2013 TAX FILING 

SEASON

IRS Needs to Do 

More to Address the 

Growing Imbalance 

between the Demand 

for Services and 

Resources 

Report to Congressional Committees

December 2013

GAO-14-133

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-133, a report to 

congressional committees 

December 2013

2013 TAX FILING SEASON

IRS Needs to Do More to Address the Growing 

Imbalance between the Demand for Services and 

Resources

Why GAO Did This Study

The tax filing season is when IRS 

processes most tax returns and 

provides services including telephone, 

correspondence, and website 

assistance for tens of millions of 

taxpayers. IRS budgeted more than 

$2 billion for these activities in 2013. 

The filing season is also when IRS 

begins collecting delinquent taxes by, 

for example, approving installment 

agreements and checking for nonfilers. GAO was asked to review the 

2013 tax filing season. This report (1) 

assesses IRS’s performance in 

processing tax returns and providing 

services to taxpayers; (2) describes the 

installment agreement process and 

assesses its efficiency; and (3) 

describes the process for detecting 

and notifying non-filers. To conduct the 

analyses, GAO obtained and 

compared IRS data from 2007 through 

2013, reviewed pertinent IRS 

documents, observed IRS operations, 

and interviewed IRS officials and 

experts in tax administration, including 

tax preparation firms.

What GAO Recommends

GAO recommends that IRS develop 

standardized account entries and 

eliminate unnecessary redundancy in 

the installment agreement process. 

IRS did not state whether it concurred 

with our recommendation. GAO 

believes the recommendation remains 

valid as discussed in this report. In 

addition, GAO continues to believe the 

prior recommendation that IRS develop 

a strategy that defines appropriate 

levels of telephone and 

correspondence services based on an 

assessment of demand and resources

among other things remains valid and 

should be addressed. 

What GAO Found

Despite efficiency gains from processing more tax returns electronically, adding 

website services, and shifting resources from enforcement, the Internal Revenue 

Service (IRS) was unable to keep up with demand for telephone and 

correspondence services. Access to IRS’s telephone assistors remained at 68 

percent from 2012. The percentage of overage paper correspondence (over 45 

days old) increased to 47 percent from 40 percent in 2012. In the face of similar 

trends, last year GAO reported that a dramatic revision in IRS’s taxpayer service 

strategy was needed and recommended IRS take steps to better balance 

demand for services with available resources. GAO acknowledged this may 

require IRS to consider difficult tradeoffs, such as limiting some services. In 

response, IRS has proposed eliminating or reducing some services for 2014 

such as answering basic tax law questions only during the filing season. 

However, IRS officials told GAO the proposed cuts may not be sufficient to stop 

the deterioration in services. Until IRS develops a strategy, it risks not 

communicating expectations about the level of services it can provide based on 

the resources available. IRS could use the strategy to facilitate a discussion with 

Congress and other stakeholders about the appropriate mix of service, level of 

performance, and resources.

IRS Return Processing, Telephone Service, and Correspondence, 2008 through 2013 Filing Seasons

2008 2009 2010 2011 2012 2013

Return processing (fiscal year)

Returns processed (in millions) 151 139 137 140 142 142

Percent e-filed 59 67 71 78 82 84

Telephone service (end of June, each year)

Percentage of callers seeking live 

assistance who receive it

57 68 76 72 68 68

Average wait time (in minutes) 8.6 8.4 9.5 11.7 17 15.5

Paper correspondence (end of fiscal year)

Percentage of overage correspondence n/a 25 27 35 40 47

Source: GAO analysis of IRS data. Legend: n/a = not applicable. 

IRS offers options for installment agreements (IAs) to taxpayers who cannot fully

pay their taxes when due. Taxpayers can enter into these agreements online, by 

phone, and by mail. In fiscal year 2012, IRS approved about 3.2 million new 

agreements and collected almost $10 billion. IRS devotes about 1,800 full-time 

equivalent staff to the program but it is not as efficient as it could be. GAO found 

opportunities to standardize account entries and reduce redundancy by 

eliminating dual entry of the same data on paper forms and into IRS’s computers. 

IRS officials agreed that opportunities did exist to streamline the process. More 

standardized and less redundant data entry could reduce resource needs.

IRS detects non-filers by matching third party information (i.e., Form W-2s) with 

tax returns. The first match is done in October, well after the mid-April tax filing 

deadline from the previous year, because of the time it takes to receive the third

party information and process it. IRS sends notices to non-filers in November and 

December. 

View GAO-14-133. For more information, 

contact James R. White at (202) 512-9110 or 

whitej@gao.gov.
Page i GAO-14-133 2013 Tax Filing Season

Letter 1

Background 3

IRS Achieved Processing Efficiency Gains, but Continues to Face 

Challenges in Providing Service to Taxpayers 6

IRS Recently Expanded the Installment Agreement Program, but 

Some Case Handling Practices Lack Standardization and are 

Unnecessarily Redundant 14

IRS’s Identification of and Notification to Potential Non-Filers 

Takes Months after Filing Deadlines 17

Conclusions 19

Recommendation for Executive Action 20

Agency Comments and Our Evaluation 20

Appendix I Installment Agreement Types and Characteristics 22

Appendix II Weekly Toll-Free Calls and Percentage of Callers Seeking and 

Receiving Live Assistance 23

Appendix III Use of IRS Website and Online Services 24

Appendix IV Services Offered at Walk-In and Volunteer Sites 26

Appendix V Installment Agreement Process 27

Appendix VI Comments from the Department of the Treasury 28

Appendix VII GAO Contact and Staff Acknowledgments 31

Contents
Page ii GAO-14-133 2013 Tax Filing Season

Tables

Table 1: Individual Income Tax Returns Processed from 2008 

through 2013 7

Table 2: IRS Call Volume, Telephone Service Goals and 

Performance, 2008 through 2013 Filing Seasons 9

Table 3: IRS Taxpayer Correspondence Performance, Fiscal 

Years 2009 through 2013 10

Table 4: Total Installment Agreement Inventory and Tax Liability, 

Fiscal Years 2009 through 2012 15

Table 5: Potential Individual Non-filer Cases Identified and 

Number and Percentage of Cases Selected for Review, 

Tax Years 2007 through 2010 18

Table 6: Types and Characteristics of Installment Agreements 22

Table 7: Website Use from the 2008 through 2013 Filing Seasons 24

Table 8: Services Performed at IRS Taxpayer Assistance Centers 

and Sites Staffed by Volunteers, 2010 through 2013 26

Figures

Figure 1: Weekly Toll-Free Calls and Percentage of Callers 

Seeking and Receiving Live Assistance for the Week 

Ending January 5 through June 29, 2013 23

Figure 2: Example of Streamlined Installment Agreement 

Application and Payment Process 27
Page iii GAO-14-133 2013 Tax Filing Season

Abbreviations

CADE 2 Customer Account Data Engine 2

CSR Customer Service Representative

e-file electronic filing

FTE Full-Time Equivalent

IMF Individual Master File

IA Installment Agreement

IRS Internal Revenue Service

LOS Level of Service

MeF Modernized e-File

TE Tax Examiner

TAC Taxpayer Assistance Center

TIGTA Treasury Inspector General for Tax Administration

UBA Unpaid Balance of Assessment

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-14-133 2013 Tax Filing Season

441 G St. N.W.

Washington, DC 20548

December 18, 2013

The Honorable Max Baucus

Chairman

The Honorable Orrin Hatch

Ranking Member

Committee on Finance

United States Senate

The Honorable Charles W. Boustany

Chairman

The Honorable John Lewis

Ranking Member

Subcommittee on Oversight

Committee on Ways and Means

House of Representatives

Each tax filing season is an enormous undertaking. In the 2013 filing 

season, the Internal Revenue Service (IRS) processed over 140 million 

individual income tax returns, issued more than 100 million refunds worth 

over $280 billion, and received over 90 million telephone calls. In fiscal 

year 2013, IRS budgeted more than $2 billion for processing such returns 

and providing taxpayer services. During the filing season, IRS also begins 

its efforts to verify that tax returns are in compliance with income reporting 

requirements. Two examples of compliance issues that typically surface 

during the filing season are (1) failure to pay a balance due on time, and 

(2) failure to file a return. Taxpayers who are unable to pay a balance due 

on time can make payments through an installment agreement (IA)—

which allows taxpayers to pay their tax debt in scheduled (usually 

monthly) payments. Since failure to file a return cannot be detected until 

after the tax filing deadline and IRS determines that the taxpayer may 

have a filing obligation, timely notification of taxpayers can be a 

challenge. IRS last estimated that non-filers accounted for $28 billion of 

the $385 billion net tax gap in tax year 2006.1

 1

The tax gap is the difference between taxes legally owed to the government and what 

taxpayers actually paid to the government.
Page 2 GAO-14-133 2013 Tax Filing Season

In this context, you asked us to review IRS’s 2013 tax filing season 

performance. Specifically, this report (1) assesses IRS’s performance in 

processing returns, delivering refunds, and providing telephone, online,

and face-to-face assistance compared to its 2013 goals and prior years’

performance; (2) describes IRS’s IA process and assesses the efficiency 

of the process; and (3) describes IRS’s process for detecting non-filers, 

including the time it takes to notify them.

To assess IRS’s filing season performance, we

• obtained and analyzed IRS documents and data, including 

performance and workload data, for return processing and taxpayer 

services, and used this information to compare IRS’s performance in 

2013 to prior years (2008 through 2012) and agency goals to identify 

trends and anomalies.

• visited IRS facilities in Austin, Texas, and the Joint Operations Center 

(which manages IRS’s telephone operations) in Atlanta, Georgia, to 

view return processing, telephone service, and other operations.

• interviewed IRS officials and tax administration experts to obtain 

contextual information about IRS’s performance, including the effect 

of late tax law changes, and efforts to improve taxpayer services.

To describe IRS’s IA process and assess its efficiency, we

• obtained and reviewed IRS documentation, such as the Internal 

Revenue Manual and the IA lifecycle and default processes, and 

analyzed IRS data to summarize key information about IAs from fiscal 

years 2009 to 2012.

• observed tax examiners working IA cases at IRS facilities in Atlanta, 

Georgia and Austin, Texas.

• interviewed IRS officials to obtain contextual information about the IA 

program.

To describe IRS’s processes for detecting non-filers including the time it 

takes to notify them, we

• obtained and analyzed IRS data from tax years 2007 through 2010 

and documentation on its non-filer program.

• observed tax examiners working non-filer cases at IRS facilities in 

Austin, Texas.
Page 3 GAO-14-133 2013 Tax Filing Season

• interviewed IRS officials to obtain contextual information about the 

non-filer program.

To identify limitations and assess data reliability, we reviewed IRS data 

and documentation, interviewed IRS officials about computer systems 

and data limitations (including a more detailed assessment of telephone 

performance data), and compared those results to our data reliability 

standards. We interviewed IRS collection and research staff, as well as 

Treasury Inspector General for Tax Administration (TIGTA) staff who 

worked on past reports relevant to our work to identify data sources and 

better interpret IRS’s data. We consider the data presented in this report 

to be sufficiently reliable for our purposes.

We conducted this performance audit from January 2013 through 

December 2013 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

• Processing: IRS processes millions of paper and electronically-filed 

(e-filed) tax returns and validates key pieces of information during the 

tax filing season.2 The overwhelming majority of returns are e-filed 

through IRS’s Modernized e-File (MeF) system.3

 2

Most taxpayers file their tax returns between January 1 and April 15, which is the 

deadline for filing individual income tax returns. However, millions of taxpayers receive 

extensions from IRS, which allows them to delay filing until as late as October 15.

Beginning last filing 

season, IRS and taxpayers benefitted from IRS’s switch from weekly 

to daily tax return processing on its Individual Master File (IMF) legacy 

system which allowed for faster refund processing for more taxpayers. 

IRS is continuing to transition from its antiquated IMF legacy system 

3

IRS cannot accept e-filed returns directly from taxpayers. Rather, IRS authorizes e-file 

providers to transmit returns to IRS electronically using the MeF system.

Background

IRS Processing and 

Taxpayer Services
Page 4 GAO-14-133 2013 Tax Filing Season

to a more modern return processing system known as the Customer 

Account Data Engine 2 (CADE 2).4

• Telephone: Taxpayers can call to speak directly with an IRS 

customer service representative (CSR) to obtain information about 

their accounts or ask tax law questions. Taxpayers can also listen to 

recorded tax information using automated telephone menus.

Automated services are provided on IRS’s 149 Tele-tax lines for tax 

law topics and 71 phone lines for account information.

CSRs are also responsible for responding to paper correspondence 

from taxpayers. IRS tries to respond to paper correspondence within 

45 days of receipt, and considers correspondence that is not 

addressed within that time to be overage. Minimizing the amount of 

overage correspondence is important because delayed responses 

may prompt taxpayers to write again or call IRS.

• Website: On IRS.gov, taxpayers can download forms, instructions, 

and publications and research tax law issues using interactive tools. 

Taxpayers can use interactive tools to check the status of their 

refunds, request transcripts (which are copies of a taxpayer’s account 

information), and apply for IAs.

• Face-to-Face Assistance: Taxpayers can obtain face-to-face 

assistance at IRS’s 390 Taxpayer Assistance Centers (TAC) or at 

more than 13,000 sites staffed by volunteer partners. At TACs, IRS 

staff provide answers to basic tax law questions, review and adjust 

taxpayer accounts, take payments, authenticate Individual Taxpayer 

Identification Number applicants and identity theft victims, and 

prepare returns for qualified taxpayers.5

 4

The Individual Master File (IMF) is IRS’s primary repository for taxpayer account 

information. IRS refers to daily processing by the legacy system and its new relational 

database that will eventually fully replace the IMF legacy system as CADE 2. It is 

designed to allow IRS to provide still quicker refunds and conduct more and improved 

compliance checks before refunds are issued. IRS plans to run CADE 2 and the IMF 

legacy system concurrently in 2014. 

At the sites staffed by 

volunteers, taxpayers can receive return preparation assistance as 

well as financial literacy information.

5

Taxpayers with annual incomes of $51,000 or less can have their returns prepared by 

IRS staff at TACs, or taxpayers can have returns prepared by volunteers at IRS partner 

sites. 
Page 5 GAO-14-133 2013 Tax Filing Season

Taxpayers can enter into IAs to pay their tax debts after filing their return 

with a balance due.6 IAs are an important tool for IRS to collect revenue.

IRS assesses and collects billions of dollars each year through IAs. IAs 

can be established, paid off, defaulted on, reinstated, or terminated at any 

time during the year. IRS provides four types of IAs—Guaranteed, 

Streamlined, Regular/Routine, and Partial Payment—with different 

eligibility and payment requirements. IAs allow taxpayers to pay off their 

tax liabilities gradually over time and can encompass multiple years. 

Failure to adhere to the terms of the IA can cause default, termination, 

and more expensive collection actions.7 The most common type of IA by 

far is the streamlined agreement, which provides taxpayers with flexibility 

in paying off liabilities. Appendix I provides additional information on the 

types and characteristics of IAs.

IRS defines a non-filer as a taxpayer who has a legal obligation to file a 

return, but fails to file a return by the filing deadline (either April or 

October depending on whether the taxpayer filed for an extension). IRS is 

authorized to issue a notice requesting a delinquent return and it can 

send up to four notices to taxpayers. 8

 6

Taxpayers also can apply for IAs after a notice of liability is received. Penalties, interest, 

and user fees are charged to taxpayers using IAs to pay their tax debts. In certain cases, 

IRS is required to enter into an IA, but generally IRS has the discretion to determine 

whether to enter into an IA. 

7

GAO, 2012 Tax Filing: IRS Faces Challenges Providing Service to Taxpayers and Could 

Collect Balances Due More Effectively, GAO-13-156 (Washington, D.C.: Dec. 18, 2012).

8 26 U.S.C. § 6001. 

Installment Agreements

Individual Non-filers
Page 6 GAO-14-133 2013 Tax Filing Season

Despite late tax law changes which delayed the start of filing season and

compressed the time that IRS had available to process tax returns, IRS 

officials and external stakeholders such as large tax preparation firms 

reported relatively smooth processing, with a few exceptions.9

Table 1 shows that IRS achieved an 84 percent e-file rate for individual 

returns, and processed 11 percent fewer paper returns compared to last 

year. Continued increases in e-filing are important because processing 

costs are lower for e-filed returns. According to IRS, in fiscal year 2012, it 

cost 23 cents to process an e-filed return, as opposed $3.36 for returns 

filed on paper. IRS relied solely on MeF this filing season, and attributed 

this success to expanded testing of the system which improved the MeF’s 

stability and facilitated return processing. External stakeholders confirmed 

IRS’s assertion about the reason for MeF’s success.

IRS usually 

begins processing tax returns in early to mid-January; this year, it started 

processing most returns January 30, 2013.

 9

We previously reported on the effect of the compressed time frames on IRS due to the 

American Taxpayer Relief Act of 2012 (Pub. L. No. 112-240), which made permanent 

many of the tax cuts enacted in 2001 and 2003 and extended other many provisions. See 

GAO, Internal Revenue Service: 2013 Tax Filing Season Performance to Date and Budget 

Data, GAO-13-541R (Washington, D.C.: Apr. 15, 2013). 

IRS Achieved 

Processing Efficiency 

Gains, but Continues 

to Face Challenges in 

Providing Service to 

Taxpayers

Electronic Filing Continued 

to Grow
Page 7 GAO-14-133 2013 Tax Filing Season

Table 1: Individual Income Tax Returns Processed from 2008 through 2013 

2008 2009 a 2010 2011 2012 2013

Percent 

change 

from 2012 

to 2013

Number of individual tax returns processed 

(in millions)

b

151 139 137 140 142 142 -0.1

Electronic 89 94 97 109 116 119 2

Paper 62 45 40 30 26 23 -11

Percentage e-filed 59 67 71 78 82 84 2

Number of refunds issued (in millions) 105 109 107 107 108 107 -0.8

Amount of refunds issued (dollars in billions) $248 $298 $312 $303 $295 $287 -3

Source: GAO analysis of IRS data.

Notes: Data on the number of returns processed are from January 1 through October 3, 2008; 

January 1 through October 2, 2009; January 1 through October 1, 2010; January 1 through

September 30, 2011; January 1 through September 28, 2012; and January 1 through September 27, 

2013. Data cover equivalent periods for each fiscal year.

a

The Economic Stimulus Act of 2008 mandated that IRS send stimulus payments to over 100 million 

households, many of which would not otherwise have needed to file a tax return.

b

Although operations were relatively smooth, IRS and others reported 

issues that delayed processing for tax returns filed with Form 8863 

(Education Credits), and with Form 5405 (First-time Homebuyer Credit).

While IRS was able to resolve processing delays for about 700,000 tax 

returns filed with the Form 8863, multiple class action suits have been 

filed against a large tax preparation firm regarding the issues involved in 

the processing delays.

The numbers in the table are rounded, but the percent change was calculated using exact values.

Therefore, in some cases, the percent change is slightly different than it would be if it were calculated 

using the rounded values in the table.

10 IRS also quickly resolved processing issues with 

about 88,000 returns filed with Form 5405 that were caused by a 

compliance filter that resulted in additional scrutiny.

 10The cases generally allege breach of contract, negligence, and violation of state 

consumer protection laws. IRS is not a named party to the suits.
Page 8 GAO-14-133 2013 Tax Filing Season

Table 2 shows that, in 2013, IRS received 93.5 million calls— a 5 percent 

decrease from 2012 but higher than 2009 through 2011. Compared to 

2012, IRS answered almost 9 percent fewer calls using automated 

services. Officials attributed some of the reduction in automated calls 

answered to fewer e-file personal identification number requests. 

Answering as many calls as possible through automation is important 

because IRS estimates that it costs 38 cents per call to provide an 

automated answer, but about $33 per call to use a live assistor.11

Table 2 also shows that callers experienced a shorter average wait time 

to speak to an IRS assistor this year compared to the same period last 

year, but the time was still much longer than 2008 through 2011. The 

percentage of callers seeking live help who received it stayed the same 

as 2012 at 68 percent.

In 2010, we found that that IRS sets its annual goal based on factors such 

as resource availability, the expected number and complexity of calls, and 

anticipated volume of taxpayer correspondence, but not on an analysis of 

what taxpayers would consider to be good service.12 At that time, we 

recommended that IRS determine a telephone standard based on the 

quality of service provided by comparable organizations, what matters 

most to the customer, and resources required to achieve this standard 

based on input from Congress and other stakeholders. IRS disagreed 

saying its current process of developing a planned level of telephone 

service takes into consideration many factors, including its budget and 

assumptions about call demand. We noted, however, that such a 

standard would allow IRS to communicate to Congress what it believes 

constitutes good service. Further, since 2010, the IRS Oversight Board 

has said than an acceptable level of service (LOS) should be about 80 

percent.13

 11For 2013, IRS reported the cost for an assistor answer call is based on calls answered 

from October 1, 2012 through June 30, 2013.

However, IRS has yet to set such a standard.

12GAO, 2010 Tax Filing Season: IRS’s Performance Improved in Some Key Areas, but 

Efficiency Gains Are Possible in Others, GAO-11-111 (Washington, D.C.: Dec. 16, 2010). 

13The IRS Oversight Board is an independent body charged to provide the IRS with longterm guidance and direction. 

Access to Telephone 

Service Remained the 

Same as Last Year, and 

Correspondence Service 

Continues to Deteriorate 

Due to the Imbalance 

between Demand and 

Resources
Page 9 GAO-14-133 2013 Tax Filing Season

Table 2: IRS Call Volume, Telephone Service Goals and Performance, 2008 through 2013 Filing Seasons

2008 2009 a 2010 2011 2012 2013

Percent 

change 

from 

2012 to 

2013

Total calls to IRS (in millions)

b

c 118.0 77.6 77.4 83.1 98.4 93.5 -5.0

Automated calls answered 43.0 25.3 31.6 36.7 50.1 45.8 -8.6

Assistor answered calls 27.0 25.7 24.1 22.6 19.4 20.4 5.2

Abandoned, busies, and disconnects 48.0 26.7 21.7 23.8 28.9 27.3 -5.6

Access measures 

Percentage of callers seeking live help 

who receive it (LOS)

Goal 82 77 71 d 71 61 70 14.8

Actual 57 68 76 72 68 68 0.2

Average wait time (in minutes) Goal 4.5 10.4 11.6 e 11.6 19.0 15 -20.4

Actual 8.6 8.4 9.5 11.7 17 15.5 -7.4

Accuracy measuresf

Tax law rate (in percent)g 90.3

+/- 0.9

92.5

+/- 0.8

92.4

+/- 0.8

92.9

+/- 0.6

92.5

+/- 0.7

95.6

+/- 0.7

Account accuracy rate (in percent) 93.5

+/- 0.4

95.1

+/- 0.4

95.6

+/- 0.4

96.0

+/- 0.3

95.4

+/- 0.3

95.8

+/- 0.4

Source: GAO analysis of IRS data.

Note: Unless otherwise noted, data are cumulative from January 1 of each year to June 30, while 

goals are for the entire fiscal year. We believe comparing performance during the filing season to 

fiscal year goals is appropriate as IRS’s filing season performance is an indicator of its performance 

for the entire year.

a

According to IRS officials, IRS received an unprecedented number of calls in 2008 primarily related 

to economic stimulus package payments.

b

The numbers in the table are rounded, but the percent change was calculated using exact values.

Therefore, in some cases, the percent change is slightly different than it would be if it were calculated 

using the rounded values in the table.

c

The numbers in the table are the total automated, assistor answered, abandoned, busy and 

disconnected calls, and do not reflect the total number of attempted calls to IRS.

d

IRS revised its original fiscal year goal of 77 percent down to 70 percent because of high call volume 

from taxpayers requesting e-filing authentication information and asking stimulus-related questions.

e

IRS determines its wait time goals based on anticipated call volume and resource availability. IRS 

significantly raised its wait time goal for 2009 compared to 2008 in light of anticipated increased call 

volume related to tax law changes.

f

IRS calculation based on representative samples of phone calls from January 1 through June 30.

g

There is considerable weekly variation around the annual averages for 

telephone access shown in Table 2. For example, prior to the filing 

deadline of April 15 weekly levels of service ranged from a low of 53 

percent to a high of 77 percent. After the filing deadline, weekly service 

The percentage of calls in which CSRs provided accurate answers for the call type and took the 

appropriate actions, with a 90 percent confidence interval.
Page 10 GAO-14-133 2013 Tax Filing Season

levels were lower. They ranged from a low of about 40 percent to a high 

of 69 percent. See Appendix II for additional information on weekly call 

volume and levels of service.

IRS officials stated that reduced funding levels stemming from multi-year 

and sequestration- related budget cuts resulted in fewer than planned 

CSR resources to handle telephone calls and paper correspondence. IRS 

devoted about 13,200 full-time equivalent (FTE) employees in 2013 to 

telephones and correspondence compared to almost 13,800 in 2012 (a 

decline of 4 percent). These FTE numbers for 2013 do not include about 

300 staff that IRS shifted from its collection activities to answer telephone 

calls. IRS estimated the costs and foregone revenue associated with this 

shift to be in excess of $202 million. Using IRS’s estimate, which we did 

not verify, the costs and foregone revenue per FTE shifted would be in 

excess of $674,000.

As shown in Table 3, the amount of correspondence received between 

2009 and 2013 increased from 19 to 21 million (a 10.5 percent increase) 

and the percentage of overage correspondence nearly doubled to 47 

percent in 2013 from 25 percent in 2009. As noted earlier, IRS generally 

considers paper correspondence that is not resolved within 45 days to be 

overage.

Table 3: IRS Taxpayer Correspondence Performance, Fiscal Years 2009 through 

2013

Fiscal Yeara

2009 2010 2011 2012 2013

Percent change 

from fiscal year 

2012 to 2013

Correspondence 

received (in millions)

b

19 20 20 21 21 0

Percentage of 

taxpayer overage 

correspondence 

25 27 35 40 47 18

Source: GAO analysis of IRS data.

Note: Aggregate data are from Accounts Management and Submission Processing, which jointly 

responds to IRS’s taxpayer correspondence.

a

Data cover equivalent periods for each fiscal year with slight variation in the exact dates depending 

on the year and data source.

b

Almost Half of All Taxpayer 

Correspondence is 

Overage, and IRS Has 

Plans to Conduct More 

Evaluations of Taxpayer 

Correspondence

The numbers in the table are actual numbers reported by IRS, and the percent change was 

calculated using those values.
Page 11 GAO-14-133 2013 Tax Filing Season

In December 2010, we concluded that providing timely responses to 

paper correspondence remains critical to taxpayer service because if 

IRS’s responses take too long taxpayers may write again or call IRS for 

additional assistance. We recommended that IRS establish a 

performance measure that includes providing timely correspondence 

service to taxpayers. IRS agreed to this recommendation, and is 

beginning to take steps to implement it.14

IRS has taken some steps to identify why taxpayers write in. Based on a 

recent small, judgmental sample of correspondence cases, IRS found 

that the top three most common reasons taxpayers write in are: balance 

due payoffs, penalty abatements, and miscellaneous account inquiries. In 

that same sample, IRS found that its own processes, such as the wording 

of notices or requirements for a paper signature, influenced taxpayers to 

write in. IRS officials told us they are currently analyzing a statistically 

valid sample of correspondence to identify additional factors that 

influence the level of correspondence.

Since we made that 

recommendation, the percentage of overage correspondence has 

continued to increase. IRS officials attribute the increase in the 

percentage of overage correspondence to budget constraints (less 

overtime for CSRs who provide both telephone assistance and work 

paper correspondence), and more complex taxpayer inquiries such as 

correspondence related to identity theft cases which can be more time 

consuming to address.

Use of IRS.gov continues to increase, with IRS receiving approximately 

374 million visits to its website through July 2013, an increase of nearly 

26 percent over the same period in 2012. IRS officials attribute this 

increase to the launch of the redesigned website, introduction of new 

online tools such as Where’s My Amended Return, and implementation of 

the Patient Protection and Affordable Care Act.15

 14

We previously 

recommended that IRS develop a long-term strategy to improve web 

GAO-11-111. 

15GAO, Patient Protection and Affordable Care Act: IRS Managing Implementation Risks, 

but Its Approach Could Be Refined, GAO-12-690 (Washington, D.C., June 13, 2012). IRS 

is one of several agencies accountable for implementing provisions under the Patient 

Protection and Affordable Care Act. Among other things, IRS is responsible for providing 

guidance to taxpayers, employers, insurers, and others to ensure compliance with new tax 

aspects of the law.

Website Use Has 

Increased, While Some 

Face-to-Face Services 

Continue to Decline
Page 12 GAO-14-133 2013 Tax Filing Season

services provided to taxpayers that includes studies of leading practices 

at a strategic level, measurable goals for taxpayer satisfaction, business 

cases for new online services that describe potential benefits and costs 

and prioritized projects, and links to investments in security.16

IRS received about 2.6 million visits to its TACs, a decline of 

approximately 5 percent from 2012. Additionally, the number of returns 

prepared continues to decline—in 2013, IRS prepared nearly 125,000 

returns at TACs, about a 16 percent decline from 2012. IRS attributes the 

decline to its efforts to manage demand, and increased taxpayer 

awareness of online tools and services. In contrast, the number of returns 

prepared at the roughly 13,000 volunteer sites increased 5 percent 

between 2012 and 2013, to nearly 3.3 million in 2013. See Appendix IV 

for additional information on services and taxpayer use of TACs and 

volunteer sites since 2010.

IRS 

reported that it is planning to update its long-term web services strategy 

to include our recommended changes in early 2014. See Appendix III for 

additional information on website use from 2008 through 2013.

In 2012, we noted that IRS needs to dramatically revise its strategy for 

providing telephone and correspondence services and recommended that 

it define appropriate levels of telephone and correspondence services 

based on an assessment of demand and resources among other things.17

 16GAO, IRS Website: Long-Term Strategy Needed to Improve Interactive Services, 

IRS neither agreed nor disagreed with our recommendation, saying it 

already has an objective of providing taxpayers with access to accurate 

services while managing demand. However, IRS’s efforts to date have 

not reversed the declines in taxpayer service. We noted, and IRS officials 

acknowledged, that incremental efficiency gains of the type IRS has 

realized in recent years would not be enough to combat the imbalance 

between taxpayer demand for services and available resources. We 

concluded that, with expected levels of resources, reversing the declines 

in telephone and correspondence services may require IRS to consider 

difficult tradeoffs such as limiting the types of phone calls that would be 

answered.

GAO-13-435 (Washington, D.C.: Apr. 16, 2013).

17GAO-13-156.

IRS Has Proposed 

Eliminating Some Services 

in 2014, but the Cuts May 

Not Stop the Deterioration 

in Performance or Address 

GAO’s Recommendation 

from Last Year
Page 13 GAO-14-133 2013 Tax Filing Season

Given expected budget levels for the 2014 filing season, IRS has 

identified six services for elimination or reduction, which officials told us 

were chosen because taxpayers had other options. IRS officials reported 

that they have discussed these options within IRS, with external 

stakeholders, and with Congressional committees that oversee IRS 

operations.

IRS’s proposed service eliminations or reductions are:

1. Limiting tax law inquiries to answer only basic tax law questions 

during the filing season, and reassigning CSRs to work accountrelated inquiries;

2. Launching the “Get Transcript” tool, which will allow taxpayers to 

obtain a viewable and printable transcript online on www.irs.gov, and 

redirecting taxpayers to this and other automated tools for getting a 

transcript;

3. Redirecting refund-related inquiries to automated services and not 

answering refund inquiries until 21 days after the tax return has been 

filed, except for refunds held for potential fraud;

4. Limiting access to the Practitioner Priority Services line to only those 

practitioners working tax account issues;

5. Limiting live assistance and redirecting requests for domestic 

Employer Identification Numbers to IRS’s online tool; and

6. Eliminating free return preparation at IRS’s TAC sites and directing 

taxpayers to free alternatives including at IRS partner sites staffed by 

volunteers.

The proposed elimination or reductions in services are examples of the 

difficult choices that we recommended need to be made if more timely 

access to telephone service and handling of correspondence is going to 

be achieved from the available IRS resources. While these cuts represent 

initial steps consistent with our recommendation from last year, they do 

not fully address it. Furthermore, even with these reductions, officials in 

IRS’s Wage and Investment Division responsible for the filing season told 

us they are anticipating that the level of telephone service could be 61 

percent in 2014.18

 18The level of service realized in 2014 will depend on a variety of factors, including the 

actual volume and complexity of calls.

IRS reported that it is working on final approval to 
Page 14 GAO-14-133 2013 Tax Filing Season

implement the service options and bring about a better balance between 

demand for service and resources. However, the continued deterioration 

in taxpayer service in 2013, high cost of shifting staff from collections 

work to the telephones and correspondence, and anticipated level of 

telephone service for 2014 all highlight the importance of continuing to 

address the recommendation we made last year based on the need for a 

dramatic revision in IRS’s strategy. The choice may be between providing 

a broader range of services at a low level of performance or a narrower 

range of services at a higher level of performance. Until IRS develops a 

strategy, it risks not communicating expectations about the level of 

services it can provide based on the resources available. IRS could then 

use the strategy to facilitate a discussion with Congress and other 

stakeholders about the appropriate mix of service, level of performance, 

and resources.

Taxpayers can apply for IAs online, by phone, in person, or by completing 

and mailing Form 9465, Installment Agreement Request.19

Table 4 shows that, in fiscal year 2012, IRS approved more than 3 million 

new IAs and collected $9.8 billion. At the end of fiscal year 2012, IAs 

represented nearly $28 billion in unpaid balances. The difference 

between the amount of unpaid balance of assessment and amount 

collected is due to the fact that IAs can be paid off over multiple years.

According to IRS officials, the increases in IA inventory since 2009 are 

due to a variety of factors, such as more taxpayers entering into IAs 

because of expanded eligibility and payment terms discussed below, and 

changes in the economy.

Depending on 

the type of IA, taxpayers can make their monthly payments via check or 

money order, direct debit, payroll deduction, online, or credit card. If a 

taxpayer fails to make monthly payments on time or incurs a new tax 

liability, the taxpayer is considered to be in default on the IA with a few 

exceptions. Appendix V shows the process for taxpayers entering into 

and making payments on IAs.

Table 4 also shows, in fiscal year 2012, taxpayers defaulted on 

approximately 1.2 million IAs. In 2012, we found that, of those taxpayers 

 19If a taxpayer owes more than $50,000, Form 433-F, Collection Information Statement, 

must also be completed and submitted.

IRS Recently 

Expanded the 

Installment 

Agreement Program,

but Some Case 

Handling Practices 

Lack Standardization 

and are 

Unnecessarily 

Redundant
Page 15 GAO-14-133 2013 Tax Filing Season

that had a balance due at the filing deadline, almost two-thirds eventually 

paid in full or entered into IAs, and about 18 percent of taxpayers 

defaulted on IAs in fiscal year 2012.20

Table 4: Total Installment Agreement Inventory and Tax Liability, Fiscal Years 2009 through 2012

Therefore, we recommended that 

IRS pilot risk-based approaches for contacting taxpayers who have a 

balance with the goal of reducing the default rate. IRS agreed with the 

recommendation, but has not funded the related research project. Until 

IRS tests and implements more advanced risk-based approaches, it may 

be challenged to deal with the default problem.

IA Inventory FY 2009 FY 2010 FY 2011 FY 2012

New IAs Entered Into During FY 3,107,932 3,226,203 3,241,096 3,168,853

Number of Full Paid IAs by End of FY 1,337,095 1,724,908 1,912,324 1,850,606

Number of Defaulted IAs by End of FY 966,231 1,169,109 1,152,420 1,211,600

IA Inventory by End of FY 3,246,169 a 3,558,757 3,724,866 3,827,824

Tax Liability FY 2009 b FY 2010 FY 2011 FY 2012

Unpaid Balance of Assessments (UBA) at End of FYc $19,144,476,513 $21,876,520,273 $25,696,713,649 $27,974,831,425

Amount Collected During FY $6,580,411,267 d $7,913,483,261 $8,830,789,983 $9,812,942,707

Legend: FY = Fiscal Year.

Source: IRS Collection Activity Report data.

a

The total numbers of new, full paid, and defaulted IAs will not equal the total inventory at the end of a 

given fiscal year because IAs can be entered into, paid off, defaulted on, reinstated, or terminated at 

any given time during repayment schedule which can span several years.

b

The amount collected is the amount collected for all IA cases that were in Collection status during 

the period. IAs for which a payment was received during the period but were either full-paid or 

defaulted on during that same period will be included in the amount collected but not in the Unpaid 

Balance of Assessment (UBA).

c

UBA includes taxes, penalties, and interest less any payments (not including any accrued amount) .

d

In 2012, IRS expanded its Fresh Start Initiative to assist struggling 

taxpayers in meeting their tax obligations.

IAs give taxpayers the opportunity to repay their tax liabilities over several years. As a result, IA 

payments would be received in subsequent years and be added to the total amount collected over 

time.

21

 20

Specifically, the threshold for 

GAO-13-156. 

21In 2011, IRS announced new steps to help taxpayers with their tax liabilities known as 

the Fresh Start Initiative. Its main goal was to change IRS’s lien filing practices to lessen 

the negative effect on taxpayers. Subsequent changes to the IA program are considered 

an expansion of Fresh Start.
Page 16 GAO-14-133 2013 Tax Filing Season

requesting a streamlined IA was raised from $25,000 to $50,000 and the 

maximum term for streamlined IAs was increased from 60 to 72 months 

for repayment. The expanded eligibility for streamlined IAs in particular 

allowed more people to qualify for the program and potentially pay taxes 

owed. Also under Fresh Start, IRS is encouraging taxpayers with IAs to 

sign up for direct debit agreements which generally have lower default 

rates. IRS said it is difficult to pinpoint which specific aspects of the Fresh 

Start initiative are effective. IRS is currently conducting an analysis of the 

initiative’s benefits in terms of collection and default prevention. As of 

November 2013, that analysis has not been completed.

IRS allocated about 1,800 FTEs to the IA program in fiscal year 2012, 

which is over a 10 percent increase since fiscal year 2009. The level of 

and growth in this area highlights the importance of testing and 

implementing risk-based approaches for collecting balances due including 

through IAs.

IRS recently made process improvements to help streamline and 

standardize its IA program operations. For example, IRS introduced 

automated tools, known as the Compliance Suite, which provides tax 

examiners (TEs) with online tools such as helping the TE determine 

which letter to send to the taxpayer. However, despite these process 

improvements, we observed some inefficiency. For example, we 

observed that some TEs had developed their own extensive sets of 

prewritten, standardized case notes that allowed them to quickly update a 

taxpayer’s account because the Compliance Suite lacked that capability.

IA program managers were aware of this practice, said it gives TEs 

flexibility in writing case notes, but agreed that automated case notes may 

yield efficiencies. They also noted that the Compliance Suite was only 

introduced a few months ago, and its full capabilities were being explored. 

We agree that flexibility is desirable but providing an extensive set of 

standardized notes in the Compliance Suite would give all TEs the option 

of using them. This could lower the cost of making account entries.

In addition, we found unnecessary redundancy. We observed TEs 

handwriting case notes on paper copies of IAs and then typing those 

same notes into IRS’s computer systems. IRS managers agreed this 

practice is redundant, and TEs noted this is the way it has always been 

done. Such redundant data entry increases the time it takes TEs to 

Some IA Case Handling 

Practices Lack 

Standardization and 

Include Unnecessary 

Redundancy
Page 17 GAO-14-133 2013 Tax Filing Season

handle each IA case. Furthermore, GAO’s internal control guidance 

states that control activities should be regularly evaluated to ensure their 

appropriateness in intended function.22

By not developing a more standardized comprehensive set of case notes 

and not reducing redundant data entry, IRS is missing opportunities to 

reduce resources devoted to handling IA case files. With 1,800 FTEs 

devoted to the program, small gains in the efficiency of each TE could 

add up to substantial savings.

Beginning in October, IRS uses prior year tax returns, third-party reports, 

such as W-2s and Forms 1099, and applications for automatic extensions 

of time to file to identify taxpayers who appear to have missed the midApril tax return filing deadline. In June 2013, we found that most 

information reports are not received by IRS until well after the April tax 

return filing deadline.23

IRS does a second match in March of the following year for taxpayers 

who filed an extension. According to IRS officials, not all potential nonfiler cases identified are selected for notification and review; IRS 

prioritizes cases based on factors such as income, the potential to collect 

taxes due, and whether the taxpayer is an IRS or other federal employee.

After the first match in October, IRS sends notices to non-filers in 

November and December requesting the return or a justification for not 

filing. IRS begins to send notices to cases from the second match 

between March and July.24

 22 GAO, Standards for Internal Control in the Federal Government, AIMD-00-21.3.1 

(Washington, D.C: November 1999). 

23 There are more than 40 different types of information returns received from third parties 

such as W-2s, 25 of which are directly matched against income tax returns filed by 

individuals, including Form W-2, Wage and Tax Statement, and Form 1099 series. We 

found that most information returns are received after their original due dates, which 

further delays IRS matching process. See GAO, Tax Refunds: IRS is Exploring 

Verification Improvements, but Needs to Better Manage Risks, GAO-13-515 (Washington, 

D.C.: June 4, 2013). 

24According to IRS officials we met with, if the taxpayer does not respond, IRS can send 

the taxpayers up to three additional notices to request the delinquent return.

IRS’s Identification of 

and Notification to 

Potential Non-Filers 

Takes Months after 

Filing Deadlines
Page 18 GAO-14-133 2013 Tax Filing Season

Table 5 shows that, in tax year 2010 (the year for which the most current 

data are available), IRS identified over 7.4 million potential non-filer 

cases. Of these, IRS selected more than 3.2 million cases for review and 

sent notices to those non-filers requesting the return. IRS officials said the 

percentage of cases selected for review fluctuates based on resources 

and selection criteria, such as income and potential balance due 

amounts, which vary from year-to-year.

Table 5 also shows in tax year 2008 (the year for which the most 

complete data are available), IRS received approximately 1.4 million 

delinquent returns, which is about 39 percent of the non-filers selected for 

review and notification. IRS officials attribute the relatively low number of 

returns filed in response to notices to taxpayers that have stopped filing 

for unknown reasons, those that do not have the resources to pay the 

potential balance due, and taxpayers who do not file until more extensive 

collection actions are taken. Securing the delinquent return as soon as 

possible as part of IRS’s notification process is important because 

taxpayers continue to incur penalties and interest until they file a return 

and IRS undertakes increasingly expensive enforcement actions against 

the taxpayer.

Table 5: Potential Individual Non-filer Cases Identified and Number and Percentage 

of Cases Selected for Review, Tax Years 2007 through 2010

TY 2007 TY 2008 TY 2009 TY 2010

Potential non-filer cases identified 6,305,323 7,610,026 7,119,652 7,427,534

Number of non-filer cases selected 

for review and notices sent 

2,973,144 3,473,818 3,288,560 3,224,601

Percent of cases selected for 

review

47 46 46 43

Number of Delinquent Returns 

Filed

1,222,800 a 1,371,619 1,043,019 606,873

Source: IRS.

Legend: TY = Tax Year.

a

In addition to taxpayers who do not respond to notices, IRS’s existing 

non-filer strategy notes that IRS also has a significant problem with repeat 

non-filers. For fiscal year 2012, IRS data shows that 43 percent of closed 

cases were repeat non-filers that did not file for more than 1 tax year.

IRS is still pursuing non-filers for all tax years. As a result, the number of returns filed is likely to 

increase particularly for tax years 2009 and 2010.
Page 19 GAO-14-133 2013 Tax Filing Season

As of November 2013, IRS is waiting on executive approval for its 

updated non-filer strategy which it expects to receive by the end of the 

year and should address how IRS plans to improve non-filer compliance 

including notice response and repeater rates. IRS is currently analyzing 

data on the characteristics of non-filers, such as filing status, income, and 

other key characteristics, and their response rates to the notifications to 

determine the best approach, and expect this effort to be completed in 

January 2014. IRS officials also are considering several initiatives for 

improving the notification process once its updated non-filer strategy is 

approved.

Despite efficiency gains in processing returns, additional website 

services, and shifting employees from working collections cases to 

handling telephone calls and correspondence, the gap between 

taxpayers’ demand for service and IRS resources widened. As a result, 

taxpayer access to IRS’s telephone assistors remained at a low level and 

the percentage of overage correspondence grew. The widening gap 

highlights the importance of fully implementing our recommendation 

made last year for a dramatic revision in managing taxpayer service that 

defines an appropriate level of service and recognizes both the demand 

for services and resources available. We stressed that this would mean 

making difficult tradeoffs. Consistent with our recommendation, IRS has 

proposed eliminating or reducing some services. By eliminating or 

reducing some services IRS should be able to devote more resources to 

its continuing services. However, IRS officials told us that the cuts 

proposed so far may not reverse the decline in telephone and 

correspondence performance. As a consequence, the cuts may only be a 

down payment on the difficult choices needed and our recommendation 

needs to be fully addressed. Fully addressing our recommendation would 

result in a strategy that could be used to facilitate a discussion with 

Congress and other stakeholders about the appropriate mix of service, 

level of performance, and resources.

The imbalance between the demand for services and resources also puts 

a higher priority on scrutinizing existing processes for possible further 

efficiency gains. We identified opportunities in the processing of 

installment agreements where the existing process could be further 

streamlined to reduce resources by standardizing case notes and 

reducing unnecessarily redundant data entry.

Conclusions
Page 20 GAO-14-133 2013 Tax Filing Season

We recommend that the Commissioner of Internal Revenue develop a set 

of standardized account entries and eliminate unnecessary redundancy 

when entering installment agreement data into accounts.

We provided a draft of this report to the Acting Commissioner of Internal 

Revenue. IRS provided written comments on a draft of the report, which 

are reprinted in Appendix VI. IRS also suggested technical changes to the 

report, which we incorporated where appropriate.

IRS did not state whether it concurred with the recommendation. 

However, IRS acknowledged that standardized account entries can 

sometimes lead to increased efficiencies and lower costs, and taxpayers 

and IRS can benefit by the elimination of redundancy in its processes. 

IRS stated that as it continues to evaluate the Compliance Suite to 

determine its full capabilities, it will (1) explore whether the introduction of 

standardized account entries into the IA process will yield increased 

efficiencies and lower costs; and (2) evaluate whether there are 

unnecessary redundancies in its current processes that can be eliminated 

without adversely affecting tax administration. GAO believes the 

recommendation remains valid as discussed in the report.

We plan to send copies of this report to the Chairmen and Ranking 

Members of other Senate and House committees and subcommittees that 

have appropriation, authorization, and oversight responsibilities for IRS. 

We will also send copies to the Acting Commissioner of Internal Revenue, 

the Secretary of the Treasury, the Chairman of the IRS Oversight Board, 

and the Deputy Director for Management of the Office of Management 

and Budget. In addition, the report will be available at no charge on the 

GAO website at http://www.gao.gov. 

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
Page 21 GAO-14-133 2013 Tax Filing Season

If you or your staff have any questions about this report, please contact 

me at (202) 512-9110 or whitej@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in Appendix VII.

James R. White

Director, Tax Issues

Strategic Issues
Appendix I: Installment Agreement Types and 

Characteristics

Page 22 GAO-14-133 2013 Tax Filing Season

Of the four types of IAs available to individual taxpayers, the most 

common type of IA by far is the streamlined.

Table 6: Types and Characteristics of Installment Agreements 

Type of 

Installment 

Agreement (IA) Amount Owed

Maximum 

Payment Term

Required 

Payment 

Method User Fee b

Collection 

Information 

Statement 

Requirement c

Management 

Approval 

Requirement d

Guaranteed

e

$10,000 or less

(Total assessed 

balance of 

income tax not 

including penalty 

or interest)

3 years All methods 

available

$105

($52 for direct 

debit)

No No

Streamlined $50,000 or less

(Unpaid balance 

of assessments)a

6 years Direct debit or 

payroll deduction 

if unpaid balance 

of assessment is 

greater than 

$25,000

$105

($52 for direct 

debit)

No No

Regular/

Routine

Any amount Collection Statute 

Expiration Date

All methods 

available f $105

($52 for direct 

debit)

Yes Yes

Partial Payment Any amount Collection Statute 

Expiration Date 

(with option for 

extension)

All methods 

available

$105

($52 for direct 

debit)

Yes Yes

Source: IRS.

a

Unpaid balance of assessment includes taxes, penalties, and interest less any payments (not 

including any accrued amount).

b

Payment methods include check, money order, direct debit, payroll deduction, online, or credit card.

c

Taxpayers with income at or below 250 percent of the Department of Health and Human Services 

poverty guidelines may apply for a reduced user fee of $43 through Form 13844, Application for 

Reduced User Fee For Installment Agreements. IRS also systematically determines if taxpayers 

qualify for a reduced user fee based on the most recently filed tax return. If the taxpayer qualifies, the 

taxpayer will automatically be charged the reduced fee. The user fee for restructuring or reinstating 

an established installment agreement is $45 regardless of income levels or payment method.

d

IRS requires financial statements that must be submitted by the taxpayer to determine eligibility and 

payment amounts.

e

IRS requires managerial approval of IAs over $50,000 or partial payments.

f

The Collection Statute Expiration Date is a statutory 10-year period for collection of the assessed tax 

liability.

Appendix I: Installment Agreement Types 

and Characteristics
Appendix II: Weekly Toll-Free Calls and 

Percentage of Callers Seeking and Receiving 

Live Assistance

Page 23 GAO-14-133 2013 Tax Filing Season

Figure 1 shows that during the 2013 filing season, the Internal Revenue 

Service (IRS) received most of its calls in the period leading up to and 

including the April 15th filing deadline, with the heaviest volume of calls in 

the early to mid-February timeframe. Importantly, the figure below shows 

that access to live assistance begins to decline sharply in the weeks 

following the filing deadline.

Figure 1: Weekly Toll-Free Calls and Percentage of Callers Seeking and Receiving Live Assistance for the Week Ending

January 5 through June 29, 2013

Appendix II: Weekly Toll-Free Calls and 

Percentage of Callers Seeking and 

Receiving Live Assistance
Appendix III: Use of IRS Website and

Online Services

Page 24 GAO-14-133 2013 Tax Filing Season

Table 7 shows that in 2013 use of IRS.gov increased by 26 percent 

compared to 2012. Use of the online tools such as the volunteer site 

locator, Where’s My Refund, electronic personal identification number 

requests, and interactive tax assistance tools continued to increase in 

2013. IRS attributes declines in downloading forms and publications, and 

generally searching the website, to changes in how IRS tracks website 

use in these areas.

Table 7: Website Use from the 2008 through 2013 Filing Seasons

2008 2009 2010 2011 2012 2013

Percent 

change 

from 

2012 to 

2013

Total visits to IRS.gov (in millions)

a

292 b 235 239 250 297 374 26

Taxpayer forms, publications, and instructions 

downloads (in millions)

136 137 157 166 259 154 c —

Searches (in millions)

d

125 263 277 312 290 60 —

Volunteer site list (in thousands)

e

n/a f n/a 48 152 g 152 h 350 130 i

Self-Service Tools

Where’s My Refund? (completion in millions) 38 53 64 73 126 193 53

Electronic Filing Pin Request (completion in millions) n/a n/a 5 10 12 15 25

Online Payment Agreement 

(completion in thousands)

19 34 43 26 64 j 63 -2

Interactive Tax Assistance Tools 

(completion in thousands)

n/a k n/a 42 212 l 388 454 17

Legend: n/a = not applicable

Source: GAO analysis of IRS data.

Note: Data are from January 1 to July 31 for each year unless otherwise noted.

a

Numbers in the table are rounded, and the percent change has been calculated using the rounded 

values presented in the table.

b

A visit is a series of actions that begins when a visitor views their first page from the server, and ends 

when the visitor leaves the site.

c

Data is for January 1 to June 30, 2012.

d

For 2012, IRS reported that an issue with an external user script artificially inflated the number of 

actual downloads for this year. Also, for 2013, IRS revised its methodology for tracking downloads of 

forms, publications and instructions. Therefore, the figures reported for these years are not 

comparable.

e

Appendix III: Use of IRS Website and

Online Services

Page views include both successful search results and search results not found. In 2013, IRS 

revised its methodology for tracking taxpayer searches on IRS.gov. Previously, IRS tracked the total 

number of page views for all searches during a single visit. For 2013, IRS began tracking total unique 

searches, which does not include multiple searches for the same information in a single visit. This 

change accounts for some of the variances in website traffic between 2012 and 2013, and therefore 

the figures reported for these years are not comparable.
Appendix III: Use of IRS Website and

Online Services

Page 25 GAO-14-133 2013 Tax Filing Season

f

2010’s listing was on 1 page, with an index at the top. 2011’s listing was split into 52 pages; one for 

each state, the District of Columbia, and Puerto Rico. For 2012, IRS created a volunteer site locator 

tool for searches using zip codes.

g

Page views data are for February 12 through July 31, 2010.

h

Data are from January 1 through June 30, 2011.

i

Data represents the number of visits to the disclaimer page where users leave IRS.gov to use the 

volunteer site locator application, hosted by the Department of Treasury.

j

A programming error led to a decrease in the number of completed agreements.

k

IRS introduced the interactive tax assistance tools in March 2010 and added more tools in 2011 and 

2012. As a result, the time frames and available services are not comparable.

l

Data are from March 7 through July 31, 2010.
Appendix IV: Services Offered at Walk-In and 

Volunteer Sites

Page 26 GAO-14-133 2013 Tax Filing Season

Face-to-face service remains an important component of IRS’s efforts to 

serve taxpayers, particularly those with low incomes or limited proficiency 

in English. Table 8 shows that, for 2013, the total number of contacts at 

walk-in sites, Taxpayer Assistance Centers (TAC) staffed by IRS 

employees, is the lowest level for the 4 year period shown. Further, return 

preparation has steadily declined since 2010 due to IRS’s continuing 

efforts to reduce expensive return preparation services. Conversely, the 

total number of returns prepared at sites staffed by volunteers has 

increased since 2010.

Table 8: Services Performed at IRS Taxpayer Assistance Centers and Sites Staffed by Volunteers, 2010 through 2013 

2010 2011 2012 2013

Percent change 

from 2012 to 2013

TAC

Total contacts 2,777,478 2,847,221 2,772,044 2,644,822 -5

Return preparation 222,624 a 201,413 148,075 124,797 -16

Tax law questions 177,002 153,398 128,746 110,115 -14

Account work notices 1,217,383 b 1,327,406 1,446,413 1,462,844 1

Forms 440,417 457,839 378,051 334,147 -12

Other 720,052 c 707,165 670,759 612,919 -9

Sites Staffed by Volunteers 

Return preparation 2,951,952 3,077,687 3,149,197 3,294,305 5

Percent of returns e-filed 95 96 97 98 1

Source: GAO analysis of IRS data.

Note: Data for each calendar year are for January 1 through April 30.

a

TAC return preparation counts include both individual and business contacts.

b

Account work notices includes assistance to taxpayers who need to pay taxes owed.

c

Appendix IV: Services Offered at Walk-In 

and Volunteer Sites

Other contacts include responding to correspondence, scheduling appointments, and providing selfassistance services, which do not fall into the defined categories.
Appendix V: Installment Agreement Process

Page 27 GAO-14-133 2013 Tax Filing Season

Figure 2: Example of Streamlined Installment Agreement Application and Payment Process

Note: There are other ways for taxpayers to enter the installment agreement (IA) process besides 

filing a balance due return, such as a new balance due as the result of either an amended return or a 

compliance assessment through IRS’s enforcement programs. In addition, taxpayers can also 

request an IA before receiving a tax bill. IRS is required to enter into an IA in certain cases, but 

generally has the discretion to determine whether to enter into one.

Appendix V: Installment Agreement Process
Appendix VI: Comments from the Department 

of the Treasury

Page 28 GAO-14-133 2013 Tax Filing Season

Appendix VI: Comments from the 

Department of the Treasury
Appendix VI: Comments from the Department 

of the Treasury

Page 29 GAO-14-133 2013 Tax Filing Season
Appendix VI: Comments from the Department 

of the Treasury

Page 30 GAO-14-133 2013 Tax Filing Season
Appendix VII: GAO Contact and Staff 

Acknowledgments

Page 31 GAO-14-133 2013 Tax Filing Season

James R. White, (202) 512-9110, whitej@gao.gov

In addition to the individual named above, Joanna Stamatiades, Assistant 

Director; Shilpa Grover; Emily Gruenwald; Lois Hanshaw; LaKeshia Allen 

Horner; Kirsten Lauber; Natalie Maddox; Karen O’Conor; Anna Maria 

Ortiz; Kelly Rubin; and John Zombro made key contributions to this 

report.

Appendix VII: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(451029)
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