Telephone Assistance: Adopting Practices Used by Others Would Help IRS Serve More Taxpayers
Released: 1995-04-12T00:00:00

Letter

Introduction

Taxpayers often need assistance in understanding tax laws, preparing returns, and getting adjustments made to their tax accounts. Historically, the Internal Revenue Service (IRS) has considered telephone assistance to be the most efficient method to help taxpayers. IRS has three toll-free telephone programs that taxpayers can use to seek assistance, deal with delinquent taxes, and obtain forms and publications. Of these programs, Taxpayer Services has operated the largest one—the telephone assistance program—for almost three decades. According to IRS, the program is a principal means for promoting the public’s confidence in IRS and voluntary compliance with tax laws. However, in recent years, IRS has been increasingly unable to answer all of the calls it receives.

IRS’ Taxpayer Service Telephone Assistance Program

Taxpayers seek assistance from IRS by calling with questions or problems that arise in three basic areas—tax law, filing procedures, and account status. Tax law inquiries involve technical tax information related to specific laws and regulations. Procedural inquiries involve routine issues like where to file a tax return or how to get a particular form or publication. Account inquiries concern tax bills, notices, and other correspondence relating to a specific taxpayer.

Assistors at 27 IRS call sites answer taxpayers’ calls year round. According to IRS officials, assistors at the call sites have access to IRS’ 10 service center databases, which contain taxpayer account information. In fiscal year 1994, these call sites received almost 156 million calls. IRS also operates Tele-Tax, an automated system in which taxpayers can listen to selected topic tapes 24 hours a day and inquire about the status of their refunds Monday to Friday from 7:00 a.m. to 11:30 p.m. In fiscal year 1994, Tele-Tax answered about 34 million calls. Organizationally, each call site is located within an IRS district office. Call sites manage their day-to-day operations, although they receive program direction from one of seven regional offices. The regional offices report directly to the National Office.

The goal of the telephone assistance program is to provide consistently prompt and accurate service to taxpayers. According to IRS, consistently prompt service means that all taxpayers have the same opportunity to receive assistance and be connected to an assistor within a reasonable period of time, regardless of geographic location, day of week, or time of day. IRS is working to develop a specific standard for “reasonable period of time” as it acquires more modern equipment. According to IRS, accurate service means that taxpayers should receive complete, concise, and correct answers to their telephone inquiries. IRS officials said that these are continuing goals that do not change from year to year.

In fiscal year 1994, IRS call sites had 5,786 technical employees assigned to its telephone assistance program during its peak staffing period. IRS reported that 3,450 were permanent assistors and 2,336 were part-time or seasonal assistors. Assistors are either taxpayer service representatives, who are entry-level employees and answer basic types of questions, or taxpayer service specialists, who are more experienced and answer more complex inquiries. In addition to responding to taxpayer inquiries while on the telephone, assistors have other responsibilities that take them off the telephone, such as researching answers to taxpayers’ questions, attending training, team building meetings, award ceremonies, blood drives, and union meetings.

At the time of our review, each of the call sites uses one of eight different telephone systems to answer its incoming calls. IRS is replacing older systems at some of its call sites with new equipment. As of November 1994, IRS had installed new equipment at 19 sites. Among other things, the new equipment allows taxpayers to use menus to route calls to assistors, access Tele-Tax, and to remain in queue or on-hold if all assistors are busy, and to leave messages if they do not care to wait for an answer. According to IRS officials, these features will help to increase the number of calls that IRS can answer. Installing this equipment is part of IRS’ Customer Service Vision to improve service to taxpayers.

IRS’ Customer Service Vision calls for consolidating its 3 telephone services and related service and compliance activities that now operate at 70 locations into 23 customer service sites. The customer service sites are to provide one-stop service to taxpayers seeking answers to any tax-related question. IRS plans for the customer service sites to provide extended service hours and to eventually employ about 22,000 staff drawn from the 3 existing telephone assistance programs and from other activities that do not now involve intensive telephone work. This would be about 7,000 fewer staff than are currently handling all the work planned for consolidation. In an effort to smooth this transition, IRS and the National Treasury Employees Union (NTEU), which represents IRS’ nonmanagement employees, formed a partnership to share pertinent information and ensure direct involvement of union representatives in decisions affecting IRS employees.

Since 1987, we have issued several reports and testified several times on taxpayers’ problems with the accuracy of answers received from IRS’ assistors and the accessibility to IRS’ telephone assistance program. Our reports showed that IRS has made significant progress in improving the accuracy of the answers assistors provide to tax-law questions. For example, in 1989, we reported that IRS was providing taxpayers with accurate responses to their questions only 63 percent of the time. By 1993, following an aggressive IRS effort to improve, the accuracy of responses had increased to 89 percent due, in part, to the increased management emphasis.

In contrast to the improvement in accuracy, taxpayers’ ability to reach IRS’ assistors has not improved over the years. For example, in our report on the 1990 tax filing season, we said that taxpayers called IRS about 51 million times and IRS answered about 17.4 million of those calls, a 34 percent answer rate. We noted that IRS had answered about 58 percent of taxpayers’ calls during the 1989 tax filing season. IRS attributed the reduced accessibility for the 1990 tax filing season to funding cutbacks and a higher-than-expected demand for telephone service. As we continued to report on taxpayers’ ability to reach IRS’ assistors during ensuing filing seasons, the percentage of calls answered declined each year, reaching a low of 21 percent during the 1994 filing season.

Objectives, Scope, and Methodology

Because of the continuing decline in taxpayers’ ability to contact an IRS assistor, we reviewed IRS’ telephone assistance program to determine the nature and extent of the accessibility problem, compare IRS’ practices with other organizations that provide telephone assistance to identify practices IRS might use to answer more calls with existing staff resources, and identify reasons why IRS has been unable to answer more taxpayers’ calls.

To accomplish each of the objectives, we visited IRS’ National Office; the Central and Southeast Regions; and the Atlanta, Baltimore, Dallas, Indianapolis, Nashville, and Seattle District Office call sites. We judgmentally selected these locations to reflect the diverse operations at IRS’ call sites. Factors we considered when making our selection included accessibility rates, call volumes, staff hours, productivity rates, types of equipment, and geographic locations. Each of the sites we visited had been named a Customer Service Site under IRS’ Customer Service Vision plan. IRS’ National Office officials agreed that the sites we selected and fiscal year 1993 data from the sites would generally reflect the operations of the Taxpayer Services telephone assistance program.

To determine how Taxpayer Services uses its assistors and technology to answer calls, we interviewed officials from the Taxpayer Services, Research, and Technical Management Divisions; the Telephone Routing Interactive System Project Office; the Business Transition Office; and NTEU. We also met with IRS officials responsible for overseeing daily call site operations, including call site managers, system analysts, and quality review analysts. We also obtained and reviewed pertinent IRS documents relating to accessibility trends, management procedures, and telephone equipment for the telephone assistance program.

We sent questionnaires to Taxpayer Services Division Chiefs, who manage the call sites, at 31 of the 32 IRS toll-free call sites in operation at the time. (We excluded the Puerto Rico call site because it was considered international and had very few calls). Among other things, the questionnaires were used to ascertain current call site hours of operation and types of assistor performance standards used. Appendix II contains the results of the questionnaires.

At each of the six call sites we visited, we analyzed 2 weeks of data on operations during the period September 1992 through October 1993 to evaluate call site operations. During this time period, we identified and selected 2 separate weeks for each call site in which the call site used relatively the same number of staff hours but had variances in the number of calls it answered during those weeks. We collected numerous management information reports from each site’s call system, analyzing items such as the average time assistors were on the telephones and access rates by hour.

In addition, we compared IRS with other organizations that rely heavily on the telephone as a means of providing service to their customers. Specifically, we interviewed officials at a credit card company, an airline company, a power company, an insurance company, and the Social Security Administration (SSA). We also visited all of the organizations except the credit card company. We selected organizations well-known for providing customer service via telephone. Overall, our discussions with officials from these organizations focused on how they operated their telephone assistance programs, both in managing their employees and in using their technology, to maximize accessibility. Specifically, we obtained information from each of these organizations about their overall management approach and objectives for their telephone assistance programs; the business environment in which they operated; and the goals, management practices, operating standards, and performance measurement techniques they used in managing their programs.

To identify reasons IRS has been unable to answer more calls, we analyzed all the information we had collected for our first two objectives, giving particular attention to differences in the management approach taken by the organizations we visited and the environment in which they operated, as compared with IRS. We also reviewed earlier GAO and IRS studies and related material dealing with IRS’ efforts to improve the accuracy of its assistors’ answers to tax law questions and compared the management actions IRS took in dealing with that issue to actions it has taken to improve accessibility to the telephone assistance program. Finally, we discussed the issues identified in our analysis of all of this information with IRS and NTEU officials.

The organizations we contacted have objectives similar to IRS for their telephone assistance programs, although the private sector companies operate in a different environment. The private sector companies use the telephone not only to provide service, but to make sales and earn revenue, which in turn provides them with an added incentive to maximize their programs. IRS also uses its telephone assistance program to provide service and collect revenue. Each year, IRS provides service to thousands of taxpayers by answering their tax law questions, but it also collects a great deal of revenue in connection with taxpayer calls about their accounts. For example, IRS completed about 2.6 million new installment agreements in fiscal year 1994 to collect delinquent taxes from individual taxpayers. These agreements totalled $9.4 billion, many of which were arranged by Taxpayer Services assistors over the telephone.

Another similarity between IRS and the five organizations we contacted is that all received large numbers of calls. In fiscal year 1993, IRS received over 130 million calls. The largest number of calls made to 1 of the 5 organizations we contacted was to SSA, which received about 80 million calls in 1993. The smallest number of calls was made to the power company, which received about 4 million calls in 1993. There are similarities also between the nature of the calls made to the organizations we contacted and the calls made to IRS. The calls to the five organizations dealt with a variety of issues, but most of them were about customer account information, which makes up over half of IRS’ call workload.

The greatest similarity between IRS and the five organizations we contacted, however, is the basic requirement to answer the telephone. No service is provided, no sale can be made, and no tax revenue can be collected unless the telephone is answered. Because of the similarities between IRS’ telephone assistance program and the assistance programs in the five organizations we contacted, we believe that the telephone management practices we found common among the organizations would also be useful to IRS.

We did our work from August 1993 to September 1994 in accordance with generally accepted government auditing standards. We met twice with senior officials of IRS’ Taxpayer Services Division to discuss a draft of this report and incorporated their comments where appropriate. We also obtained written comments on a draft of this report from the Assistant Commissioner for Taxpayer Services. The Assistant Commissioner’s comments and our evaluation of them are presented on pages 48 to 52 and are reprinted in appendix I.

Taxpayers Have an Increasingly Difficult Time Reaching IRS Assistors

Despite IRS’ goal of providing consistently prompt service to taxpayers, over the past several years, more and more taxpayers’ calls have gone unanswered. Taxpayers have difficulty reaching IRS year-round. Their ability to reach assistors varies depending on the time of year, the day of the week, the time of day, and the call site that the taxpayer calls. Taxpayers’ difficulty reaching IRS results in millions of busy signals, lengthy on-hold times waiting for assistors, and millions of abandoned calls.

Taxpayers’ Access Continues to Be a Problem

Accessibility, or taxpayers’ ability to reach IRS assistors, has declined over the past several years. The number of calls IRS has answered has remained relatively constant, although the number of assistors available to answer taxpayers’ calls has declined. However, the number of calls IRS has received has increased. In fiscal year 1989, taxpayers had a 1 out of 2 chance of reaching an assistor; however, in fiscal year 1994, taxpayers had only a 1 out of 4 chance of getting through.

IRS is aware of the decline in the percentage of calls answered. For example, in fiscal year 1989, IRS estimated that 46 million taxpayers called for assistance and about 37 million of those calls were answered. Thus, IRS assisted about 80 percent of the estimated number of taxpayers who called for assistance.

For fiscal year 1994, IRS estimated that 67 million taxpayers called for assistance; about 36 million of those calls were answered, an assistance rate of only 54 percent. Figure 2.1 shows the general decline in taxpayer accessibility since fiscal year 1989.

Taxpayers’ ability to reach IRS assistors is not just a filing season problem, it exists year-round. This access pattern has been a problem for taxpayers for several years. As shown in figure 2.2, for fiscal year 1994, access for the filing season (January through April) was 21 percent, while access for the October through December and May through September periods was 39 and 21 percent, respectively. Other years have shown similar problems.

It is generally easier to reach an assistor at the end of the week, since call sites receive most of their calls on Monday and Tuesday. National Office officials told us that for many years, the sites have typically received most of their calls on Mondays and Tuesdays, causing access rates to be lower these days. Our work at the call site level generally showed this to be true. For example, figure 2.3 shows that during a week we analyzed for the Baltimore call site, access rates on Monday and Tuesday were 22 percent and 19 percent, respectively. That same week the access rate was much higher at the end of the week, reaching 70 percent on Friday. Access rates were lower at the beginning of the week during 8 of the 12 weeks we analyzed.

The best time of day to call and reach an assistor appeared to vary from call site to call site. Some taxpayers had an easier time reaching assistors early in the day, while others had an easier time at the end of the day. For example, Atlanta’s lowest access rate was during the first hour of operation, Nashville’s lowest rate was during lunch time, and Seattle’s lowest rate was at the end of the day. We found no clear trends in Indianapolis and Dallas, and Baltimore could not provide time-of-day data for our analysis.

Taxpayers’ ability to reach an assistor also varied depending on the taxpayer’s location. IRS has been trying to equalize taxpayers’ ability to reach its assistors, but taxpayers’ chances of getting through varied by call site. For example, in fiscal year 1994, a caller served by IRS’ call site in Jacksonville, Florida, had a 17-percent chance of having a call get through; a caller served by the Des Moines, Iowa, call site had a 34-percent chance of getting through. The nationwide access rate for fiscal year 1994 was 23 percent. (See app. III for access rates for each call site during fiscal year 1994.)

Low Accessibility Results in Many Busy Signals, Long Wait Times, and Many Abandoned Calls

When taxpayers call IRS, either their calls are answered or they receive a busy signal. If their calls are answered, they may be placed on hold to wait for an assistor to become available. At this stage, many callers hang up before receiving an answer to their questions. The consequences of low accessibility rates are reflected in the number of busy signals taxpayers receive, the amount of time they are on hold, and the number of taxpayers who abandon their calls. Also, IRS reports show that some taxpayers may never call back.

The number of busy signals has greatly increased over the past few years. In 1989, 47 percent, or about 34 million, of the more than 73 million calls to IRS received busy signals when taxpayers tried to call. By fiscal year 1994 busy signals increased to 73 percent of all calls, as shown in figure 2.4. IRS believes that when calls to sites are heavy, taxpayers redial to make numerous call attempts before reaching an assistor, which accounts for many of the busy signals. However, some taxpayers who attempt to reach IRS but only receive busy signals may give up and may not try to call back. For example, for the week ending April 16, 1994, an IRS report shows that at least 1 million taxpayers called at least once, did not reach an assistor, and never called back that week.

Some callers who got through faced long periods on hold waiting for an assistor. Taxpayers are put on hold for a variety of reasons. For example, some “gates” may be receiving more calls than others, and these wait times can become lengthy. During 1 day at the Seattle call site, average taxpayer on-hold time for one gate reached 34 minutes. The average on-hold time for the same gate for the week was about 14 minutes. In Nashville, average on-hold time reached 20 minutes for one gate. For the week it was about 14 minutes. At the Baltimore call site, on-hold time for one gate reached 21 minutes for 1 of the days we reviewed. For the week it was about 11 minutes. The other sites we visited did not have this information available.

In November 1993, IRS issued guidelines for on-hold time standards for call sites with new equipment, but in September 1994 it began trying to redefine the standards. In January 1995, these guidelines were still being redefined.

Many taxpayers who do get into the system never have their questions answered. Due to the lengthy on-hold times, many taxpayers abandon their calls before reaching an assistor. The number of abandoned calls has increased from fiscal year 1989 to 1994, rising from 2.8 million to 6 million calls. In addition, some taxpayers who reach an assistor may be told to call back if assistors are too busy to research their questions.

Adopting Practices Commonly Used by Other Organizations Would Enable IRS to Answer More Calls

The cornerstone of good telephone service is providing customers easy access to telephone representatives. While SSA has had its own difficulties in improving its telephone assistance, SSA and private sector companies we contacted have implemented management practices and acquired modern information technology specifically aimed at increasing their customers’ ability to reach them and providing their representatives with access to customer account information more easily and quickly. SSA and private sector company officials told us that these management practices and technology improvements have contributed to their ability to provide quality telephone assistance to their customers, including allowing their customers to reach them beyond normal working hours. Although IRS has been able to answer about 36 million calls over the last several years with declining resources, it has not used the management practices and has not yet acquired information technology commonly used by the organizations we contacted to make it easier for taxpayers to reach assistors. IRS has made recent improvements in using its existing technology, but it has not always used its existing technology to its full potential.

SSA and Private Sector Toll-Free Programs Are Managed to Maximize Calls Answered

We contacted SSA and four private sector companies that rely heavily on the telephone as a means of providing service to their customers. To maximize the number of calls answered, their toll-free programs commonly established challenging program goals for answering as many calls as possible based on customers’ needs; standards for the number of hours employees were expected to be on the telephones and the number of calls to be answered; standard hours of operation, often extending beyond a 9-hour work day; nationwide standards and uniform ways to measure operations and nationwide call routing and easy access to customer information.

SSA and three of the four companies we contacted set goals to answer every call on the caller’s first attempt. SSA has not been able to reach this goal, although it has increased the percentage of calls answered since establishing the goal. The private sector company officials told us they have been able to answer many calls in 20 to 50 seconds. To provide this level of service during peak periods, both SSA and the companies we contacted used extra employees to answer calls. To keep employees informed about demand, some companies posted statistics during the work shift, such as how long customers are waiting on hold. Officials told us that setting goals was also important in helping to ensure callers would not receive busy signals. They said that keeping employees informed of call site performance also helped to increase productivity.

All of the four private sector companies we contacted had established a performance standard for the number of hours employees were expected to be on the telephone. Three companies also had established a standard for an approximate number of calls to be answered during a work shift. For example, the power company we visited expected its employees to be on the phones 7-1/2 hours of an 8-hour work day and to answer 85 to 105 calls each day. Managers at the airline company we visited said that their representatives were expected to be on the phones 7 hours and 40 minutes of an 8-1/2 hour day and to handle about 80 to 100 calls a day. Private company officials told us these performance standards, when monitored and enforced, can help to increase the number of calls answered, ensure better customer service, and improve call site operations.

All of the organizations we contacted offered standard hours of service that extended beyond a 9-hour work day to provide consistent and convenient service to their customers. Officials of the organizations told us this also helped distribute incoming calls and even out demand throughout the day. SSA provided 12 hours of service, Monday through Friday, from 7 a.m. to 7 p.m. and automated service after hours and on weekends. The private sector companies all provided access to customer service representatives 24 hours a day, 7 days a week.

All of the organizations we contacted had provided their managers sufficient authority to establish and enforce systemwide practices and measures for their call sites. Officials told us this was essential to provide consistent, quality service to all of their customers, regardless of location. For example, the airline and the insurance companies we visited controlled their nationwide operations from one location and had standard performance measures, such as the amount of time representatives were expected to be on the telephone.

Also, officials of all the organizations we contacted said they had invested in telecommunication technology to help customers reach telephone representatives more easily. They said that, in general, technology improvements were less expensive than hiring more staff. Telecommunication technology is used to route calls to available representatives in other time zones, thereby extending hours of operations. To increase calls answered, the organizations used actual and instant data, referred to as real-time data, to route calls to available representatives and provided them with account information. For example, an official of the airline company we visited said it routed calls among its 14 call sites using data that showed where calls were coming from and how many calls each site was answering. Routing calls among its call sites allowed the airline to offer 24-hour service.

IRS Does Not Use Some Management Practices Commonly Used by Other Organizations That Provide Telephone Assistance

IRS does not use some of the management practices commonly used by the organizations we contacted. In those cases where IRS did use a practice similar to those we found in the other organizations, IRS did not apply it with the same emphasis on customers’ needs. For example, IRS has had specific goals for answering more calls for the past 2 years, but these goals were based on the resources IRS had available, not on taxpayers’ demand for service. Also, IRS’ goal for answering calls does not provide National Office program and call site managers with an incentive to answer more calls. IRS has not determined how long its assistors should be on the telephones during a work period. It does not offer standard service hours and before this year had offered only limited assistance beyond a 9-hour work day. IRS has, in fiscal year 1995, for the first time, provided access to its assistors for 10 hours per work day during the filing season. Although this is an improvement, IRS still provides fewer hours of service than SSA and the private sector companies we contacted. Additionally, call sites were inconsistent in how they measured the number of calls they answered and reported how assistors spent their work day. These inconsistencies make it difficult for the National Office to measure and compare call site operations.

Lack of Challenging Goals Has Limited IRS’ Incentive to Answer More Calls

IRS has had a general program goal of providing “consistently prompt” telephone assistance for many years. For the past 2 years, IRS had specific goals for answering more calls, but these goals were based on the resources IRS had available, not on taxpayers’ demand for service. For example, the fiscal year 1995 goal calls for slightly less than a 2-percent increase in calls answered over 1994, but the goal is not based on taxpayer demand for assistance. This is a positive step, but IRS should be moving toward customer-driven goals. IRS officials agree that they want to move more to meeting the needs of customers.

The five organizations we contacted based their goals primarily on their customers’ needs. As discussed later, IRS’ Taxpayer Services Division has requested additional resources but has been unable to obtain them because of higher priorities within IRS and Treasury. We recognize that IRS’ resources are limited and that obtaining increases, even temporarily, may be more difficult for IRS than for private sector companies. However, we believe that continuing to set goals that do not take into account customers’ needs tends to limit the incentive for improvement and may hinder adopting management practices designed to maximize the number of calls answered with the resources available. The process IRS uses to set goals is discussed below.

Each year, IRS’ National Office calculates the number of calls that could be answered nationwide on the basis of the prior year’s productivity and currently available funding. The number is then divided among the regions, and the regions assign or “schedule” the number of calls each district office call site is expected to answer. The number of calls scheduled for each call site thus becomes the call site’s goal for the number of calls to answer.

National Office officials, who do not directly control call site actions, said they have told the regions that scheduled calls should be the minimum, not the maximum, number of calls answered. However, these officials said that the call sites do not have the resources to answer every call.

Each call site’s performance is measured against the number of scheduled calls, but once the goal is met, managers can take assistors off the telephones for other activities, such as training. National Office officials told us that the time assistors spend in training is important. They are concerned that if assistors do not have adequate time for training, the quality of the site’s performance—particularly the accuracy of assistors’ answers to tax law questions—could be reduced.

Although IRS has generally met its total “scheduled” call goal, the number of scheduled calls has been much lower than the number of calls taxpayers have made. For example, IRS’ goal for fiscal year 1994 was to answer 35 million calls. It answered 36 million calls. However, the calls answered represented only 23 percent of the nearly 156 million calls received that year. Thus, the scheduled call goal is not customer-related but is based on IRS’ resources and other internal concerns. Figure 3.1 shows the number of calls IRS has received and the minimum number of calls the National Office has scheduled the sites to answer since fiscal year 1989.

IRS Lacks Uniform Standards for Telephone Assistors

Unlike the organizations we contacted, IRS’ National Office has not established nationwide standards for how long assistors are expected to be on the telephone. While some IRS call sites have independently established standards, the standards are inconsistent and not monitored or enforced at the local or national level. Private sector company officials told us that a standard for the time representatives were expected to be on the telephone (called a sign-on standard) helped to increase the number of calls answered because representatives were on the telephone for a set number of hours.

Four of the six IRS call sites we visited had standards for the time assistors were expected to be on the telephone. These standards ranged from 6 to 7 hours, but many assistors did not meet the standards, as shown in table 3.1. During the 2 weeks we analyzed, the number of assistors meeting the standards ranged from 31 percent to 72 percent at the four locations.

If the four IRS call sites enforced the standards they have, they could answer many more calls than they now do. For example, as shown in table 3.1, if the 4 sites we visited that did have standards had enforced those standards, they could have answered an estimated 442,000 more calls during the 2-week period we analyzed. And, if IRS had standards comparable to those commonly used by the organizations we contacted and required assistors to meet those standards, we believe they could answer substantially more calls.

If IRS decides to institute uniform standards and hold assistors accountable to those standards, it will have to make various trade-offs in deciding how much time assistors should spend answering telephone calls. The work its assistors do is different in important ways from that of the private sector organizations we contacted. For example, IRS assistors spend some time researching and writing letters to taxpayers whose questions have been received over the telephone but, for various reasons, were not answered during the call. Clearly, this is useful work, but IRS concedes that the time spent doing it serves fewer taxpayers than the same amount of time spent on the telephones. Also, because assistors answer tax questions from taxpayers, it is reasonable that assistors receive periodic training to enable them to accurately answer questions. If, as we believe it should, IRS decides to establish a sign-on standard, to develop a meaningful one IRS will have to take these kinds of issues into account when it analyzes the work assistors do. IRS’ plan for implementing its Customer Service Vision includes analyzing how assistors should spend their time.

Information about the amount of time IRS’ assistors now actually spend on the telephone illustrates potential benefits of a sign-on standard. IRS officials agreed that they need to determine the amount of time assistors should be on the telephones, but they said it would have to be negotiated with the union. The president of NTEU told us he was not opposed to establishing a sign-on standard but wanted to research it further.

At the six sites we visited, assistors were on the telephones an average of 5 hours and 28 minutes per day out of an 8-hour day, for the 2 weeks we analyzed, as shown in table 3.2.

Assistors are involved in numerous activities that take them away from the telephone. As shown in figure 3.2, assistors at the six sites we visited spent 68 percent of their time on the telephone. Assistors spent the other 32 percent of their time on various activities, such as researching answers to taxpayers’ questions that have to be written up for an IRS response by letter, reading tax materials, attending training, taking breaks, and attending meetings.

We asked officials at the organizations we contacted about their representatives’ activities when not on the telephone. SSA has a set time of the day during nontelephone hours for meetings and training. Officials at the airline company we contacted told us that representatives spent the time away from the telephone on such things as keeping abreast of frequent flier programs. At the other private sector companies we contacted, representatives spent time attending group meetings, taking training, and taking breaks. The four private companies’ emphasis on answering as many calls as possible is illustrated by the fact that, on average, their representatives were expected to be on the telephones an average of 91 percent of the time.

IRS Recently Established a Nationwide Standard for Call Sites’ Hours of Operations and for Providing Additional Service Hours

IRS call sites’ hours of service were not uniform and varied by the day of week. At the time of our review, the 31 call sites we surveyed had 19 different hours of operation, ranging from 7:30 a.m. to 4:45 p.m. and 9:30 a.m. to 5:00 p.m. Several call sites changed their hours once or twice throughout the week, and one call site had four different hours of operation in the same week. As a result, taxpayers in different parts of the country received different hours and amounts of service.

Additionally, only 4 of the 31 sites offered 9 or more hours of service each day throughout the year. Other sites that provided additional hours to answer more calls said their service was generally limited to extra hours during the week of April 15th and some Saturdays during the filing season. IRS reports showed that assistors were able to answer about 1 million additional calls by providing this limited amount of service beyond normal operating hours.

IRS recently took action that has resulted in providing uniform hours and additional hours of service for taxpayers nationwide, although individual call site hours still vary somewhat. IRS’ National Office decided that its telephone assistance program needed to provide taxpayers more hours of service than currently offered. At the time of our review, call sites provided an average of about 8 hours of service each day. Starting in January 1995, by routing calls among some call sites and extending the hours of others, IRS enabled taxpayers nationwide to call IRS from 7:30 a.m. to 5:30 p.m., which provides an additional 2 hours of service each day for taxpayers. Although IRS is providing taxpayers more hours of service, the other organizations we contacted provided hours of service ranging from 12 to 24 hours per day.

IRS Call Sites Do Not Consistently Report Performance

Inconsistencies among call sites as to how they define and report performance data make it difficult for the National Office to measure site performance and oversee the telephone assistance program. For example, the Nashville call site counted calls received after normal business hours as calls answered, while the Atlanta call site did not.

Call site officials told us that problems in calculating calls answered began in 1992 when IRS began installing its new telecommunication system. The reports from the new system did not provide a total calls answered figure as the previous system did. Call site officials said that this, coupled with the fact that IRS’ National Office had not issued clear and complete guidance, left system analysts at individual call sites to determine what should be recorded as an answered call. For example, the reports listed voice messages left by taxpayers, which were new ways taxpayers could attempt to reach IRS. The call sites were not consistent in whether they counted voice messages in computing calls answered. That is, some sites included voice messages in computing calls answered while others did not. As of February 1995, IRS’ National Office still had not issued additional guidance on what types of calls should be counted as calls answered.

The sites with new telephone equipment also used different terms and definitions for their management information reports, making it difficult, if not impossible, for the National Office to compare sites to determine how they were performing. For example, in Nashville, “idle” time included the time assistors spent working on cases that they could not complete before hanging up with the taxpayer; in Seattle, idle time accounted for breaks, personal time, training, and counseling. Baltimore assistors were discouraged from using idle time, and other sites did not use the term.

Call sites also differed in how they calculated and reported “talk time”—the length of time assistors spend on the telephone talking to a taxpayer—per call. Call site managers’ responses to our questionnaires showed that sites’ average talk time ranged from 2 minutes to 11 minutes. Our six-site analysis showed that some sites have assistors gather information and complete case work after hanging up with the taxpayer. Other call sites require assistors to perform all the work while taxpayers are on-line, making talk time longer.

Call sites also have different instructions as to when and how assistors should sign on and off the telephone systems. For example, assistors in the Atlanta call site were required to sign off each time they were off the telephone. However, in the Seattle call site, assistors only signed off for activities that would take them away from the telephone for more than 20 minutes, such as lunch and training.

National Office officials told us that they were aware of these inconsistencies but had difficulty in ensuring uniformity because each site operated differently. IRS has formed a task team to study some of these issues, as well as to determine best practices for IRS’ new telecommunications system.

IRS Is Behind Organizations We Contacted in Acquiring and Using Technology

All of the organizations we contacted had modern information technology that provided better routing capability than IRS. For example, the airline company we visited had a national network center in which it could view nationwide traffic and route calls on the basis of real-time data to various call sites. Calls were also routed on the basis of time zones and availability of representatives at these sites.

IRS has the capability to route calls among its call sites, but its current technology does not allow it to route calls instantly to any call site as the other organizations can. Acquiring more sophisticated technology would allow IRS to better route calls to serve more taxpayers and extend service hours nationwide. Improved call routing could also result if IRS used its existing routing technology more effectively.

Over the years, IRS has made use of technology to improve its service to taxpayers. In the early 1980s, IRS improved customer service when it developed Tele-Tax, an automated system in which taxpayers can call and listen to selected tax topic tapes 24 hours a day and inquire about the status of their refunds from 7:00 a.m. to 11:30 p.m. More recently, IRS has been working to improve customer service by overcoming the lack of nationwide access to taxpayers’ account information. This has been a major barrier to routing calls among its call sites. Specifically, in February 1995, IRS provided its assistors the ability to access taxpayers’ accounts regardless of where the taxpayers filed their returns. Thus, IRS can now route calls to any call site and an assistor will be able to retrieve any taxpayer’s account file, which will increase taxpayers’ chances of being served. However, because this change is so new, it is not yet clear how many more calls are being answered as a result of the increased account access.

IRS Lacks Technology for Call Routing

To better respond to customer calls, IRS needs the capability to route calls anywhere in the country using real-time information, but it does not currently have the technology to do this. With better routing technology, IRS could determine demand patterns more precisely, such as how demand changes during the day, and better route calls to increase taxpayers’ ability to reach assistors. For example, IRS could see heavy demand in Atlanta in the early morning hours and quickly know which other call site could take more of Atlanta’s calls.

In contrast to IRS, we found that SSA had established an integrated network for its 800-number service. SSA has a central command center at its headquarters in Baltimore in which call traffic is constantly monitored and adjustments made in call routing on the basis of real-time data. During peak periods staff are added to provide additional call answering capability.

While SSA has the benefit of modern, systemwide routing capability, IRS has to route calls from one location to another using cumbersome and time-consuming procedures. Because IRS does not have real-time data, IRS has to route individual call site traffic on the basis of trends in demand over a 3-week period. For example, if the Atlanta call site had a higher percentage of busy signals over a 3-week period than other sites every Monday, the National Office would seek to route all or a percentage of Atlanta’s Monday calls to a less busy site. To illustrate, in March 1994, calls that the Atlanta call site received from 10 percent of all area codes on Mondays and Tuesdays were routed to four other call sites, on the basis of trend data. Atlanta’s traffic would continue to be routed in this manner until the trend indicated a need for change.

Without real-time data IRS’ routing procedures are cumbersome and routing changes may not be done quickly enough to take full advantage of times other call sites could answer calls. For example, if a call site suddenly experiences an increase in demand, it must first pass the rerouting request to its region. The region then notifies National Office staff, who in turn verify the change with the call site. On the basis of the 3-week trend data, the National Office sends the calls to other call sites not thought to be as busy. National office staff manually log the change and enter the change into a terminal. After this process, the change can be operational within 15 minutes to 1 hour later. However, by the time routing changes are made, the increase in calls could have subsided, and many taxpayers who called would have received busy signals or abandoned their calls.

National Office officials have not evaluated the 3-week trend data or individual requests for rerouting to determine if taxpayers have less difficulty getting through. However, they believe that by routing the calls to other sites better able to handle calls, the routing plan has reduced the number of busy signals taxpayers receive at some sites. We tested the results of IRS’ 3-week trend data plan for the period March through May 1994 and found that IRS answered 1.6 percent more taxpayer calls than during the comparable period in 1993.

For the 1995 filing season, the National Office also has begun to track daily calling patterns to help refine the 3-week trend data. The National Office will be using the 3-week trend data and the daily data to identify routing changes needed to increase access. However, Taxpayer Services National Office officials are uncertain that using the daily data will increase access, but they believe that it will.

IRS Has Not Made the Best Use of Its Existing Technology

IRS has missed opportunities to improve routing because it has underutilized the routing features of its new call system, and it has not used its 800 carrier to better route traffic. The capability for real-time call routing is part of IRS’ Customer Service Vision, but this technology is not expected until fiscal year 1997.

IRS’ new automated call distributors, now installed at 19 sites, can send calls to other call sites by type of call and to the site where assistors are available. The equipment can route tax law questions to selected call sites, and then by monitoring traffic to those sites, it can select the one that can answer the call the quickest. If this feature was active at all sites, IRS could answer more calls by taking advantage of the time assistors are available at other sites to take calls.

IRS hoped to have this feature operating in 10 of the 19 call sites by the end of December 1993. However, by February 1994 only three call sites were using the feature, and IRS was having problems making it work. Some of the problems included calls lost when they were sent to other call sites, poor voice quality, limited number of calls sent, and inaccurate reporting of calls that were routed to other sites. National Office officials told us that they suspended work on this feature because they did not have enough staff to follow up on the problems and resolve them, and filing season performance was a higher priority. In January 1995, officials told us that this feature was now working in 12 of the 19 sites that have the new equipment.

IRS’ 800 carrier may be able to route calls for IRS and enable it to answer more calls. According to an IRS Technical Management Division manager, instead of IRS routing calls, its 800 carrier could centrally route calls through its equipment and send calls to predetermined IRS call sites. Accessibility could be increased by using IRS’ 800 carrier to poll the existing network for the next available assistor within the taxpayer’s service center. In February 1995, Taxpayer Services officials told us that they will be meeting soon with their 800 carrier to explore different ways calls could be routed to increase taxpayer accessibility.

IRS Is Working to Improve Access to Nationwide Account Information

IRS has been working to increase assistors’ access to nationwide taxpayer account information. Previously, IRS’ ability to serve taxpayers was hampered because all assistors did not have access to every taxpayer’s account. Call sites typically had access to accounts at only one or two service centers. For example, a taxpayer calling from Florida with a question requiring account information might not have gotten an answer while on-line if the call had been routed to Baltimore, because Baltimore assistors did not have access to account information for taxpayers who filed their returns with the Atlanta Service Center. In such cases, assistors typically wrote down the taxpayer’s question and mailed the question to a call site that had access to the taxpayer’s account. However, resolving these questions required more than double the resources compared to resolving inquiries on-line, and taxpayers may have waited several weeks before receiving answers. According to IRS, more than half the calls it answers involve questions taxpayers have about their accounts.

IRS has now overcome this problem. In 1994, IRS began to address the data access problem by piloting a new system to give five call sites access to taxpayer accounts at three different service centers. Implementation of the new system was slowed by problems in connecting with different service centers. Over the years, IRS’ Service Centers have developed different methods of controlling access to their databases, including different passwords for gaining access. IRS believed that dealing with multiple passwords to allow assistors access to data at more service centers was an administrative burden as well as a potential threat to the security of taxpayer data.

In September 1994, Taxpayer Services officials told us that IRS had resolved its security and password management concerns and was proceeding to implement the pilot access system. And, according to National Office officials, assistors gained the ability to access nationwide data in early 1995. However, National Office officials said that some limits remain on the changes assistors can make to an account. For example, an assistor cannot directly access a taxpayer’s account to stop a collection action. However, the officials said that by March 1995, they plan to expand the changes assistors can make to taxpayers’ accounts.

IRS’ Customer Service Vision Calls for Increased Use of Telephone Assistance

IRS officials said they were aware of the common practices used by other organizations that provide telephone assistance and were aware that they were behind those organizations in adopting such practices. IRS has a plan, called the Customer Service Vision, to improve service to taxpayers and increase the number of calls it answers.

IRS’ Customer Service Vision concept calls for changes in many activities not previously thought of as customer-related. For example, IRS plans to reduce the number of repetitive notices and bills a taxpayer receives. Such changes, together with many others, are expected to reduce the number of contacts taxpayers have with IRS and to make it easier for those contacts to be by telephone, instead of in writing. The concept also calls for changes in traditional service activities, such as the telephone assistance program. IRS plans to have the Vision fully operational by the year 2001.

The Vision calls for a telephone assistance system that is integrated nationwide, in which an assistor located anywhere in the country will answer calls from anywhere else in the country. Such a system would match those that other telephone assistance organizations’ customers enjoy today and should provide the American taxpayer with better service. For example, IRS envisions a system that would provide access to an assistor 16 to 20 hours a day with 100-percent access to either an assistor or one of a variety of ways in which taxpayers can guide themselves through an automated menu to get answers. Thus, improved access to the telephone assistance program is crucial to achieving IRS’ goals for its Customer Service Vision.

IRS’ Vision is based primarily on increased use of the telephone—both in handling incoming taxpayer calls and in having IRS employees use the telephone to call taxpayers—to deal with taxpayers’ problems. IRS recognized that its current capability for answering taxpayers’ calls is not sufficient to support the Vision. Accordingly, IRS plans major changes in the management of its human and technology resources in an effort to be able to accomplish the goal of providing better service to taxpayers through use of the telephone.

A key factor in IRS’ plans to provide better telephone service is to establish 23 Customer Service Sites to handle all contacts with taxpayers that do not require a face-to-face meeting. Work currently done at the 27 taxpayer service call sites, 23 automated collection sites, and 3 forms distribution sites, plus a great deal of correspondence and compliance work now done at the 10 existing service centers, is to be consolidated at the 23 Customer Service sites.

IRS plans to increase taxpayers’ access and provide better service by managing its work load—that is, the incoming calls—as a “corporate asset,” meaning the work load is to be managed on a nationwide basis instead of the current regional or call site basis. To implement this concept, IRS plans to obtain the technology needed by fiscal year 1997 to develop a central command center to prioritize and distribute work among all sites and employees. As calls come in, the command center will identify which employees are on duty, where they are located, and what expertise they have. One of the Vision’s primary goals is to have a qualified employee available at all times to answer calls from anywhere in the country.

Successful implementation of IRS’ Customer Service Vision depends on substantially improved telephone service. Consequently, the problems discussed in this report must be resolved before IRS’ Customer Service Vision can be achieved.

Conclusions

The number of taxpayer assistance calls IRS answered over the past several years has remained relatively constant despite declining resources. However, the number of calls taxpayers make to IRS has increased significantly. As a result, there has been a large and growing gap between the number of calls IRS receives and the number it answers. This gap exists not just during the tax filing season but throughout the year.

We believe more taxpayers could get through to IRS assistors if IRS adopted some of the management practices commonly used by the organizations we contacted to operate their telephone assistance programs. These practices include establishing challenging programwide goals for answering calls based on customers’ needs; operating standards, such as the number of hours employees are expected to be on the telephone; and uniform methods for measuring assistor and call site performance. The organizations we contacted also used modern information technology to facilitate programwide call routing and to provide easy access to customer information. Officials of the organizations we contacted believed the use of these practices enabled them to provide quality service to their customers.

Adopting these practices would not enable IRS to answer every call it receives; however, it should enable IRS to answer more calls than it now does without an increase in staff and set the stage for implementation of IRS’ Customer Service Vision. Achieving this Vision is critical to IRS’ ability to serve more taxpayers in the future. However, IRS’ ability to answer more calls in the short term and to implement its longer term Vision will be hampered unless it can address the fundamental reasons that contributed to its falling behind other organizations in using practices that those organizations believe contribute to their ability to provide quality telephone assistance to their customers. These problems and our recommendations for solving them are discussed in the next chapter.

Management Action Is Needed to Answer More Calls and Lay the Groundwork for IRS’ Customer Service Vision

The management practices that were being commonly used in the telephone assistance programs at the five organizations we contacted—setting challenging goals, establishing systemwide operating standards and uniform performance measures, and applying modern information technology—are not new or innovative in any way. These practices are, in fact, quite basic and are commonly used in managing all types of activities, in both the private and public sectors.

These practices are not a panacea for all of IRS’ problems in answering taxpayers’ calls, but the organizations we contacted used them because the officials responsible for the telephone assistance programs in those organizations believed the practices helped staff to answer customers’ calls and provide high-quality service. Also, as discussed below, IRS has effectively used most of these management practices in increasing the accuracy of assistors’ answers to tax law questions. Why, then, has IRS not applied these practices to the problem of improving taxpayers’ access to its telephone assistance program?

We believe there are two primary reasons. First, IRS’ senior management has not aggressively pursued putting in place the practices that we found to be commonly used by the five organizations to enable them to answer as many calls as possible. We are not certain why this is the case, but concerns about decreasing the accuracy of assistors’ answers to tax law questions by overemphasizing answering calls and lack of support for changes by some field managers seem to have been contributing factors. The few attempts IRS has made to institute such practices were not supported by IRS managers in the field, and IRS’ senior management did not follow through to see that they were implemented.

Second, and closely related to the first reason, is the fact that IRS lacked a strategy for negotiating call site operating practices and standards with NTEU on a nationwide basis. When efforts to establish uniform hours for call site operations were made, a concern of IRS field managers was how—or whether—to deal with NTEU, but there was no strategy to rely on for direction. And, although IRS and NTEU have developed a formal partnership to deal with the many changes IRS is undergoing, IRS still does not have a plan of action for ensuring that nationwide call site operating practices are dealt with in an organized, coordinated, and coherent way, rather than piecemeal. For example, IRS established uniform hours of operations for call sites nationwide and then worked with NTEU at the local level to reach agreement on how the call sites would operate to provide the necessary hours of access to the telephone system. IRS could adopt this same approach in implementing other call site operating practices and standards.

Both of these reasons have hampered IRS’ ability to establish and operate an integrated nationwide telephone assistance program that provides seamless service to taxpayers anywhere in the country. They also lessen the chances that the longer term solutions of the Customer Service Vision will be successfully implemented. Unless these problems are resolved, IRS will have more difficulty achieving its customer service goals for the future.

Funding limitations for additional telephone assistors—although not a reason for the lack of management practices or the absence of a strategy for negotiating with NTEU—have affected the number of calls IRS has been able to answer. IRS officials told us that they believe improvements in the use of technology and changes in cumbersome IRS processes planned as part of IRS’ Customer Service Vision will, in the long run, allow them to answer most taxpayers’ calls. Treasury is also seeking a modest increase in funding for taxpayer assistors in its fiscal year 1996 budget request to Congress. If funded, this request would, however, result in IRS having almost 200 fewer assistors than it had for fiscal year 1994.

IRS’ Top Management Has Not Aggressively Pursued Common Management Practices to Deal With the Accessibility Problem

IRS has made some recent efforts to put in place the kinds of practices we found common in other organizations that provide telephone assistance to their customers. However, IRS’ senior management has reacted to expressions of concern from us and congressional committees about the accessibility problem by emphasizing the longer term solutions promised by various aspects of its Customer Service Vision rather than emphasizing ways to increase the number of calls answered during the several years of transition to the Vision. While the efforts undertaken are worthwhile, IRS’ National Office has not aggressively pursued putting in place the kinds of management practices commonly used by the organizations we contacted that provide telephone assistance, nor has it acquired and used effectively the kind of modern technology used by these organizations.

Control over IRS telephone assistance program is shared among three organizational levels—the National Office, regional offices, and district offices. At the National Office level, the Assistant Commissioner for Taxpayer Services is charged with setting policy for and overseeing the telephone assistance program.

According to the Assistant Commissioner for Taxpayer Services, that position includes sufficient authority—as policymaker—to establish and enforce uniform operating standards and consistent performance measurement techniques. The Assistant Commissioner said that lack of authority was not a problem but that the size and complexity of the Taxpayer Services system, including the telephone assistance program, sometimes made it difficult to effectively exercise and enforce the authority available. In this connection, the Assistant Commissioner noted a recent action to assign a senior executive in each IRS region to provide a stronger linkage between the Assistant Commissioner’s office and the call sites. This step may improve the chances for establishing nationwide standards and measurements for IRS’ telephone assistance program, but previous efforts have not been successful.

For example, during fiscal year 1994, the National Office proposed that all call sites adopt uniform hours of operation. IRS made this proposal to better balance service between the call sites. Calls received after hours in one time zone would be routed to call sites in another time zone. To illustrate, if all call sites closed at 5:00 p.m., taxpayers’ calls originating in the Eastern Time Zone after 5:00 p.m. would be answered by sites in the Central Time Zone that were still open. However, this routing could not occur if the Central Time Zone sites closed at 4:00 p.m., as some sites did during fiscal year 1994.

The National Office did not establish uniform hours because too few sites offered enough hours to accommodate demand. However, IRS’ National Office was unable to establish a nationwide standard that would have increased taxpayers’ access to its telephone assistance program because it was dependent on the call sites to conform their hours of operation with other call sites, and they chose not to do so. IRS continued to work toward establishing a standard for hours of call site operation because IRS officials believe such a standard is vital to creating a nationwide telephone assistance system. As discussed in chapter 3, IRS’ solution for the 1995 tax filing season was to provide uniform hours of service and to offer service for 10 hours each work day.

IRS still does not, however, use most of the management practices that other telephone service organizations we contacted commonly use to enhance their ability to answer as many calls as possible. As discussed in chapter 3, the organizations we contacted exercised sufficient authority over their telephone operations to provide service to as many callers as possible. For example, they established (1) challenging goals for the number of calls to be answered based on customers’ needs, (2) standards for the number of hours employees were expected to spend answering calls and the hours of service that would be provided, and (3) uniform measures of call sites’ performance. Although IRS has established goals for the number of calls to be answered, it has not established other operating standards or uniform performance measures even though it operates call sites throughout the country.

IRS’ Experience in Improving Accuracy Illustrates Benefits of Strong Central Authority in Building Nationwide Program

As part of the telephone assistance program, IRS assistors answer tax law questions called in by taxpayers. IRS struggled for several years with a serious problem in the accuracy of these answers. Finally, in 1990, IRS’ top management focused its attention on the accuracy problem, with the result that accuracy increased from 63 percent in 1989 to 89 percent in 1993. IRS’ effort to improve accuracy provides a model of effective use of central authority for dealing with a problem, not by detailed control of local operations, but by establishing goals, setting standards for operations and measurement, and holding line managers accountable for results.

IRS’ effort to improve accuracy was characterized by strong central leadership, nationwide standards for achieving improvement and measuring it, and accountability for results at all managerial levels. The crucial actions IRS took are outlined below.

The Commissioner of Internal Revenue made improving accuracy a nationwide goal and vigorously supported actions to achieve that goal. IRS developed a standard method to be used by all call sites for guiding assistors in answering taxpayers’ calls. The method required assistors to ask taxpayers a series of questions to make certain that the assistor fully understood the taxpayers’ questions. IRS developed a standard method for measuring whether a question was answered accurately. For scoring purposes, this method took into account whether the assistor took the time to make certain that he or she understood the taxpayer’s question before trying to answer it. IRS included an element for improving accuracy in the performance contracts of its senior executives at all three IRS organizational levels. For example, District Directors, the executives directly responsible for the individual call sites, had specific accuracy goals in their performance expectations.

As noted above, these steps produced major improvement in the accuracy of IRS’ assistors’ answers to tax law questions. Notably, this effort involved aggressive exercise of National Office authority to set and monitor goals, standards, and performance and to provide support. It did not, however, include any significant organizational change or entail National Office management of day-to-day call site operations. We believe a similar approach could contribute to assistors’ ability to answer more taxpayers’ calls.

IRS and NTEU Can Build on New Partnership to Improve Taxpayer Assistance Program

Unlike the private sector organizations that we contacted, many employees of IRS’ telephone assistance program are covered by a negotiated union agreement. Under the terms of this agreement with NTEU, various practices that affect IRS’ telephone assistance program must be negotiated between the two parties. According to both IRS’ National Office officials and an NTEU representative, it is IRS’ responsibility to establish policy, but the union has the right to negotiate how policy will be implemented at the local bargaining unit level. For example, IRS sets the hours for call sites to operate, but the scheduled hours for individual assistors to work are subject to negotiation at the local level.

Which practices must be negotiated locally and which can be negotiated at the national level have not always been clear, according to IRS officials. The reason for this is that IRS has not had a strategy or plan for what issues should be dealt with on a nationwide basis and which can be dealt with locally. The presumed necessity of negotiating at each call site is a factor that has slowed IRS’ efforts to take steps to increase the number of calls it answers. We believe that IRS and NTEU can build on their new partnership arrangement to implement nationwide the kind of management practices other organizations commonly used that will increase IRS’ ability to answer taxpayers’ calls.

IRS Has Lacked a Strategy for Nationwide Negotiation

IRS has not had a strategy or plan of action for ensuring that nationwide call site operating practices are dealt with in an organized, coordinated, and coherent way. In making even minor changes in work force schedules, IRS has had to take into account the potential need to negotiate with union officials at each call site. For example, in 1991 the Taxpayer Services Division considered routing calls during lunch time to sites in other time zones to increase service to taxpayers. Sites where calls were to be routed would no longer take staggered lunches; all assistors at a site would go to lunch at the same time. Taxpayer Services Division asked the call sites to comment about the feasibility of diverting calls from their sites during lunch.

Of the 14 call sites that responded, 8 indicated the change would require discussion with the union. IRS did not discuss this issue with the union because the Taxpayer Services Division never completed its analysis of how traffic would need to be routed.

The example discussed in the first section of this chapter about IRS’ unsuccessful efforts to establish standard hours for call site operations also illustrates IRS’ lack of a strategy for identifying issues that need to be dealt with on the national, rather than the local, level. The Taxpayer Services Division asked the call sites to provide input on the Division’s plan to expand standard hours of service nationwide during the 1994 filing season. The Division would have expanded service by routing calls to different sites in other time zones and extending the hours of some call sites.

IRS’ seven regions commented that expanding the hours could raise union concerns, especially if two shifts were expected at some call sites. One region wrote that changing hours was a costly issue due to NTEU negotiations. Another region wrote that changing hours “has significant labor relations implications,” and that if a uniform agreement could not be reached at the national level, local negotiations could take a long time. The plan was not implemented for the 1994 filing season. Rather than pursue changing local call site hours, the Taxpayer Services Division looked at the number of call sites with later hours, but it found that too few sites were open late enough to handle rerouted traffic.

For the 1995 filing season, IRS has begun to offer expanded hours of service. The expanded service is being provided by routing calls among the call sites, together with short increases in the time several call sites are open. For example, the three call sites in the Southeast Region now provide 10 hours of service. Taxpayer Services officials at the National Office told us that they had discussed the need for expanded hours with NTEU’s national office officials. NTEU decided that the specifics of how the changes were to be implemented should be worked out with IRS officials at the local level rather than at the national level. National Office officials told us there were no serious problems in getting this done.

Taxpayer Services officials at the National Office told us they expected regional offices to extend hours at the call sites for the 1995 filing season because the National Office was more forceful in its efforts to change hours than it had been in previous attempts. Providing an increase in the hours telephone assistance is available is a worthwhile accomplishment, and we commend IRS for achieving this. However, the time it took illustrates the need for IRS’ top management to assert itself and to develop a way to work toward agreement on more than one change at a time with NTEU.

IRS and NTEU Can Build on Their Existing Partnership to Reach Agreement on Nationwide Issues

In May 1994, as a result of a long-term effort, IRS and NTEU agreed to a partnership arrangement designed to give the union a stronger role in IRS’ organizational and policy issues. Working in the context of this partnership, in August 1994, IRS and NTEU signed a Memorandum of Understanding related to implementing the Customer Service Vision, including the telephone assistance program. Unfortunately, the Memorandum does not deal with the issues discussed in this report. The Memorandum could, however, provide a readily available framework for IRS to use when it begins to work on these issues on a nationwide basis.

We believe an effective partnership between IRS and NTEU is critical to the fulfillment of the Customer Service Vision. In the past, the telephone assistance program has been hampered by the need to negotiate issues on a site-by-site basis that affect the entire system and, in our opinion, should be dealt with on a nationwide basis. The need to negotiate some matters locally will continue, and local input can and usually should be obtained in connection with negotiating national issues. However, we believe that IRS and NTEU could use the framework established by the August 1994 Memorandum of Understanding to work toward a situation in which IRS and NTEU can agree on operating practices and standards for performance measurement that would enable IRS to operate a telephone assistance program that provides consistent, high-quality service to as many taxpayers as possible throughout the country.

Funding Limitation for Staff Has Been a Problem

For the past several years, Taxpayer Services has asked IRS and Treasury to request additional funds to hire more assistors to answer more taxpayer calls. These requests have not been included in the budget that went to Congress; consequently, additional funding has not been provided. The additional funds would have allowed IRS to answer more calls than it now does but not nearly all of the calls it receives. While funding for additional staff was not received, IRS received funds to continue to plan for and buy upgraded telephone equipment for call sites. IRS is looking to the Customer Service Vision and the changes it will bring about to enable IRS to answer more taxpayers’ calls.

For fiscal year 1994, Taxpayer Services asked for 649 additional Full Time Equivalents (FTEs) to answer about 4 million more calls in 1994. IRS reduced the request to 356 FTEs, but Treasury denied it. For fiscal year 1995, Taxpayer Services asked for 236 additional FTEs to answer about 1 million more calls over the 1994 level. IRS agreed with the request, but Treasury denied it. IRS officials told us that in both years the requests for additional funds were denied because other needs, such as efforts to improve compliance, were judged to have higher priority in preparing Treasury’s portion of the President’s budget. Meanwhile, there were about 156 million calls for telephone assistance in fiscal year 1994. IRS expects even more calls during fiscal year 1995.

For fiscal year 1996, Treasury included in its budget submission to Congress a request to fund a 226 FTE increase in taxpayer service assistors. Although the increase in assistors, if funded, will aid in answering more calls, it represents an overall decrease of 193 FTEs when compared to the number of assistors available for fiscal year 1994. Currently, IRS’ budget contains funds to answer only 52 percent of the taxpayers who call.

Taxpayer Services officials told us their strategy is to use resources other than staff in trying to improve taxpayers’ access to the telephone assistance program. Taxpayer Services officials told us that they intend to continue setting annual goals for increasing the number of calls answered, based primarily on the installation of new telephone equipment. IRS has purchased and installed automated telephone switching equipment at 19 call sites during the past 2 years. IRS has reported productivity improvement of about 10 percent at the sites with the new equipment, in part because the equipment frees some assistors from answering and routing calls manually. IRS plans similar purchases for the remaining call sites over the next few years and is working to develop more ways for taxpayers to get answers to their questions on the telephone automatically, without speaking to an assistor. IRS hopes to eventually handle as much as 45 percent of its total call workload in this way.

Conclusions

IRS’ telephone assistance program operates in 27 different sites around the country, but it does not yet operate as a fully integrated nationwide program. Operating practices vary among the 27 call sites. Each site has a great deal of autonomy to set its own standards and measures. This is illustrated by the 19 different combinations of operating hours among the call sites we surveyed, although this problem has been corrected. More importantly, IRS top management has not exercised its authority to establish and enforce policies necessary to create an integrated, nationwide telephone assistance program that can efficiently use the resources available to answer as many taxpayers’ calls as possible. The lack of uniform systemwide policies and the tendency for IRS and NTEU to negotiate call site practices at the local level have resulted in call site autonomy to a degree that we believe is incompatible with the kind of sophisticated telephone assistance system IRS envisions for the future.

These problems must be overcome if IRS is to improve the service it provides taxpayers during the transition to its Customer Service Vision and if IRS is to achieve its vision of improved customer service. The Customer Service Vision calls for a telephone assistance system that is integrated nationwide, in which an assistor located anywhere in the country will answer calls from anywhere else in the country. Such a system would match those that other telephone assistance organizations’ customers enjoy today and should provide the American taxpayer with better service.

To improve taxpayers’ access to the telephone assistance system, we believe that IRS could draw upon its experience in improving the accuracy of assistors’ answers to tax law questions. That effort, characterized by strong top management support, challenging nationwide goals, clear-cut performance measures, and accountability from top to bottom, has resulted in major improvement in accuracy test scores. We see no reason why IRS cannot apply the same management principles to increasing the number of taxpayer calls that IRS answers.

IRS’ National Office will have to exercise its authority to establish and enforce the policies necessary to build an effective nationwide telephone assistance program. A critical part of this effort will be to take advantage of its partnership with NTEU to develop a way to agree on nationwide operating practices and performance measurement standards that would enable IRS to answer as many calls as possible. Answering more calls now and in the future also requires that IRS make better use of the information technology it has today.

IRS officials directly responsible for the telephone assistance program have requested additional funding for staff in recent years, but those requests have not been approved by senior IRS or Treasury Department officials because those officials placed higher priority on other needs. While it is clear that more funds would enable IRS to provide more service, we also believe that better management of existing resources will enable IRS to answer more calls than it now does. Consequently, our recommendations are focused on maximizing service with existing resources.

Recommendations

We recommend that the Commissioner of Internal Revenue direct the Chief, Taxpayer Services, in coordination with other appropriate IRS officials, to lead an aggressive effort to (1) identify and define the appropriate telephone assistance program operating practices for IRS that would allow it to optimize the number of calls it can answer within current budget constraints and (2) work with the leadership of NTEU to reach agreement on implementing those practices on a nationwide basis. Those practices should include, although not be limited to, the following: challenging program goals for increasing the number of calls answered that are based, at least in part, on taxpayers’ needs; standards for the amount of time assistors should be available to answer hours of operation that offer taxpayers greater opportunity to reach IRS uniform reporting definitions for the number of calls answered and other performance measures.

We also recommend that the Commissioner of Internal Revenue direct the Chief, Taxpayer Services, to quickly take the steps necessary to effectively route taxpayers’ calls nationwide using real-time information. These steps may include a combination of (1) acquiring technology for real-time traffic monitoring and management, (2) utilizing the routing capability of IRS’ telecommunications vendor, and (3) fully implementing the features of IRS’ existing call routing technology.

Agency Comments and Our Evaluation

IRS’ Assistant Commissioner for Taxpayer Services provided written comments on a draft of this report in a February 24, 1995, memorandum. The Assistant Commissioner’s memorandum is included as appendix I. We also met with senior Taxpayer Services officials on February 16 and 23, 1995, to obtain oral comments from them on the draft report. The Assistant Commissioner attended the February 23 meeting. We have incorporated comments from the meetings and the Assistant Commissioner’s memorandum in this report where appropriate. Our evaluation of IRS’ comments focuses on the Assistant Commissioner’s memorandum since it and the oral comments provided by IRS officials were generally consistent.

We present our evaluation of IRS’ comments in two sections. The first section addresses what we believe to be the most significant of IRS’ specific comments. The second section discusses our interpretation of the overall message of IRS’ comments and compares IRS’ and GAO’s differing perspectives on the problem of answering more taxpayers’ calls.

Evaluation of IRS’ Specific Comments

The Assistant Commissioner’s written comments said that our draft report did not present a balanced view of IRS’ telephone assistance program because it did not recognize many steps IRS had already taken that were consistent with industry best practices. The Assistant Commissioner’s memorandum included a list of such practices. The Assistant Commissioner also said that our report did not focus on IRS’ new approach to improving service to the public—IRS’ Customer Service Vision—and assess whether IRS was moving far enough soon enough to accomplish that Vision. And, the Assistant Commissioner said that while IRS agreed that our recommendations would help in improving current processes, she believed the draft report emphasized systems and procedures that are already being replaced as part of IRS’ effort to achieve its Customer Service Vision.

To address IRS officials’ concern that our draft report did not present a balanced view of actions that had been taken, we added information provided by IRS to update our discussions of some of the steps IRS had taken. However, as discussed below, we are not convinced that some of the practices cited by IRS are operating in a way that is consistent with industry best practices. And, IRS has not yet put in place many of the practices we found to be commonly used by the organizations we contacted.

We agree that the practices and other activities cited in the Assistant Commissioner’s memorandum demonstrate improvement in IRS’ capability to serve taxpayers and progress toward implementing its Customer Service Vision. A comparison of the practices and technology IRS uses in the telephone assistance program today with the practices and technology it used just a few years ago shows that IRS has made substantial progress. However, such a comparison also shows that IRS remains behind the organizations we contacted in its use of such practices and technology.

For example, in fiscal year 1995, for the first time, IRS said it is providing taxpayers with 10 hours a day of access to its telephone assistors, compared with the traditional 8 hours offered for many years. The added hours of service give taxpayers a better chance of getting their questions answered, but SSA provides 12 hours per day of access to an assistor and the four private companies we contacted routinely provide access to a customer service representative 24 hours a day.

A similar comparison of IRS’ use of technology to route calls today compared with a few years ago shows that IRS has made considerable progress in this area also but remains behind the other organizations we contacted, even though IRS said it had implemented best practices identified in other organizations. From essentially no capability to route calls a few years ago, IRS now can route calls anywhere in the country, but it does so using a cumbersome and slow process, thus limiting the efficiency—and benefit to taxpayers—of a centrally controlled, real-time routing system. Again, SSA and three of the four private companies we contacted have centrally controlled real-time routing systems that allow them to instantly route calls to locations where customer service representatives are available.

Similar comparisons could be made with most of the other items cited in the Assistant Commissioner’s memorandum. In addition, the items cited do not include (1) the use of more challenging goals for answering calls, (2) setting standards for the amount of time assistors should be on the telephone, and (3) establishing uniform performance measures for systemwide use because IRS has not yet put such practices in place.

The Assistant Commissioner’s comment that our draft report did not include an assessment of IRS’ progress toward its Customer Service Vision is correct, as that was not the purpose of this study. The Assistant Commissioner’s third point—that our report focused too much on current practices—also is related to the purpose of our study in contrast with the thrust of IRS’ comments. That is, IRS’ comments emphasize its plans for and progress toward achieving its Customer Service Vision.

The purpose of our study was to identify steps IRS could take that might enable it to answer more taxpayers’ calls with its existing staff in the period between now and 2001, the current target for completing the many changes called for by the Vision. The current level of service, as well as the many changes that must take place before the Customer Service Vision is realized, demands that IRS maximize the number of calls it can answer now while pursuing its Customer Service Vision. Thus, we focused on IRS’ current practices rather than its plans, although we recognized that any actions we recommended needed to be compatible with the Customer Service Vision. Accordingly, our study included collecting information about IRS’ goals for its Customer Service Vision and the steps planned for implementing it. That information is included in our report, but IRS’ plans for or progress toward implementing its Vision were not the focus of our work.

Evaluation of IRS’ Comments in Terms of Differences Between IRS and GAO in Dealing With the Accessibility Issue

The difference between IRS and GAO in dealing with the accessibility issue is primarily one of timing, based on differing perceptions of the problem. IRS sees the solution to the accessibility problem through the implementation of its Customer Service Vision, a complex and lengthy process, currently planned for full implementation in 2001. We believe the problem needs aggressive action immediately.

Taken as a whole, as we understand them, IRS’ comments indicate that achieving the goals of its Customer Service Vision will solve the accessibility problem. Therefore, as noted above, the comments emphasize the steps taken toward implementing the Vision. Although not mentioned in the written comments, a principal goal for the Vision is, with minor exceptions, to provide access to the telephone system for 100 percent of the callers. Thus, if that goal is achieved the problem would in fact be solved.

IRS’ plan for achieving its Customer Service Vision goal of 100-percent access to the telephone system includes developing and installing new information technology, moving thousands of IRS’ employees from their current jobs and training them to be telephone assistors, and shifting much work now done by correspondence to the telephone. Achieving the 100-percent goal is also dependent on the success of yet-to-be-acquired information technology and major changes in areas of IRS work other than customer service. The plan to achieve this and the other Customer Service Vision goals necessarily spans several years. The plan assumes incremental improvement in answering calls each year. The current target for full implementation is 2001, 6 years away.

We applaud IRS’ long-range objectives, but, in our view, the accessibility problem needs immediate and aggressive action. In chapter 2, we included information based on IRS’ method for estimating the “level of service” it provides to taxpayers through the telephone assistance program. For fiscal year 1994, IRS estimated that 67 million taxpayers called for assistance and about 36 million of those calls were answered, an assistance rate of 54 percent. To the extent IRS estimates are accurate, what that means is that approximately 31 million taxpayers who called for assistance did not get it because they could not get through to an assistor. Because millions of taxpayers who need help are not able to get it, we believe IRS should do everything feasible to answer more taxpayers’ calls as soon as it can.

In the long term, IRS proposes to close the gap between calls received and calls answered by implementing its Customer Service Vision. However, this vision is not expected to be fully operational until 2001. While we agree that the Customer Service Vision should help IRS answer more calls, we believe that implementing our recommendations could help IRS answer more calls in the short run as well as put IRS in a better position to implement its Vision.

In our meetings with IRS senior officials, they noted that their efforts to answer more calls had been constrained by staff limitations. In fact, they said that the number of assistors had declined over the past few years. The IRS officials pointed out that funds available for fiscal year 1995 would allow IRS to assist only 52 percent of the taxpayers they expected would call throughout the year.

We recognized the issue of funding for assistors in our draft report, pointing out that although Taxpayer Services had requested additional funding for fiscal years 1994 and 1995, IRS and Treasury decided not to include the requests in the President’s Budget. A modest increase in funding for assistors is included in the President’s Budget for fiscal year 1996. However, if Congress decides to provide the increased funding, it will leave IRS with almost 200 fewer assistors than were available in Fiscal Year 1994.

IRS officials told us that their long-term strategy was to use technology—primarily in the form of developing more ways for taxpayers to get answers for themselves through automated systems—in lieu of more assistors.