’s jurisdiction owed the government

llion in past due taxes. As of last year, that figure

n to $240,000.

e in the country similar approaches to working

ustries are being tried and adopted by the IRS. In

e fishing industry, battered by brutal foreign and

 competition for depleted fishing stocks, many

n developed serious tax problems, from unre

come to improperly claimed credits for fuel

taxes. To resolve the fuel tax problem, the IRS sent a lowkey letter to about 1,400 fishermen informing them of theproblem and indicating that if it applied to them, theymight want to amend their tax returns. More than 1,000of them voluntarily did so and sent in payments, whichtotaled more than $500,000.The Task Force found that encouraging voluntary compliance requires a range of approaches. No single organizational approach or model can be applied across the IRSor across every industry. What works with Californialabor contractors may not work with restaurant owners in New York City, so research and customer feedback iscritical to developing effective approaches. The specificstrategies may vary by location and customer segment,but these principles are common to nearly all situations:• Help people understand their obligations and 

how to meet them;

• Catch problems early;• Treat taxpayers equitably;• Work with customers and others who are affected;• Decrease the burden on taxpayers;• Test alternative strategies; and• Use enforcement as the last resort.

•Help Taxpayers Get It Right

Problem: Like most other regulatory agencies, theIRS has focused more on pursuing violators than on preventing violations. Prevention is less costly for the IRSthan traditional one-on-one enforcement, far less threatening and traumatic for taxpayers, and, as pilot projectsand best practices from other agencies demonstrate, more effective in some situations.
73

ns: The IRS should identify compliance trends

omer segments where tax assistance, education

r “upstream” methods can help people pay their

rectly, thus avoiding tax trouble. The IRS should

 appropriate — expand prevention strategies,

he approach tested by the North Florida District

 Research and Analysis, to other districts (CI06.2).

ate more effective preventive strategies, the IRSontinue to develop its compliance research 

 and models to analyze compliance behavior. 

 also continue to support existing research and

programs in district offices and the data models

art of the research database (CI06.1, CI06.3).

ronic Transcript Delivery System has been tested

all-scale field testing. This system was devel

provide fast, accurate taxpayer information to

s who have been authorized by Congress or

plicit permission by taxpayers to receive it. This

 being tested to provide income and compliance

on electronically within 24 hours rather than

ven weeks. To help people get the right informa

 the IRS when they need it, the IRS should roll

ranscript delivery system (CI06.4) to provide more

information to customers and to authorized third 

n a 24 hour turn-around. This should translate into

oduction of tax records for people seeking bank

ss red tape for disaster victims struggling to put

s back on track, and — an important benefit to

nd the government as a whole — less loan fraud.

hould develop a transition plan to improve com

CI06.5), and find a way for districts to share effective compliance improvement strategies more easily (CI06.6). It should also establish a new internal measure- ment system, the Alternative Treatment Revenue Measure, to give districts credit for results from these new compli- ance strategies (CI06.7). The IRS should move more of its workload “upstream” in the compliance process to reduce costs and to resolve customer account problems sooner (CI06.9), and a new Strategic Compliance Planning Model should allocate resources to areas that have suc- cessfully improved compliance (CI06.8). To improve the consistency with which compliance cases are handled and to ensure that smaller cases are resolved before they escalate, the IRS should test new workload selection criteria (CI06.10) and include these criteria in its modernization program (CI06.11). These new workload selection criteria should allow smaller dollar cases to be resolved quickly. Resolving accounts early in the collec- tion process will mean less burden, less interest and fewer penalties for taxpayers and lower costs for the IRS. •Promote Fair, Consistent Treatment Problem: Inconsistent treatment, slow resolution of cases, and penalties that are unevenly applied contribute to taxpayers’ perception that they are not treated fairly by the IRS. Currently, customers living in different IRS juris- dictions may get different appeal results on similar issues following an audit. A 1987 IRS report described many inconsistencies in the use and administration of penalties, even among employ- ees in the same office, because of differing attitudes about fairness, noncompliance and the purpose of penalties. In 1992, the IRS opened an Office of Penalty Administration
75

e inconsistent administration and measure the

ness of penalties. However, with 40 percent of

 being waived today, the Task Force questioned

the current system of penalties was working

y to encourage on-time payment of taxes with

e burden on taxpayers. Some even worried that

m has evolved into one in which penalties can

o raise revenue, rather than to change taxpayer

ns: To promote greater consistency in the

process, regardless of where a taxpayer lives, 

hould develop an automated database to record,

and use national appeals data to promote fair

t in appeals (CI06.12). The organization should

e a comprehensive review of the fairness and

ness of all penalties, report to Congress and

ommendations for legislative changes (FP04.1). 

mline the overall process for handling penalties,

hould consider raising the current administrative

 giving employees expanded authority to elimi

educe penalties on the spot, during first contacts

payers and based on oral testimony (FP04.3). This

ow employees to close more cases and reduce

nalties in appropriate circumstances, without

 documentation or other more formal verification.

III.c Measure What

You Want To Get

Background: The Internal Revenue Service is ahuge organization that, consistent with established management principles and the Government Performance andResults Act, uses a sophisticated measurement system togauge its performance and that of its employees. However,recent testimony before Congress demonstrated that thissystem includes measures that have inadvertently resultedin the unfair treatment of taxpayers.In early October 1997, Acting Commissioner Mike Dolansuspended the use of dollar goals and quotas to rank the33 district IRS offices based on their financial results; theuse of goals for field offices for revenue from collectionsand audits; and the inclusion of penalties as part ofexam-recommended assessments. In announcing a complete ban on these and any similar measures that mightlead to unfair treatment, Vice President Gore said, “Oneof the points the IRS front-line employees made to usover and over again is: ‘You get what you measure.’” If you have a performance measurement and rewards system based on dollar goals, it can drive employeestoward actions that can lead to problems in their relationship with taxpayers.The Task Force found that a balanced system of measuresis a core management tool in successful companies. This
77

is what John West, who built the measurement system at Federal Express,calls “the three legs of the stool” —customer service, employee satisfaction, and business results. At FederalExpress, the CEO and other top executives spend a half day each week personally resolving employee grievances.

us pool for FedEx executives gives equal impor

business performance, employee satisfaction and

r satisfaction. At American Express, the evalua

mula includes traditional shareholders’ indicators

ess success, such as return on equity and net

owth, and productivity measures such as cost per

ally important, however, are customer and

e satisfaction. Customer satisfaction measures

imeliness and professionalism. Employee satis

urveys count for 25 percent of management 

ons. 

Business Results

Customer Satisfaction

Employee Satisfaction

In recent years, the Government Performance and ResultsAct has required federal agencies to begin measuring theeffectiveness of their programs and their overall performance. President Clinton’s Executive Order 12862, “SettingCustomer Service Standards,” encouraged these agencies touse customer satisfaction in their performance measures. TheTask Force found that public agencies with strong enforcement missions, such as the Securities and Exchange Commission, the Occupational Safety and Health Administration,and the Customs Service, are creating customer service standards and measures that encourage voluntary compliancewith the law. They are also using customer feedback toimprove operations. Customer service standards includesuch measures as customers’ assessment of courtesy, timeliness, clarity and accuracy of information.Under a balanced scorecard system, the IRS would rewardthe success of a customer-oriented approach to tax collection, heading off tax problems before they reach enforcement. Similarly, an employee might be rewarded for a goodrecord of solving customer problems with one telephone callrather than for cutting calls short because the goal is tospend as few minutes per telephone call as possible.

•Create A Balanced Scorecard

Problem: IRS performance measures are productiondriven, overvalue enforcement, focus on isolated steps, notoutcomes, and may inadvertently encourage unfair treatmentof taxpayers. However, getting rid of the wrong measures isonly part of the solution; the other part is to put the rightmeasures in place. The lack of balance in the IRS’s measures is illustrated by the1996 IRS Data Book. Page after page describes financial and
79

ent results in detail — $1.5 trillion collected,

on collected from delinquent accounts, 10,000

of everything from jewelry to houses and cars,

liens, 3,109,000 levies on wages and accounts,

quests for a grand jury, and numbers of indict

onvictions and individuals “sent to prison” by

et Table 10, “Taxpayer Assistance and Education

,” takes up only one-third of a page in the 44

ument. It records 99 million taxpayers assisted

one, but says nothing about how many callers

busy signals or were placed on hold. It reports

million taxpayers visited walk-in service sites but

ing about how long people waited or if they

e to get the forms or answers they needed. And,

ll the workload statistics, there is nothing about

le who do the work, other than their number,

race or national origin.

ns: Effective October 1997, the IRS banned

 that used enforcement activities to rank districts

n dollar goals to districts and service centers

an immediate next step, in December 1997, the

he National Treasury Employees Union (NTEU)

 Bob Tobias conferred to determine a joint

nagement approach to identify additional mea

t could lead to mistreatment of taxpayers and

ld be discontinued. The IRS should also work

NTEU to design and test, in 1998, a balanced

d that should rate the performance of the IRS and

yees on: (1) customer service; (2) employee sat

 and (3) business results (MS02). The balanced

d should draw on direct customer feedback,

including an annual independent survey of customers(MS02.1), and on input from employees in an annual survey(MS02.2). 

•Measure Performance On The Right Things

Problem: An organizational emphasis on dollarscollected from enforcement activities discourages managers from putting resources into customer service, outreach, education, or creating partnerships with specificindustries to correct or prevent tax problems. The TaskForce found little room in the existing measurement system for managers or staff to be acknowledged for revenue generated as the result of successful efforts toencourage voluntary compliance. The goal is compliance— the measurement system needs to focus on the goaland encourage multiple strategies to achieve it.

A Balanced Scorecard: Illustrative Measures

Business

Results

q % of customers

complying with taxlaws

q % accurate returnsq % returns with full

payment

q revenue collectedq unsecured dollars

(dollars lost+dollarsowed)

q cost of workq tax gap (a measure of

non-compliance)

Customer Satisfaction

q % satisfied customersq convenient accessq accuracy of products

and services

q courtesyq clarity of communicationq completeness of

resolution

q timeliness of services

Employee Satisfaction

q leadership and managementq customer knowledge

and empathy

q partnership with

unions, local businessand others

q quality of worklife
81

ns: 

nicate Standards: To send a clear message across

nization that customer and employee satisfaction

rtant, the balanced scorecard needs to be inte

th performance measurement, management and

rd systems. The IRS should begin by putting in

ndards that clearly describe expectations for

results, customer satisfaction and employee sat

(MS03.1). It should revise the critical evaluation

 and the reward structure for employees, begin

h executives and managers, to reflect a balanced

ment system (MS02.3).

ability and Recognition for Performance: The IRS

ke a number of steps to support and reinforce

n how it measures the performance of the 

n and its employees. It should not only make

every employee that rude or discourteous treat

axpayers is unacceptable, but should also pro

e reinforcement for positive behavior. It should

 specific customer service expectations for indi

n key high-level, high-visibility positions (HP05.1)

ific standards for customer service in every man

rformance plan (HP05.2). To make it clear to front

loyees that it values customer service as well as

 performance, the IRS should first rewrite the

ob elements for all customer service representa

6.1) and then for other positions, especially those

irectly with the public (HP06.2), to reflect customer

on outcomes. 

cognition: The IRS should move from individual

for performance to a system that rewards

employees for successful team efforts (HP07.1). It should

develop a revised system of measures that goes beyondthe current emphasis on individual productivity (HP07.2) to

emphasize team accomplishments, especially in providing excellent customer service. Individual special actawards should also be focused on excellence in competencies and customer service (HP07.3). 

The IRS should set up a competency-based pass/failappraisal system for employees (HP03.1) that promotes

ongoing learning, counseling, and training geared to individual needs (HP03.2). This new system should separate

individual appraisals from awards, although both shouldremain focused on excellence (HP03.3). The IRS should also

evaluate the merit of making changes in the pay systemin the future (HP04.1).

Recognize Customer Service: IRS managers and executives should reward and recognize employees who provide outstanding customer service, introducing such

rewards as recognition for outstanding customer servicemanagers, peer customer service awards, and awards foroutstanding field executives in customer service excellence (HP16.1, HP16.2). 
83

Many of their letters and e-mail messages describe IRSemployees battling delays and roadblocks to do their jobsright — such as extracting needed information from separate and incompatible computer systems to solve simpletaxpayer problems.“This job is frustrating enough without having to feel likean idiot because it takes so long to do things. The computer goes down half the time, sometimes in the middleof a conversation. It’s difficult to access some thingsbecause of the way the command codes are . . . At timesthe forms we have to fill out are low in supply or no supply and we have to hunt for a form. Or there’s nopaper in the printers and we can’t find any!!” wroteColleen Mathis, an employee in the IRS office inNashville, Tennessee.Just as the vast majority of Americans work hard and paytheir fair share of taxes, the vast majority of IRS employeesare dedicated, hard-working, civil servants. To help themserve taxpayers, IRS employees need systems that balancevoluntary compliance, customer service and enforcement, and they need the tools to do the job properly.Experience from private sector companies demonstratesthat real improvement in customer service requires fullparticipation of the workforce. The CEO of Citibankrecently said that the single most important performancemeasure is employee well-being, which leads to customer satisfaction and in turn to business results. At Toyota, when the company asked employees to recommendideas for improvement, it implemented 95 percent of the38,000 proposals in a single year with spectacular results.At a Xerox company event in the early 1980s, the CEO

elp Employees

erve ustomers

kground: One-half of the IRS’s more than

 employees deal directly with customers. Although

ht percent of them work directly in taxpayer ser

ore than 40,000 other employees also deal with

rs on audits, collections or other activities.

 in reinventing service at the IRS depends crucially

ese front-line employees, their managers and the

mployees who support them. If, as industry has

 employee satisfaction and support are prerequi

 customer satisfaction, then the IRS has significant

ead. According to a 1995 employee survey by

 only 56 percent of the employees were satisfied

ir jobs. Most employees do not believe that they

arded for providing high-quality service to taxpay

s than half feel that they are encouraged to come

 new and better ways of doing things or that other

ees, the union or management are receptive to

 Only about one-third feel that the IRS encourages

ng without fear of punishment. Just a quarter believe

nagement follows up on employee suggestions for

s, services and operational improvements.

the front-line IRS employees on the Task Force

nted hundreds more from all over the country

re interviewed by the Task Force or wrote in their

s and suggestions for change to the Task Force.
85

bemoaned management’s belated discovery that

pany’s profits had plummeted because it was

hoddy merchandise. One of the manufacturing

es spoke up, telling the CEO that line employees

wn all along that equipment was substandard,

ne in management had asked about it. Starting

exchange, front-line employees became full 

nts in a complete refocusing of the company.

 result was a corporate turnaround that involved

es and the union in quality control and won the

y the Baldrige Award for corporate excellence 

mployees The Tools They Need To 

ir Jobs

em: Too many IRS employees simply do not

ess to the information and tools they need to do

s. Employees are as frustrated as customers when

t get current information about changes in the

or don’t have a fax machine, tax forms or other

on they need to serve customers.

ns: 

ployees Electronic Access to Tax Law Informa

w technology can give IRS employees much easi

ster access to the huge amount of tax informa

echnical, procedural and account-related — that

d to provide outstanding customer service. The

d expand work on the Electronic Performance

System being developed by the Electronic Perfor

upport System Institute to give employees access

w information (HP09.1). Early work should focus on

and deploying the first generation of technology

ly directed at serving customers (HP09.3). The

oal is to expand electronic performance support

systems both within the customer service departmentsand across the entire organization (HP09.4). All efforts to

improve employees’ access to information should containmechanisms to protect the privacy of taxpayer information.

Support IRS Employees Who Deal With the Public: As it

carries out the Modernization Blueprint, the IRS shouldensure that all employees who deal with the public haveelectronic tools on their desk as their primary source ofinformation and technical support (HP13.4). To achieve this,

the IRS should determine the needs of customer servicerepresentatives and ensure that the Modernization Blueprint’s electronic tools support these employees in meeting customer service goals (HP09.2, HP09.5). The IRS should

also build additional applications directed at providingcustomer service so that all applications and systemsdesigns will be performance-based and fully integratedwith the IRS business systems (HP09.6, HP09.7). This also

means using the Modernization infrastructure to deliveremployee performance assistance methods and trainingcapabilities to the employee desktop whenever possible

(HP02.8).Provide Appropriate Support in an Electronic Environment:To employees who deliver customer service, even smallsteps make a big difference. Where possible, the IRSshould provide employees with access to fax machines sothat they can send forms and other information to customers (CI03.9). The IRS should also review the need to

improve employees’ immediate workstations to betterserve their customers (CI03.11). Also, as information technology changes how the organization does business, the

IRS should continue to ask employees for ideas on howautomation can improve operations (CI03.10).
87

nt Training For Better Customer Service

em: Today IRS employees are not adequately

o serve customers. According to a 1995 IRS

e survey, only 44 percent of the employees

hat they receive the training they need. An IRS

e that serves its customers needs the behavioral

nical skills to answer questions, resolve problems

t other customer needs.

ns: 

nd Train Employees in The Skills and Behaviors

ed: The IRS should close the gap between its

needs and the skills possessed by its employees,

on the Performance-Based Development System

at is currently under development. This System

ed the required general competencies, the gap

 present and those desired competencies, and

ncy training needs. The IRS should assess the

ts employees and match their skills to jobs (HP02.1,

should also provide training where there is a gap

 the skills demonstrated by employees and those

by the IRS (HP02.4, and HP02.5).

s: To serve as an incentive, the IRS should set a

chieving core customer service skills for IRS

es that are higher than the national average for

(HP02.6). To sustain its focus on learning and skill

ment, the IRS should also begin annual reviews

etween employee skills and organizational

ents (HP02.7).

rging Technologies to Support Learning:

ality training is an important factor in creating

 customer service. Traditional, classroom-bound

methods are insufficient. The IRS should use interactivevideo training during the initial rollout of the proposedchanged mission, and follow up by continuing regular programs focusing on customer service and organizationalgoals relating to customer satisfaction (HP08.2). Video training

should become the major training delivery system for allemployee and other large-group training sessions (HP08.1).

•Get The Right People In The Right Jobs

Problem: The IRS needs to do a better job of selecting, training, evaluating, rewarding and supporting thoseemployees who directly serve customers. The employeeselection process has too many unproductive steps andexcessive reviews and too little focus on identifying candidates with the necessary job skills. The process leavesmanagers with little flexibility or authority and results inthe hiring of potentially unqualified employees.The Task Force believes that to really make a differencein how the IRS serves customers, the IRS must fundamentally change how it selects, trains, evaluates, rewards andsupports its employees (HP01.1). This begins with defining

the skills that are required to serve customers and thenmaking them part of the process for recruiting, selectingand promoting employees. The IRS has already identifiedspecific behavioral skills, such as customer sensitivity andlistening, that are needed for customer service positions,and has made progress defining technical skills, such asknowledge of tax law, needed for other positions.Actions: 

Change How Employees Are Selected: The IRS should

use pre-employment screening and testing of skills in hiring, starting with customer service personnel (HP01.6, HP01.9,
89

01.11, HP01.12). It should define measurable techni

behavioral skills required for all positions (HP01.2)

y them to the selection of executive, managerial

aining unit positions (HP01.7, HP01.8). It should also

nternet to let candidates know what skills IRS is

HP02.9).

Diverse Pool of Qualified Candidates: To shorten

ess of hiring internal candidates and to identifyct qualified employees, the IRS should offer a

nistered pre-qualification test to interested indi

HP01.3), create a pre-qualified pool of internal can

ossessing these skills, and fill vacancies from this

1.4, HP01.5).

A Family-Friendly Workplace

em: Employees and the work environment in

ization often have an impact on the way cus

re treated. One element of this work environ

luded in the Task Force review was the IRS’s

ntation of President Clinton’s June 1996 Presi

memorandum to all Executive Branch Heads and

ral Employees Family-Friendly Leave Act. Across

al government, as well as in the private sector,

are trying to balance work and family responsi

he IRS has made positive strides in implement

mily-friendly work environment, but there is not

ganization-wide understanding of these initia

a result, they have not been implemented evenly

e IRS.

ns: The Task Force calls for building on the

cesses and expanding current programs to foster

friendly workplace. The IRS should, where

ate, allow more employees to use flexible hours

(HP17.2), and should solicit more employee feedback about

current family-friendly programs (HP17.4). To the maximum

extent possible, the IRS should make child care moreaffordable for IRS employees (HP17.1) and expand flexiplace or telecommuting arrangements (HP17.3).

•Create An Ideas Advocate

Problem: Front-line employee knowledge aboutcustomer needs and ways to satisfy those needs is thebackbone of successful customer service organizations.Currently, there is no effective avenue for front-lineemployees to submit their ideas directly to decision-makers. Nor is there a central place for coordination andcommunication of the various efforts and new ideas thatare being pursued on an ad hoc basis within the organization. Action: The IRS should, within current resources,create an Ideas Advocate who will communicate directlywith the Commissioner regarding employee suggestionsfor improvement (HP12.1). The Ideas Advocate should:

• Encourage and collect ideas from employees; ideas 

should be able to go directly from any employeethrough the Ideas Advocate, to the Commissioner;

• Provide feedback to employees about individual 

suggestions that are implemented; and

• Communicate with IRS employees and others to 

promote customer service. 
91

e Customer Service Message Out

em: In an organization as large as the IRS, it

ch too long for front-line employees to learn

w procedures, changing operations and goals.

ns:

ht Away: Before the end of the 1998 filing season,

hould have an intensive, organization-wide spe

ing program to introduce employees to the new

 to customer service (HP15.1).

r support the new emphasis on customer 

he IRS should:

op an annual IRS-wide customer service 

ation for all employees (HP15.2);

 a customer service brochure to highlight 

ommunicate the customer service expectations

 employees (HP15.3);

lize oversight and responsibility for major 

munication initiatives (CM05.1); and

he course entitled “Leading Empowered 

groups” to all managers and employees 

 HP11.6).

y Means to Get the Message Out: The IRS

se the new tools of electronic communication,

g the Voice Messaging System, IRS Intranet, bul

rds, interactive video teleconferencing, as well

communications, to deliver quarterly reports on

rmance to all employees (HP13.2). It should also

ntranet to reinforce a consistent customer service

(HP15.4), and use Intranet and other technology to

the distribution of information that employees

keep up with changes that affect customers, such

es in tax laws and procedures (CM05.2).

IV. Conclusion

On May 20, 1997, Vice President Gore and Treasury Secretary Rubin set forth a broad challenge to the IRS: todramatically improve the way it serves its customers —the American taxpayers. The Customer Service TaskForce spent five months interviewing customers, analyzing data, and evaluating best practices in an effort tomeet that challenge. The IRS has already begun to build a new relationshipwith its customers. On Saturday November 15, it heldthe first of monthly “Problem Solving Days,” where customers met face-to-face with IRS officials to solve theirtax problems. Approximately 6,300 taxpayers attendedthe first Problem Solving Day, and 75 percent of respondents to the day’s satisfaction survey gave the IRS thehighest rating for overall service.The IRS has also already stopped ranking district officesbased on revenue measures and has implemented aninterim procedure to ensure that the seizures of taxpayerproperty are made only when appropriate. These andother recent activities demonstrate the IRS’s commitmentto rebuild the trust of the American people. It may beimpossible to hope that the public will ever love the taxcollector, but in time they may agree that the IRS does adifficult job fairly, respectfully, and courteously. This report covers a wide variety of issues, ranging from
92

telephone service to notices to electronic filing. It alsoaddresses the needs of a variety of customers, includingindividuals and small businesses. The changes it recommends will not occur overnight, for many of them requirenew computer systems, legislative changes, or a substantial transformation in the way the organization thinks andoperates. The speed with which the recommendationscan be implemented also depends significantly upon theavailability of resources and the support of both IRS management and front-line IRS employees. Regardless of thepace of implementation, however, the recommendationsrepresent a new way for the IRS to do business. The Customer Service Task Force report helps pave the way forcreating an IRS that the American public deserves.
APPENDIX A.1

AppendixListing OfActionsThis appendix provides a summary of the actions recommended in the preceeding report. The actions are listed in theorder of the topic heading under which they appear in the text.In addition to a tracking number, each action has a two-lettercode, which refers to the team on the Customer Service TaskForce that developed the recommendation (see list ofabbreviations below).

Team 

Abbreviation Team Title

CM Communications

CI Customer Interaction

CF Customer Focus

FP Filing and Payment

HP Human Potential

MS Measures

NC Notices and Correspondence

SB Small Business
APPENDIX A.3

Review all relevant information to determine if the dollar tolerance level atwhich notices are issued can be increased.Coordinate with Internal Audit , Compliance Research, and Customer Service to determine if IRS has collected any data to support or negate theproposal to increase the dollar level at which notices are issued. In 1998 step up its efforts to inform the nearly two million older and lowerincome taxpayers who are currently filing federal tax returns aware that theydon’t need to do so, saving the taxpayers and the IRS time and money.

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

NC02.9

NC02.10

rection For Service 

Forms, Notices and Corre

ce

nd Courteous Language

ain language the most frequently used notices, like those

athematical errors. These notices will be released only

r clarity and acceptance by taxpayers who do not have

w expertise.

al Performance Review’s Plain Language Team to rewrite

enders” by the end of 1997.

nd carry out all appropriate recommendations contained

of correspondence — for example requiring that all 

rated notices and letters contain the signature and

f the employee who will be working on the account.

of incoming customer correspondence.

egories could be better handled by making a telephone

ng a letter, and make recommended changes.

at and content of written responses, using appropriate

er software. 

portant forms and publications, focusing on clarity and

basic 1040 instruction package and test it for clarity on

ave tax law or accounting backgrounds.

mmunications it receives from the taxpayers about

gize when it makes a mistake.

sary Notices And Contact With The IRS

eliminate additional low value notices. This will elim

million pieces of mail annually, almost one-third of the

es the IRS has been sending to taxpayers.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

Study doing away with the requirement to file Form 4868, Application ofAutomatic Extension of Time to File U.S. Individual Income Tax Return, exceptwhen a payment is due.

• Tailor Communication To Customers

Tailor publications and products more closely to the needs of customers.During 1999, create easy-to-read brochures to provide important information on tax benefits and obligations when and where taxpayers need it, suchas at banks or realty companies during the process of purchasing a home.Improve and expand the availability of tax products and information in Spanish.Expand availability of tax products and information in languages other thanEnglish and Spanish, as appropriate.Ensure prompt distribution about new tax laws and other issues to employees.

• Reinvent How Notices Are Managed

Map the pattern of when and how notices are issued.Merge notice issuance pattern data with telephone performance data.Identify the impact of notice issuance patterns on telephone performance.Integrate changes to notice issuance processes into overall network management, call routing, forecasting and scheduling system.Adjust the notice issuance pattern from peak to non-peak periods.

FP01.1

FP02.1

CM04.1

CM04.2

CM03.1

CM03.2

CM01.3

NC02.1

NC02.2

NC02.3

NC02.4

NC02.6
CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

 SERVICE TASK FORCE

ng Of Actions

Description of Action

ces direct customers to telephone numbers where the

ved on-line.

ance pattern throughout each tax year.

me position of a “notices gatekeeper,” who will have the

tability to manage the entire notice process.

of the gatekeeper should include adherence to IRS

 use, generation, and mailing of corporate notices.

nsibility with the automated call routing capability.

esponsible for providing input into the standard-setting

gatekeeper to be responsible for alerting all customer

-in managers and customer advocates about any new,

notices.

 “early warning system,” so that the IRS can notify 

hers promptly when problem notices are generated 

priate software solution to create rewritten notices, and

appropriate account data. 

delivered mail, review current procedures for handling

cisely how much this process costs the IRS.

ues involved in using third-party change of address

ecessary, propose legislation to allow the use of this

 taxpayer accounts.

or getting change of address information from taxpay

e or from a third-party source such as the U.S. Postal

 Postal Service’s existing change of address mechanisms

l is forwarded to the right addresses.

em for electronically updating addresses in its computer

nstall and maintain the system.

II.b. Provide Better Telephone Service

• Provide Telephone Services 24 Hours A Day, Seven Days A Week

By January 1, 1998, expand telephone service to 6 days a week, 16 hoursa day. By January 1, 1999, expand telephone services to 7 days a week, 24hours a day.Use multiple strategies to reduce demand on the telephone lines such aseducating customers on when to expect refunds.

• Support Service With Modern Technology

Over the long term the IRS Modernization Blueprint will improve assistanceto customers by making accurate, electronically accessible and up-to-theminute information available to authorized employees.In 1999, take steps to make TeleTax refund information system more reliableto help more taxpayers check on the status of their refunds over the phone. Complete a study of why most people hang up when they use the automatedmenu and recommend needed modifications to current plans.

• Customize More Services To Meet Taxpayer Needs

In 1998, begin using new call routing technology to provide information thatis geared to specific customer needs — such as the tax implications of thesale of a house, retirement or job change.IRS notices should advise taxpayers the best time of day to call to discuss theirparticular type of question. The IRS should use its data systems to let theemployees answering the telephone know when to expect these kinds of callsso that they are prepared to help.Continue existing tax preparer telephone services. Provide a nationwide telephone service for tax preparers.Conduct a study to determine if having only one toll-free telephone numberis sufficient to meet customers needs.Continue to provide specialized assistance to large corporations in theservice centers.To further improve the quality of phone service, the IRS should allow employees with multilingual skills to assist customers in Spanish andother languages.

CI01.2

CI01.4

CI01.7

CI01.8

CI02.1

CI01.1

CI01.3

CI01.6

CI03.12

CI03.13

HP14.1

APPENDIX A.5
APPENDIX A.7

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Description of Action Action # Description of Action

 SERVICE TASK FORCE

ng Of Actions

Better Face-To-Face Service

rvices

open district offices on Saturdays during the busiest

g season.

e information system so that people can find out when

get face-to-face help.

k-in office, the IRS should create a plan for effective

customers. 

k-in services must close, the district should conduct a

gn to inform the public of the closure and where to seek

f extending audit appointments to include evenings and

nvenience of the customer.

Available

of the Internet to meet taxpayer needs, supplementing

blications with updated tax information.

ROMs to ensure that forms and publications are 

in offices. Make master versions of basic 1040 forms 

ble in copy stores and other locations where they can

ore available for those customers that do not use Inter

e location of forms to taxpayers.

pen additional temporary community-based locations

to make publications and forms available in banks,

alls, and other locations.

ocal tax agencies to establish “tax stores” — locations

ange of other tax services can be provided.

SB01.1

SB01.2

SB02.2

SB03.3

SB05.1

SB03.1

SB03.2

SB03.4

SB04.2

SB04.3

II.d. Help Small Business

• Help Start-Up Businesses

Assist new employers who have just applied for a Federal Employer Identification Number (FEIN) with information on relevant tax information wherepossible.Beginning in 1998 team up with other federal agencies, financial institutions,tax preparers, state and local authorities and others to provide tax information,training and consultative services to small start-up businesses. These servicesare designed to make record keeping, filing and payment requirements assimple and easy as possible.Create and make available to new businesses a start-up kit with multi-agencytax information. Develop and publish clear, simple brochures giving tax tips on newobligations as businesses change — for example, when hiring employees,expanding the business, converting from a sole proprietorship to a partnership, incorporating, or shutting down.Send a letter to business customers who have made first-time deposit errorsto tell them if the penalty has been waived and to tell them how to avoid mistakes in making their next deposit.

• Communicate More Clearly With Less Paper

Develop a permanent method to seek feedback from small businessesabout which forms, publications and specific line items are the mostproblematic.Test new forms and publications for clarity with small business owners and employees.Continue the development of EZ forms for incorporated businesses and otherfiling entities.In 1998 expand the successful TeleFile program to let many small businessesto use their telephones to file Form 941 and report employment taxes.Provide e-mail for small businesses to resolve tax account problems, oncethe IRS develops a way to protect the privacy of taxpayer information overe-mail.
APPENDIX A.9

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

st solution to let small businesses use credit cards as a

ax balances due.

e small businesses to use the Electronic Federal Tax

TPS), conduct focus groups to get feedback on the system

ustomers and market the electronic system in ways that

n benefit small businesses.

manner small business owners understand.

can be eliminated or sent less frequently.

mall business customers promptly if problem notices are

d.

mat and content of written responses to reduce

tices that are sent to small business customers.

eable, Convenient Help

ociations to provide timely, updated information specific

 a variety of industries through association newsletters,

tes, and other communication systems.

on, provide small businesses with 24 hour a day phone

heir needs.

ne calls from small businesses to specific individuals who

 authority to answer business tax questions and resolve

s.

nd proposed uses of IRS interactive voice response units

business needs are met in a cost-effective manner.

ephone calls instead of written notices or letters.

s of communicating with the small businesses.

tions with those small business customers who do not

rimary language by carrying out a multilingual strategy

 face-to-face, and telephone communication.

oll-free Spanish language telephone service for small 

 SERVICE TASK FORCE

ng Of Actions

Description of Action

Create forms, publications, notices and brochures in Spanish.

• Promote One-Stop Service

Working in partnership with other small business stakeholders, make use ofelectronic tools, creating a Small Business Corner on the IRS Home Page, orprovide one-stop information, education, and registration services to the smallbusiness community.Develop a strategy to open more one-stop business assistance centers inpartnership with federal, state, and local agencies.To give small businesses a single point reporting of tax and wage data to meetthe requirements of the Internal Revenue Service, Social Security Administration, the Department of Labor, and state agencies, continue to work tosupport the Simplified Tax and Wage Reporting System program.Promote further use of “joint installment agreements” for businesses that havefederal and state tax liabilities.

• Help Businesses With Problems

Analyze the costs and benefits of handling of all Federal Tax Depositpenalties in one centralized location.Test the use of specially trained employees to make educational telephonecalls to new employers, and specifically to new employers when the IRS firstdiscovers a mistake in handling their Federal Tax Deposits.Work with payroll and accountant groups to help educate individuals whomake deposits for small businesses.Develop training materials and courses to educate IRS employees aboutdeposit requirements, penalties and consistent use of reasonable causeprovisions for waiving penalties.Expand the approach of the Penalty Help Line developed in Kansas City ifit proves to be an effective way to provide assistance to small businesses.Test the use of outgoing telephone calls in lieu of written notices in certainpotential penalty situations.

SB09.3

SB02.1

SB02.3

SB04.1

SB04.4

SB04.2

SB05.2

SB05.4

SB05.5

SB05.6

SB05.7
APPENDIX A.11

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

mall businesses to help them comply, stay in business,

roblems, expanding on successful pilot programs in Cal

sewhere.

mprovements regarding penalty administration for 

luding considering raising the threshold for forgiving

ral testimony.

 Problem Solving System 

ks

Problems In One Contact

every office that puts any run-around burden on the IRS,

the customer.

fficient technical staffing at the telephone numbers given

ance on these “underreporter” notices, and find ways

iers to resolving these cases by telephone.

es could best be resolved in writing the IRS should

xpayers on what information and documents they need

lop and carry out a cost effective plan to expand the

nce centers working on underreporter cases, again —

ing more telephone calls instead of written notices to

IRS should create more flexible job descriptions to better

d demand.

 and develop plans to refine and improve its toll-free

o increase, or consistently define, what an IRS employee

telephone. Do not place the 1-800-829-8815 number

t be resolved by telephone.

agency-wide guidance that spells out what kinds of

 able to resolve over the telephone.

e guidelines to identify procedural changes or training

Ensure an adequate supply of forms and materials are available to allowemployees to do their jobs.Ensure employees are properly and promptly informed on new information.Ensure employees have access, when appropriate, to the multiple databasesand systems needed to resolve customer issues in one contact.Load all Non-Master File (NMF) accounts in one place and load them intoa secure on-line data system to improve their accessibility.Put currently uncollectible accounts in the automated Non-Master File,where appropriate.Ensure that the special units in the service centers that service these accountsare properly staffed.To reach a long-term solution, the Modernization Blueprint calls for theconsolidation of all accounts into a new unified system.Emphasize to all employees the need to honor all valid Powers of Attorney,and to process them promptly.Improve training on Powers of Attorney.Establish telephone assistance service centers for authorizations.Expedite input from locations that do not process authorizations by faxingthem to sites that process them.Draft regulations for acceptance of oral tax information authorizations.Give all locations the ability to input authorizations and hold the personreceiving the authorization responsible for assuring input.Accept oral tax information authorizations.Establish a centralized computer database to speed authorizations.Accept electronic authorizations and record them immediately while meeting privacy and security requirements.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

CI03.6

CI03.7

CI03.8

FP07.1

FP07.2

FP07.3

FP07.4

FP03.1

FP03.2

FP03.3

FP03.4

FP03.5

FP03.6

FP03.8

FP03.9

FP03.10
APPENDIX A.13

Extend TeleFile for businesses to allow small companies to meet federal taxdeposit reporting requirements over the phone.In 1998 increase the number of forms that can be filed electronically and educate customers about the benefits of electronic filing — fewer hassles, fewercontacts with the IRS and faster refunds.Market TeleFile aggressively to individual taxpayers.Conduct extensive market research to find out how electronic filing can bettermeet customer needs.In 1999, the IRS should work to enable taxpayers to file paperless by eliminating the need for mailing in W-2s and other forms and for paper signatures.Use information from private industry and tax practitioners as a basis for new services.Allow taxpayers to resolve tax questions by e-mail without jeopardizingtaxpayer privacy.Offer tax practitioners the option of filing an electronic Power of Attorney fortheir clients.Determine the feasibility of issuing notices electronically — test andimplement.Re-examine the work on filing and notices previously completed to determinecurrent usability.

• Introduce New Payment Options

For the first time, beginning in 1999 taxpayers who file their returns electronically will be able to pay their taxes with a direct withdrawal from their bank accounts.Offer credit card payment for balances due. Seek credit industry partners topilot-test credit cards for taxpayers who file electronically in 1999.

eople To Get Problems Solved

mber 15, 1997, institute monthly “IRS Problem Solving

 where employees will meet with taxpayers to hear and

hat will allow District Directors to approve and issue

ds to customers in one business day.

a On Complaints

ely, using the Taxpayer Advocate’s Problem Resolution

PROMIS), the IRS should track complaints.

ystematically raises the priority of cases which have not

sure that the appropriate management level is involved.

t is unresolved after a reasonable period of time, reas

ext higher management level.

nsure that individual employees and managers are held

air and speedy resolution of problems.

ate should develop a process to identify solutions to

entified by taxpayers. These solutions should be brought

e Commissioner when necessary.

For A Paperless Future

gy To Improve Customer Service

on Blueprint will improve assistance to customers by

ctronically accessible and up-to-the-minute information

 returns and accounts while protecting taxpayer privacy.

nic Filing Options

vate industry and tax practitioners to increase the use of

uld increase by 3 million, or about 10%, the number

 eligible to use TeleFile — the telephone filing system.

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

 SERVICE TASK FORCE

ng Of Actions

Description of Action

FP09.3

FP09.4

FP09.5

FP09.6

FP09.7

FP09.9

FP09.10

FP09.11

NC02.11

NC02.12

FP09.8

FP09.12
APPENDIX A.15

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

Create a long-term program to make the IRS culture more customer-friendly.Engage the entire IRS workforce at all levels; challenge long-held values and beliefs about how the organization works and carries out its mission; and hold the IRS and its employees accountable for providing excellentcustomer service.Use four fundamental strategies: (1) establish and write out a clear missionstatement to guide the bureau; (2) create executive and management buyin; (3) align the organization’s policies, procedures, systems, and structuresto support employees as they work toward the accomplishment of the newpurpose; and (4) gain the commitment of all members of the workforce.Manage implementation of the cultural change through methods identifiedin the plan.Continue benchmarking with industry and other government agencies andestablish a means to institutionalize best practices within the IRS.Communicate early successes in program and policy changes throughout the organization.

• Seek Changes In The Tax Code

Identify provisions of the Internal Revenue Code requiring improvement orsimplification, consistent with other important tax policy goals — includingconsiderations of fairness, equity, economic efficiency, progressiveness andrevenue collection.Maintain ongoing communication with the Treasury Department to identifyexisting Code provisions that are sources of significant compliance oradministrative burdens for taxpayers or the IRS and develop proposals forreducing these burdens.Work with private sector groups, such as bar associations, professional taxassociations and academic groups, to identify and develop proposals toforward to the Treasury Department to improve and simplify the Code.

• Develop A New Mission Statement

Develop a simpler and more focused mission statement that commits to servetaxpayers as customers.Make checks payable to the United States Treasury instead of the Internal Revenue Service.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

op Service On A World Class Web Site On The 

ntinue to improve and promote the use of the Internet

rvices and products.

omer Service Revolution

Taxpayers As Customers

e managers to approve employees’suggestions, but a

referred to the next level of management and to the 

who have been trained to answer a customer’s inquiry,

estion whether assigned to that specific issue or not.

uld review and remove barriers, including organizational

tacles, that prevent effective job performance.

 set of leadership competencies for all levels of manage

m the Commissioner on down should spend time each

mers directly.

That Focuses On Customers

will help the IRS understand the particular needs of cus

nd their key life events. 

of the IRS organization should include an emphasis on

r service.

rement and performance system that regularly obtains

r input.

HP10.1

HP10.2

HP10.3

HP13.1

CM06.1

FP05.1

FP05.2

FP05.3

CF01

FP08.1
APPENDIX A.17

Consider raising the current administrative threshold giving IRS employeesexpanded authority to eliminate or reduce penalties on the spot, during firstcontacts with taxpayers and based on oral testimony.

III.c. Measure What You Want To Get

• Create A Balanced Scorecard

Effective immediately, the IRS will ban measures such as using enforcementactivities to rank districts and assigning dollar goals for districts and servicecenters.Work with the NTEU to design and test a balanced scorecard to evaluate theIRS and its employees in 1998. The scorecard will rate performance on: (1)customer service; (2) employee satisfaction; and (3) business results.Link balanced scorecard on direct customer feedback, including an annualindependent survey of customers.Link the balanced scorecard on input from employees in an annual employeesurvey.

• Measure Performance On The Right Things

Put in place standards which clearly describe expectations for businessresults, customer satisfaction and employee satisfaction.Revise critical evaluation elements and the reward structure for employees,to reflect a balanced measurement system. Start with executives and managers.Establish specific customer service expectations for individuals in key, highlevel, high-visibility positions.Establish specific standards for customer service in every IRS manager’sperformance plan.Rewrite critical job elements for all customer service representatives.Rewrite the critical job elements, for all occupations, especially those dealingdirectly with the public.Move from individual rewards for performance to a system that rewards themembers of the organization for successful team efforts.

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

 Fair Treatment For Taxpayers

t It Right

 existing research and analysis programs in district

odels at the heart of the compliance research database.

xpand prevention strategies to other districts such as the

e North Florida District Office of Research and Analysis.

the development of research database and models.

lectronic Transcript Delivery System to help people get

from the IRS when they need it.

plan to improve compliance.

districts to share effective compliance improvement

y.

ernal measurement system, the Alternative Treatment

to give districts credit for results from these new

s.

ic Compliance Planning Model (SCPM) to allocate

hich have successfully improved compliance.

onal workload “upstream” in the compliance process

o resolve customer account problems sooner.

election criteria. 

ad selection criteria in its modernization program.

istent Treatment

ated database to record, analyze and use national 

ote fair treatment in appeals.

uld undertake a comprehensive review of the fairness

all penalties, report to Congress and make recommen

 changes.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

FP04.3

MS01

MS02

MS02.1

MS02.2

MS03.1

MS02.3

HP05.1

HP05.2

HP06.1

HP06.2

HP07.1
APPENDIX A.19

Incorporate desktop performance support tools into the ModernizationBlueprint.Build additional applications targeted to customer needs.Ensure that all applications and systems designs at this stage are performancecentered and integrated with the business system.As it carries out the Modernization Blueprint, ensure that all employees whodeal with the public have electronic tools on their desks as their primarysource of information and technical support.Use the planned “Modernization” infrastructure to deliver employeeperformance assistance methods and training capabilities to each employee’sdesktop, whenever possible.Provide employees with access to fax machines, where possible, so that theycan send forms and other information to customers.Continue to ask employees for ideas on how automation could improveoperations.Review the need to improve employees‘ immediate workstations to betterservice their customers.

• Reinvent Training For Better Customer Service

Create a skills bank that identifies the skills of its employees.Close the gap between IRS’s business needs and skills possessed byemployees.Change the internal listing of required employee skills to place greater emphasis on skills needed for customer service. Assess the skills of IRS employees and match their skills to jobs.Assess the skills of its employees and train those with the most critical needs.Train additional employees with critical skills needs.Set a goal of achieving core customer service skills that are higher than the national average for business. 

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

tem of measures that goes beyond the agency’s current

ual productivity.

awards should be focused on excellence in competencies

.

-based pass/fail appraisal system.

evaluation process with one that promotes on-going

and training geared to individual needs.

appraisals from awards, although both should remain

ce.

pursuing pay system changes in the future.

utives at all levels must support efforts to reward and

contributions toward better customer service.

rds as: peer customer service award; extra mile award;

outstanding customer service manager; outstanding cus

yee; single biggest customer service contribution; and,

cutive for customer service excellence.

ployees Serve Customers

e Tools They Need To Do Their Jobs

lectronic Performance Support System being developed

rmance Support System Institute to give employees access

n.

of customer service representatives and incorporate into

ueprint.

e first generation of performance support technology

at serving customers.

rformance support systems within the customer service

oss the entire IRS organization.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

HP09.5

HP09.6

HP09.7

HP13.4

HP02.8

CI03.9

CI03.10

CI03.11

HP02.1

HP02.2

HP02.3

HP02.4

HP02.5

HP02.6
APPENDIX A.21

Develop competencies for all other occupations where the IRS anticipateshiring or selecting.Use Internet technology to reach out to future employees by sharing IRScompetency needs.

• Foster A Family-Friendly Workplace

To the maximum extent possible, make child care more affordable for IRSemployees.Allow more employees to use flexible hours.To the maximum extent possible, expand flexiplace or telecommutingarrangements within budgetary and regulatory constraints.Solicit more employee feedback about current family-friendly programs.

• Create An Ideas Advocate

The IRS should, within current resources, create an Ideas Advocate who willcommunicate directly with the Commissioner regarding “Ideas Advocate”issues. 

• Get The Customer Service Message Out

Roll out Corporate Education’s Leadership Department course entitled“Leading Empowered Workgroups” to all managers to facilitate the movement of decision-making to the front line.Roll out the “Leading Empowered Workgroups” course to all employees.Use all available forms of communication including the Voice Messaging System, IRS Intranet, bulletin boards, interactive video teleconferencing, andpaper products to communicate quarterly reports on IRS performance to allemployees.Before the end of the 1998 filing season, have an intensive organization-widespecial training program. This program will introduce to employees the newapproach to customer service.Develop an annual IRS-wide customer service orientation for all IRSemployees.

CUSTOMER SERVICE TASK FORCE

Listing Of Actions

Action # Description of Action

s of gaps between employee skills and organizational

eo training the major training delivery system for all

 large-employee-group training subjects.

 training extensively during the initial rollout of the pro

on. Follow up by continuing regular programs focusing

 and organizational goals relating to customer satisfac

e In The Right Jobs

ange how the IRS selects, trains, evaluates, rewards and

es so they can better serve customers.

echnical and behavioral skills for all IRS positions.

ion test for interested employees.

 of qualified candidates scored against needed skills.

acancies from a pool of pre-qualified internal applicants

ur.

cal and behavioral skills for all Customer Service Rep

.

technical and behavioral skills for managerial, non

executive selections.

chnical and behavioral skills for all other bargaining unit

ent screening assessment tool, based on technical and

all external applicants.

views to screen external applicants for positions in IRS.

t screening and testing of skills in hiring, starting with

sonnel.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

HP01.12

HP02.9

HP17.1

HP17.2

HP17.3

HP17.4

HP12.1

HP11.5

HP11.6

HP13.2

HP15.1

HP15.2
APPENDIX A.23

ervice brochure to highlight and communicate the

ectations of its employees.

o reinforce a consistent customer service message.

nd implementation authority for major communicators

tribution of information to IRS employees.

 SERVICE TASK FORCE

ng Of Actions

Description of Action

Contacting The IRSProblem Resolution Day: 1-800-829-1040If you have questions regarding Problem ResolutionDay please call the number above for assistance.TeleTax: 1-800-829-4477Call for recorded tax information on over 140 taxtopics and for automated refund information.Forms and Publications: 1-800-829-3676Order a free copy of IRS forms and publications.Hearing-Impaired: 1-800-829-4059Get tax assistance through TTY/TDD equipment.Tax Assistance: 1-800-829-1040If you can’t answer your own questions by reading thetax form instructions or the free tax publications, callthe IRS for assistance.Internet:Access the IRS home page to get federal tax forms withinstructions, publications, tax law changes, ”frequentlyasked questions,” and other tax information for individuals and businesses.World Wide Web — http://www.irs.ustreas.govFile Transfer Protocol — ftp.irs.ustreas.govTelnet — iris.irs.ustreas.govModem: (703) 321-8020Federal Tax Forms CD-ROM:Order CD with current year and prior year tax formswith instructions and tax publications from GovernmentPrinting Office’s Superintendent of Documents at (202) 512-1800 or through Internet at:http://www.access.gpo.gov/su_docs.IRS Tax Fax:From a fax machine, dial (703) 487-4160 and followvoice prompts to get IRS tax forms with instructionsand other tax information materials faxed back to you.
Department of the Treasury

Internal Revenue ServicePublication 2197 (3-98)Catalog Number 25006E

For sale by the U.S. Government Printing Office

Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328

ISBN 0-16-049475-3