TQM at the IRS (1994)

The IRS is embracing private-sector management techniques to solve its problems. Total quality management (TQM) is an accepted and proven management technique in the private sector, but it only recently found acceptance in the public sector. In the face of well-documented and well-publicized quality problems, the Internal Revenue Service introduced a quality improvement program in 1986 and reaffirmed its commitment to quality with A Plan for Improving Quality, Customer Service, and Organizational Performance in 1991. This strategic plan outlines the top-down approach necessary to transform the IRS into a quality organization that consistently produces and delivers services exceeding customers' needs and expectations. TQM is finding acceptance in the government. A number of state and local governments have implemented TQM programs. Federal agencies also are climbing on the bandwagon, with over two-thirds reporting some level of TQM implementation in a recent GAO survey. Most of these agencies are in the early stages of developing TQM programs, with over 75% beginning implementation in 1990 or later. This article discusses key characteristics and expected results of a TQM management approach and examines the IRS's application of it. Specifically addressed are the integration of TQM with two of the IRS's primary initiatives for the 1990s: tax systems modernization (TSM) and Compliance 2000. THE IRS's COMMITMENT TO QUALITY The IRS collects and accounts for over $1 trillion in revenue each year. Yet it is estimated another $100 billion of tax owed each year is not collected. In addition, millions of unnecessary taxpayer contacts are made annually requiring countless hours of taxpayers' time. Taxpayer service also leaves much to be desired. The General Accounting Office (GAO) reported that while IRS staffers correctly answered 89% of questions posed by test callers in 1993 (up from 88% in 1992), three out of four calls during filing season were not answered at all. Individual taxpayers sometimes are the beneficiaries of IRS quality problems. In 1992, the IRS sent out erroneous tax refunds in excess of $175 million to more than 270,000 filers. Faced with increasing criticism about the quality of its services, the IRS has begun to modernize its technology and empower employees to better serve taxpayers. However, the IRS needs a systematic approach to integrate its quality improvement programs. IMPLEMENTING TQM AT THE IRS The IRS has three major goals: Enhancing quality and productivity through its business processes, reducing the taxpayer burden and improving voluntary compliance. It plans to achieve these goals through a combination of quality improvement initiatives and modernization efforts including * Increasing the quality of services provided to taxpayers through employee empowerment--equipping workers with appropriate skills, resources and authority to do the job right. * Adhering to the highest standards of professional and ethical conduct through active leadership that both clarifies and communicates expectations for ethical behavior and also fosters a climate supporting and demonstrating a commitment to such behavior. * Embracing and managing diversity to capitalize on the different experiences, values, perspectives and concerns in the work force. * Implementing TSM. * Implementing the Compliance 2000 initiative. TQM and TSM. The specific objectives of TSM include * Modernizing tax document input processing. * Minimizing paper processing. * Making taxpayer information readily accessible to IRS employees. * Reducing recordkeeping and tax administration costs. * Increasing the security and privacy of sensitive taxpayer information. * Ensuring adequate capacity and flexibility to meet the IRS's future needs. From a taxpayer viewpoint, technological modernization of the information processing and telecommunication systems should help eliminate unnecessary contacts, provide more timely responses to questions with fewer hassles and provide more timely access to tax returns and other taxpayer information. …