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. 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. 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.