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TIGTA Report 2021-46-029 — Assessment of COVID-19 Pandemic Effects on IRS Customer Service Operations
Record facts
| Court | Treasury Inspector General for Tax Administration (TIGTA) |
|---|---|
| Filed | 2021-04-22 |
Summary
A final audit report of the Treasury Inspector General for Tax Administration, Report Number 2021-46-029, issued April 22, 2021, on the effects of the coronavirus pandemic on IRS customer service. It is a memorandum from Michael E. McKenney, Deputy Inspector General for Audit, to the Commissioner of Internal Revenue, Audit # 202040635. The report finds that as of March 31, 2020 the IRS had shut down 81 of its 87 toll-free telephone lines and closed all 358 Taxpayer Assistance Centers, 95 of which remained closed as of November 16, 2020. It reports a 51.1 percent Level of Service as of September 25, 2020 with an average speed of answer of 18 minutes, and nearly 24.6 million calls to a dedicated Economic Impact Payment line as of November 28, 2020. It also assesses the strategy required by the Taxpayer First Act and makes four recommendations, three of which IRS management agreed with.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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Assessment of the Effects of the Coronavirus
Pandemic on Customer Service Operations
April 22, 2021
Report Number: 2021-46-029
This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined
to be restricted from public release has been redacted from this document.
TIGTACommunications@tigta.treas.gov | www.treasury.gov/tigta
TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
HIGHLIGHTS: Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Final Audit Report issued on April 22, 2021
Report Number 2021-46-029
Why TIGTA Did This Audit
This audit was initiated to
provide selected information
related to the impact of the
Coronavirus Disease 2019
(COVID-19) on the IRS’s
Customer Service operations.
The overall objective of this
review was to assess the
impact of COVID-19 on IRS
customer service operations
and evaluate the development
of the IRS’s comprehensive
customer service strategy.
Impact on Taxpayers
The IRS took unprecedented
and drastic actions in response
to the COVID-19 pandemic to
protect the health and safety
of its employees and taxpayers
during the 2020 Filing Season.
These actions included closing
most customer service
channels available to
taxpayers. As such, the IRS’s
ability to provide service to
taxpayers and other
stakeholders seeking
assistance from the IRS was
significantly hampered and
limited.
In addition, the Taxpayer First
Act, enacted on July 1, 2019,
required the IRS to develop a
comprehensive customer
service strategy. The IRS was
required to provide this
strategy to Congress by
July 1, 2020. The IRS informed
Congress that due to the
intense focus and shift in
resources in response to
COVID-19, the strategy would
not be delivered to Congress
until December 2020. The IRS
delivered the strategy on
January 11, 2021.
What TIGTA Found
In an effort to restore service to taxpayers as quickly as possible, the IRS
accelerated the implementation of several customer service options it
had been testing and expanded the use of existing technologies and
capabilities. However, the IRS’s ability to assist taxpayers continues to be
affected by COVID-19.
As of March 31, 2020, the IRS shutdown 81 (93 percent) of its 87 toll-free
telephone lines because all call center locations were closed. The IRS had
reopened 78 of the 81 toll-free telephone lines as of September 30, 2020,
and all but one of the previously closed lines were open as of
November 5, 2020. The IRS reported a 51.1 percent Level of Service as of
September 25, 2020, with an average speed of answer of 18 minutes.
The IRS worked with a third-party contractor to establish a dedicated toll-
free telephone line to assist taxpayers with general questions about their
Economic Impact Payment. As of November 28, 2020, this line received
nearly 24.6 million calls. The IRS also established a dedicated e-mail
address to receive Economic Impact Payment inquiries from
congressional staffers. The IRS estimates it received 127,050 inquiries to
this electronic mailbox as of November 27, 2020.
The IRS closed all 358 Taxpayer Assistance Centers (TAC) in March 2020.
As of November 16, 2020, 95 of the TACs remained closed due to staffing
issues, many of which were related to COVID-19. The IRS is limiting the
services it provides at its TACs to reduce the risk of exposure to
COVID-19 for its employees and taxpayers. The IRS is testing a virtual
service option that will enable it to provide virtual face-to-face assistance
to taxpayers from anywhere. However, continued expansion of the test is
needed to provide taxpayers better access to face-to-face assistance.
As of March 31, 2020, there was a 91.1 percent decrease in the number of
open volunteer tax preparation sites compared to Fiscal Year 2019.
TIGTA’s analysis of taxpayers who used volunteer preparation services to
file a Tax Year 2018 return in Calendar Year 2019 identified that 555,689
of the taxpayers had not filed a Tax Year 2019 return as of
October 22, 2020. As of February 15, 2021, the IRS reports 8,369 sites
were opened or planned to open, which is significantly fewer than the
prior year.
Finally, our assessment of the IRS’s comprehensive customer service
strategy found that the strategy met the legislative requirements of the
Taxpayer First Act, with the exception of the reporting date to Congress.
What TIGTA Recommended
TIGTA made four recommendations to the IRS to further improve its
ability to assist taxpayers during the 2021 Filing Season.
IRS management agreed with three of the four recommendations.
Management indicated that they do not plan to offer tax return
preparation services at TACs during the 2021 Filing Season, as most
taxpayers seek assistance from other sources.
U.S. DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
April 22, 2021
MEMORANDUM FOR: COMMISSIONER OF INTERNAL REVENUE
FROM:
Michael E. McKenney
Deputy Inspector General for Audit
SUBJECT:
Final Audit Report – Assessment of the Effects of the Coronavirus
Pandemic on Customer Service Operations (Audit # 202040635)
This report presents the results of our review to assess the impact of the COVID-19 pandemic on
Internal Revenue Service (IRS) customer service operations and evaluate the development of the
IRS’s comprehensive customer service strategy. This review was part of our Fiscal Year 2020
discretionary audit coverage and addresses the major management and performance challenge
of Addressing Emerging Threats to Tax Administration.
Management’s complete response to the draft report is included as Appendix III.
Copies of this report are also being sent to the IRS managers affected by the report
recommendations. If you have any questions, please contact me or Russell P. Martin, Assistant
Inspector General for Audit (Returns Processing and Account Services).
Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Table of Contents
Background .....................................................................................................................................Page 1
Results of Review .......................................................................................................................Page 3
Toll-Free Telephone Service .............................................................................................Page 8
Face-to-Face Assistance ....................................................................................................Page 13
Recommendation 1: ...................................................................Page 20
Recommendations 2 and 3: .....................................................Page 21
Recommendation 4: ...................................................................Page 22
Taxpayer Correspondence and Products .................................................................... Page 22
A Comprehensive Customer Service Strategy Was
Developed As Required by the Taxpayer First Act ................................................. Page 25
Appendices
Appendix I – Detailed Objective, Scope, and Methodology ................................Page 31
Appendix II – Treasury Inspector General for Tax Administration
Reports – Cost Increases and Delays in the IRS’s Implementation of
Complex Strategies .............................................................................................................Page 33
Appendix III – Management’s Response to the Draft Report .............................Page 35
Appendix IV – Glossary of Terms ...................................................................................Page. 44
Appendix V – Abbreviations............................................................................................ Page 46
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Background
In response to the Coronavirus Disease 2019 (COVID-19) pandemic, the Internal Revenue Service
(IRS) took unprecedented and drastic actions to protect the health and safety of its employees
and taxpayers during the 2020 Filing Season.1 These actions included closing most customer
service channels with the exception of services offered online through IRS.gov. For example, the
following key IRS customer service channels were closed in response to the pandemic:
•
Toll-Free Telephone Service – The IRS offers 87 toll-free telephone lines that taxpayers
can use to contact the IRS.2 Services provided by assistors on these lines include
answering tax law and tax account questions, requesting tax account transcripts, and
setting up appointments for face-to-face assistance.
•
Face-to-Face Assistance – The IRS provides face-to-face assistance to taxpayers in
person at 358 Taxpayer Assistance Centers (TAC), which include six co-located sites in
Social Security Administration (SSA) offices.3 In addition, there are 30 Virtual Service
Delivery (VSD) sites. Taxpayers generally must schedule an appointment to meet with an
IRS assistor face-to-face. Additional face-to-face assistance is offered via the IRS’s
Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE)
programs. These sites assist qualifying taxpayers with free return preparation services.
Generally, qualifying taxpayers are those who make $56,000 or less, persons with
disabilities, limited English-speaking taxpayers, or those age 60 or older.
•
Addressing/Resolving Taxpayer Correspondence – The IRS addresses or responds to
written communications from a taxpayer or taxpayer’s representative (e.g., requests for
information, responses to notices and letters). This is typically handled by the IRS’s
Accounts Management function.
•
Printing and Mailing Correspondence to Taxpayers – The IRS prints and mails the
majority of the correspondence it sends to taxpayers from two centralized sites located
in Detroit, Michigan, and Ogden, Utah. These operations are referred to as
Correspondence Production Services (CPS). Correspondence generated and mailed to
taxpayers includes notices to alert taxpayers of error conditions identified during
processing, the need to authenticate their return as it has been held as potentially
fraudulent, as well as notices and letters required to be issued by law.
1 See Appendix IV for a glossary of terms.
2 The IRS operates 100 toll-free telephone lines, 87 of which were available to taxpayers for use in contacting the IRS
as of March 25, 2020. On June 30, 2020, we reported [Treasury Inspector General for Tax Administration, Ref.
No. 2020-46-041, Interim Results of the 2020 Filing Season: Effect of COVID-19 Shutdown on Tax Processing and
Customer Service Operations and Assessment of Efforts to Implement Legislative Provisions (June 2020)] that
according to the IRS, it had 105 taxpayer facing toll-free telephone lines. The IRS subsequently stated that it operated
only 87 taxpayer facing toll-free telephone lines as of March 25, 2020.
3 The IRS places employees at SSA offices. Services are limited at these locations. For example, no cash payments are
accepted and there are no Individual Taxpayer Identification Number authentication services.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
•
Distribution of Tax Products – The IRS’s National Distribution Center (NDC) provides
printing and distribution services of IRS forms, publications, etc. for both the IRS and
external stakeholders. Figure 1 provides a list of NDC stakeholders.
Figure 1: Primary Users of NDC Services
User
Description of Supplies Provided
Taxpayer
Supplies individuals with tax-related materials for personal use.
Tax Professional
A person or firm that prepares tax returns for compensation or orders
products to meet tax reporting requirements.
Tax Forms Outlet
Program
Supplies post offices, libraries, and other outlets with tax materials for
distribution to the public.
TAC
Supplies TACs with products for distribution to the public.
VITA
Supplies VITA sites with tax training products, instructions, and
publications.
International Program
Supplies American embassies with tax forms to meet the needs of
Americans overseas.
Employer
Supplies businesses with employment tax products for employee and
company use.
IRS
Supplies packages of tax products for conferences administered by
IRS employees, etc.
Other Government
Agencies
Supplies other Federal, State, and local agencies with tax materials to
act as a third-party distributor or meet its tax reporting requirements.
Source: Internal Revenue Manual 1.18.5.
Development of required comprehensive customer service strategy
The Taxpayer First Act (TFA or the Act),4 enacted on July 1, 2019, requires the IRS to develop
three customer-focused strategies – a comprehensive customer service strategy, a plan to
modernize the IRS’s organizational structure, and a comprehensive training plan for IRS
employees. The Act requires the customer service strategy (referred to by the IRS as the
Taxpayer Experience Strategy) to include:
•
A plan to provide secure assistance to taxpayers that meets reasonable expectations and
adopts appropriate best practices of customer service.
•
A thorough assessment of the services the IRS can co-locate with other Federal services
or offer as self-service options.
•
Proposals for improved customer service in the short term (current and following fiscal
year), medium term (approximately three to five fiscal years), and long term
(approximately 10 fiscal years).
•
Plans to update guidance and training material for customer service employees.
•
Metrics and benchmarks to quantitatively measure progress.
4 Pub. L. No. 116-25, 133 Stat. 981 (2019).
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
The IRS was required to provide the Taxpayer Experience Strategy to Congress by July 1, 2020.
On April 17, 2020, the IRS informed Congress that due to its intense focus and shift in resources
in response to COVID-19, the IRS planned to submit the Taxpayer Experience Strategy to
Congress in December 2020. The IRS delivered the Strategy to Congress on January 11, 2021.
Results of Review
This report presents the results of our continued assessment of the IRS’s response to the
COVID-19 pandemic, including the IRS’s requirement to develop a comprehensive customer
service strategy. The information is provided as of the date in which our audit testing was
completed. If we were able to get more updated information prior to the issuance of our report,
we noted this and added the most up-to-date information. We plan to continue to assess the
IRS’s ability to provide quality customer service and will include additional updated results as
part of our reporting on the 2021 Filing Season.
In response to the pandemic and State and local restrictions, the IRS began closing its Tax
Processing Centers, Campus Support sites, Call Centers, TACs, and other offices nationwide. The
IRS directed its employees to evacuate their work sites, and those who were approved to
telework started working from home (or an alternate location). Employees who were not yet
approved but were able to telework were encouraged to complete training, sign agreements,
and obtain the necessary equipment to enable teleworking. Remaining employees were put on
weather and safety leave. As such, the IRS’s ability to provide service to taxpayers and other
stakeholders seeking assistance from the IRS was significantly hampered and limited. Figure 2
shows a timeline of events that affected key IRS customer service operations during the
2020 Filing Season.
Figure 2: Timeline of Events Affecting IRS Customer Service Operations
Date
Event
March 13, 2020
The President issued a National Emergency declaration, and
the IRS Commissioner instructed IRS leadership to begin
maximizing telework for eligible employees Service-wide,
expanding leave flexibility for employees, reducing in-person
contacts, and implementing travel restrictions.
March 20, 2020
The IRS closed its Tax Processing Center5 in Fresno, California,
and Campus Support Site6 in Philadelphia, Pennsylvania, due
to State and local restrictions. These locations are responsible
for processing tax returns and incoming correspondence from
taxpayers. The IRS continued to shut down these locations
through April 6, 2020.
The IRS also closed all TACs.
March 21, 2020
The IRS closed the NDC in Bloomington, Illinois.
5 The IRS has four Tax Processing Centers in Fresno, California; Kansas City, Missouri; Austin, Texas; and Ogden, Utah.
6 The IRS has six Campus Support sites in Chamblee, Georgia; Florence, Kentucky; Andover, Massachusetts;
Holtsville, New York; Philadelphia, Pennsylvania; and Memphis, Tennessee.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Date
Event
March 25, 2020
The IRS closed its Tax Processing Centers in
Kansas City, Missouri, and Austin, Texas. In addition, as of this
date, the IRS had closed 20 of its 25 toll-free telephone call
sites. As a result, the IRS stopped taking calls on 78 of its
87 toll-free telephone lines. The IRS closed its CPS site in
Detroit, Michigan.
March 27, 2020
The President signed the Coronavirus Aid, Relief, and
Economic Security Act,7 which includes a refundable tax credit
for Tax Year 2020 of up to $1,200 for qualified individuals
($2,400 for married couples). The IRS was required to make
advance payments of the credit by December 31, 2020.
March 30, 2020
The IRS closed its sixth and final Campus Support Site in
Atlanta, Georgia.
March 31, 2020
The IRS opened a toll-free telephone COVID-19 hotline to
contact the Office of Counsel. The IRS subsequently opened
two additional toll-free telephone lines to answer questions
regarding the Economic Impact Payment (EIP) and the
Form 7200, Advance Payment of Employer Credits Due to
COVID-19.
There were 820 open VITA and TCE sites. This was a
91.1 percent decrease compared to a similar period in Fiscal
Year 2019.
April 6, 2020
The IRS closed its fourth and final Tax Processing Center in
Ogden, Utah. As of this date, all toll-free telephone call sites
were closed.
April 8, 2020
The IRS closed its CPS site in Ogden, Utah, halting the mailing
of notices.
April 30, 2020
As of this date, the IRS had 19 toll-free telephone lines open.
June 1, 2020
The IRS began to reopen offices in Kentucky, Texas, and Utah
in accordance with State and local guidelines.8 This included
the:
•
Tax Processing Centers in Austin, Texas, and Ogden,
Utah.
•
Campus Support Site in Florence, Kentucky.
•
CPS site in Ogden, Utah.
June 15, 2020
The IRS reopened offices in Georgia, Michigan, Missouri, and
Tennessee in accordance with State and local guidelines. This
included the:
•
Campus Support sites in Chamblee, Georgia, and
Memphis, Tennessee.
•
CPS location in Detroit, Michigan.
•
Tax Processing Center in Kansas City, Missouri.
7 Pub. L. No. 116-136 (2020).
8 The IRS did not reopen any TACs to the public in these locations.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Date
Event
June 18, 2020
As of this date, nine toll-free telephone call sites and 62 of the
90 (87 original lines plus three additional lines) toll-free
telephone lines were open. The remaining 16 call sites and
28 toll-free telephone lines remained closed.
June 29, 2020
The IRS reopened offices in California, Indiana, Ohio, Oregon,
and Puerto Rico in accordance with State and local guidelines.
This included the Tax Processing Center in Fresno, California.
The IRS reopened TACs in Georgia, Kentucky, Michigan,
Missouri, Tennessee, Texas, and Utah with limited services by
appointment only. Of the 358 TACs, 326 remained closed.
July 13, 2020
The IRS reopened the NDC, the remaining 16 toll-free
telephone call sites, and the remaining three Campus Support
sites in Andover, Massachusetts; Holtsville, New York; and
Philadelphia, Pennsylvania.
July 18, 2020
As of this date, the IRS cleared the CPS backlog of outgoing
notices, letters, etc., that were not processed while CPS sites
were closed.
July 27, 2020
The IRS reopened 212 of the 358 TACs.
September 30, 2020
As of this date, 121 of the 358 TACs and three of the
90 toll-free telephone lines remained closed. In addition,
171 volunteer tax preparation sites operated by IRS partners
were open. This was a 35.2 percent decrease when compared
to a similar period in Fiscal Year 2019.
November 5, 2020
As of this date, the IRS had reopened 80 of the 81 previously
closed toll-free telephone lines. IRS management had no plans
to reopen the remaining line, as this line was inadvertently kept
open for the Making Work Pay Credit, which was no longer
available after Tax Year 2010.
November 16, 2020
As of this date, the IRS had reopened 263 (73 percent) of its
358 TACs.
December 27, 2020
The President signed the Consolidated Appropriations
Act, 2021,9 which includes an additional refundable tax credit
for Tax Year 2020 of up to $600 for qualified individuals
($1,200 for married couples). The IRS was required to make
advance payments of the credit by January 15, 2021.
January 11, 2021
The IRS delivered its comprehensive customer service strategy
to Congress.
February 8, 2021
As of this date, the IRS had reopened 285 (80 percent) of its
358 TACs.
February 15, 2021
As of this date, the IRS reports 8,369 VITA and TCE sites
opened or planned to open for the 2021 Filing Season.
Source: Treasury Inspector General for Tax Administration (TIGTA) summary of information
provided by the IRS.
With the majority of the IRS’s customer service channels affected by closures, as mentioned
previously, the only remaining channel for taxpayers to interact with the IRS was through its
online services. To further assist taxpayers during the closure of its customer service operations,
9 Pub. L. No. 116-260 (2020).
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
the IRS developed additional webpages on IRS.gov to provide taxpayers up-to-date information
on issues ranging from COVID-19 legislation, the EIP, and the status of IRS operations. Further,
the IRS developed two new online tools to assist individuals with obtaining an EIP. The IRS also
updated the recorded message on its toll-free telephone lines, including the TAC appointment
line, to direct taxpayers to IRS.gov for answers to their most common questions. According to
the IRS, the demand for online services increased 146 percent from Fiscal Year 2019 to Fiscal
Year 2020. Figure 3 shows some of the online systems that assisted taxpayers during the
2020 Filing Season.
Figure 3: Online Systems Enabled Millions of
Transactions During the 2020 Filing Season
Source: Article titled “Inside Operations to Handle COVID and the 2020 Filing Season”
on IRS.gov.
The IRS began its phased reopening of offices on June 1, 2020, as State and local
restrictions were lifted
As we detailed in Figure 2, the IRS began to reopen offices in Kentucky, Texas, and Utah in
accordance with State and local guidelines. All Tax Processing Centers, Campus Support sites,
and Call Centers were reopened by July 13, 2020. In an effort to restore service to taxpayers as
quickly as possible, the IRS also accelerated the implementation of several customer service
options it had been testing and expanded the use of existing technologies and capabilities. For
example, the IRS:
•
Significantly increased the number of telephone assistors that telework – As of
March 14, 2020, the IRS reported that only 237 telephone assistors were teleworking. As
of September 26, 2020, this number grew to 9,606. To enable a telephone assistor to
telework, the IRS had to obtain the necessary equipment and train employees.
Employees were also encouraged to complete training and sign telework agreements.
The IRS indicated that training can typically be completed in less than a day. However,
procuring the necessary equipment and scheduling time for employees to pick up the
equipment while being socially distanced was a challenge. We have an ongoing review
assessing the IRS’s efforts to protect the health and safety of its employees during
COVID-19 and plan to issue our report during Calendar Year 2021.10
•
Identified opportunities to move work to a remote environment – The IRS evaluated
existing workflows to identify opportunities in which inventories could be worked by
employees working remotely. For example, IRS management had its TAC employees
assist with working cases backlogged in its Accounts Management function while the
TACs were closed to the public. This allowed the IRS to continue using available
10 TIGTA, Audit No. 202010622, Efforts to Protect the Health and Safety of IRS Employees During COVID-19.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
resources and helped address backlogs in an effort to provide timely assistance to
taxpayer account inquiries, etc.
•
Expanded Electronic Fax (eFax) capabilities – This capability enables taxpayers to
transmit documents to the IRS that would otherwise have to be mailed. For example, a
taxpayer can fax documents and the IRS can then receive the documents without the
need for a physical fax machine. Received faxes are electronically routed to an IRS e-mail
inbox, with the fax content in a PDF attachment. The IRS was using eFax technology
prior to the pandemic. However, in response to the pandemic, the IRS expanded the
types of documents taxpayers can provide using eFax, as opposed to mailing to a Tax
Processing Center. For example, the IRS allowed taxpayers to submit Form 1139,
Corporation Application for Tentative Refund, and Form 1045, Application for Tentative
Refund, through eFax. The IRS also established processes to allow businesses to use
eFax to submit Form 7200 to claim the new COVID-related tax credits. Use of eFax
allowed the IRS to receive these forms and assign them to be worked by employees who
were teleworking.
•
Expanded contact free signature options for taxpayers and tax professionals –
To help taxpayers and tax professionals remotely obtain signatures, the IRS continues to
expand the use of digital signatures. Use of digital signatures reduced the need for
in-person contact and lessened the risk of exposure to COVID-19 to taxpayers and tax
professionals during the pandemic, allowing both groups to work remotely to timely file
forms. In August 2020, the IRS announced that it was temporarily allowing the use of
digital signatures on certain forms that cannot be electronically filed. The IRS has
continued to expand the number of forms that can be submitted with a digital signature.
Although customer service operations have resumed, the IRS’s ability to provide adequate
assistance to taxpayers continues to be affected by COVID-19. For example, the number of
employees who can report to an IRS office is limited due to social distancing requirements.
Employees who are exposed to COVID-19 must quarantine, further reducing available staffing.
As the IRS prepares for the 2021 Filing Season, the various IRS Customer Service functions are
continuing to explore ways to expand the IRS’s ability to assist taxpayers amid the lingering
COVID-19 threat.
Subsequent to the completion of our audit testing and during the development of our report,
we obtained updated information regarding the status of IRS customer service. The information
provided by the IRS raises significant concerns about taxpayers’ ability to obtain assistance
during the 2021 Filing Season. For example, the IRS reports that for the week ending
February 6, 2021, 254,379 calls to its toll-free telephone lines were disconnected due to a lack of
staff and increased call demands. This is despite the IRS hiring additional toll-free telephone
assistors and using contractor support to answer questions about the EIP and Recovery Rebate
Credit. In addition, the IRS reported that 73 of the 358 TACs remain closed as of
February 8, 2021. The IRS reported that as of February 15, 2021, 8,369 VITA and TCE sites are
open or plan to open for the 2021 Filing Season, which is significantly less than the start of the
2020 Filing Season.
We are also concerned that the IRS has not established a strategic approach to prioritize the
expansion of existing service options and implementation of new service options to ensure that
taxpayers are provided the best possible access to IRS assistance amid the ongoing pandemic.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
The following sections provide an overview of the actions taken by the IRS to resume operations
of its key customer service channels, the status of the channels as the 2020 Filing Season ends,
and the IRS’s plans to assist taxpayers during the 2021 Filing Season. In addition, we provide
our assessment of the IRS’s compliance with the TFA requirement to develop a comprehensive
customer service strategy.
We are conducting a separate review of the IRS’s efforts during the 2020 Filing Season to
continue processing tax returns and identify and resolve potentially fraudulent tax returns
during the COVID-19 pandemic. This review will also provide an update on the impact to the
2021 Filing Season. We plan to issue our report in the spring of 2021.
Toll-Free Telephone Service
According to the IRS, there were 87 toll-free telephone lines in operation prior to
March 19, 2020. As of March 31, 2020, the IRS shutdown 81 (93 percent)11 of the 87 toll-free
telephone lines because call center locations were closed, and most of its telephone assistors
were not telework ready. The six lines that remained opened included lines such as the tax fraud
referral line that does not offer live assistance. Instead, callers were directed to the referral form
online or given the option to request a referral form be mailed to them. In addition to the
existing 87 toll-free telephone lines, the IRS opened three additional toll-free telephone lines
during the pandemic to assist taxpayers with EIP questions and COVID-19 tax issues.
At the time the IRS closed its call sites, 237 telephone assistors had been approved for telework.
On March 13, 2020, the IRS began authorizing the use of emergency telework for its toll-free
telephone assistors. The declaration of a national emergency allowed IRS employees who were
in positions not deemed telework eligible per the National Treasury Employees Union (NTEU)
contract to telework temporarily. The contract provides that, “The Employer retains the right to
take whatever actions may be necessary to carry out the mission during emergencies.” Figure 4
shows the increase in the number of toll-free telephone assistors who were teleworking during
the pandemic.
11 This includes telephone lines that assist taxpayers with tax law questions, requesting transcripts of tax accounts,
setting up appointments for face-to-face assistance, and many other services.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Figure 4: Increase in Telephone Assistors
Teleworking During the Pandemic
Source: IRS management and Data Collection Instruments reports
as of March 14, 2020, May 16, 2020, and September 26, 2020.
Prioritization process used to reopen toll-free telephone lines
IRS management explained that they prioritized the reopening of their toll-free telephone lines
based on call demand and their goal to provide a minimal Level of Service. For example, IRS
management stated their goal is to provide a 50 percent Level of Service across all toll-free
telephone lines for Fiscal Year 2021. As such, the IRS left toll-free telephone lines closed until it
could achieve this reasonable Level of Service based upon the staffing available to meet the
demand for that toll-free telephone line. Taxpayers calling a closed toll-free telephone number
would receive an automated message directing them to other resources, such as IRS.gov.
As of September 30, 2020, the IRS had reopened 78 of the 81 previously closed toll-free
telephone lines. These 78 lines were closed for an average of 81 days. As of November 5, 2020,
the IRS had reopened 80 (98.8 percent) of the 81 previously closed toll-free telephone lines. IRS
management has no plans to reopen the remaining line, as this line was inadvertently kept open
for the Making Work Pay Credit, which was no longer available after Tax Year 2010. Although
IRS toll-free telephone lines were reopened, taxpayers continued to face increased wait times
because the number of available assistors was still below normal levels. Figure 5 shows the
decrease in the average Level of Service, average speed of answer, and TIGTA’s Level of Access
compared to Calendar Year 2019.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Figure 5: Comparison of Toll-Free Telephone Performance
Calendar Years 2019 and 2020 (as of September 25, 2020)
Sept. 27, 2019
Sept. 25, 2020
Change
IRS’s
Level of Service
64.1%
51.1%
(13.0%)
IRS’s Average
Speed of Answer
11 minutes
18 minutes
7 minutes
TIGTA’s
Level of Access12
53.1%
48.5%
(4.6%)
Source: IRS Executive Level Summary reports and Individual Filing Season reports (as of
September 27, 2019, for the 2019 Calendar Year and September 25, 2020, for the
2020 Calendar Year). TIGTA’s calculation of Level of Access.
The IRS plans to continue to allow telephone assistors to telework during Fiscal Year 2021. In
addition, IRS management increased their Fiscal Year 2021 hiring goal for the Accounts
Management function from 3,579 new employees to 5,000 new employees, which included
4,000 toll-free telephone assistors. These additional employees would assist the IRS in meeting
its Level of Service goals and reduce the time taxpayers wait to speak to an assistor. However,
as of November 23, 2020, IRS management stated that they anticipate being able to hire only
3,089 new employees to answer toll-free telephone calls. IRS management stated that the
decrease in planned staffing is due to a lack of anticipated applicants and delays in
fingerprinting and processing applicants. As of January 20, 2021, the IRS had hired 2,935 new
employees to answer toll-free telephone calls and does not anticipate hiring any additional
employees to answer toll-free telephone calls.
In March 2020,13 we reported that IRS management had not adequately addressed the
increasing risk related to their inability to recruit and retain sufficient personnel needed for its
Submission Processing functional areas. We recommended that the IRS develop a long-term
recruitment strategy, including developing contingency plans to address hiring shortages. IRS
management stated that contingency planning to address hiring shortages is an ongoing effort
and will vary by year, depending on internal and external conditions affecting staffing and the
overall workforce environment. With the continued concern that the IRS will not meet its hiring
goals, a long-term strategy continues to be needed. However, as of December 22, 2020, the IRS
still has not developed a formal long-term strategy to mitigate its hiring challenges. We have a
review that is currently assessing the IRS’s continued consolidation of Tax Processing Centers,
which will also follow up on our previous recommendation to implement a long-term
recruitment strategy.14
12 The Level of Access we computed includes the Accounts Management function’s telephone lines. Data were not
available for all IRS lines.
13 TIGTA, Ref. No. 2020-40-019, A Strategy Is Needed to Address Hiring Shortages As Efforts Continue to Close Tax
Processing Centers (Mar. 2020).
14 TIGTA, Audit No. 202140017, Continued Consolidation of the Tax Processing Centers.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
The IRS established a dedicated toll-free telephone line to assist taxpayers with
questions about the EIP
Recognizing that the EIP would affect a large number of taxpayers and the challenges these
taxpayers faced as a result of the pandemic, the IRS established a new toll-free telephone EIP
line. On May 13, 2020, the IRS awarded a vendor contract to provide assistance with the
anticipated demand of EIP telephone inquiries. The contract requires the vendor to hire
telephone assistors. These contract assistors screen EIP calls by answering general questions
from an IRS script consistent with information contained in the Frequently Asked Questions on
the IRS’s coronavirus page on IRS.gov (https://www.irs.gov/coronavirus/economic-impact-
payment-information-center). Taxpayers with questions that require research of their tax
account are transferred to the IRS for assistance. On May 18, 2020, the IRS announced that up
to 3,500 vendor telephone assistors could be added to answer some of the most common EIP
questions.
However, once established, the contractor experienced staffing delays, outages, and technical
difficulties that affected availability to taxpayers, as follows:
•
Staffing delays – The contractor was required to have 500 work-ready agents available
on May 15, 2020. IRS management stated that the contractor did not meet these staff
requirements until June 5, 2020. The contractor was also required to have 90 bilingual
assistors by May 18, 2020, but did not meet this requirement until June 25, 2020. When
asked why the contractor was unable to meet agreed upon staff requirements, IRS
management indicated that the short period of time in which the contract was required
to have agents available contributed to the delays.
•
Technical difficulties – The contractor experienced outages and technical difficulties,
which caused poor call quality and prevented taxpayers from reaching an assistor. For
example, on June 10, 2020, the contractor was initially notified of audio quality issues.
While limiting call volumes partially alleviated the issue, capacity limitations required
installation of additional hardware, and the problems were not corrected until
June 16, 2020. According to IRS management, the poor call quality was a sporadic issue
that occurred when the number of calls exceeded the contractor’s capacity. The
contractor did not have the technical capacity to handle the total number of incoming
calls received on the EIP telephone line until July 9, 2020. Starting on
December 30, 2020, the contactor again experienced capacity issues due to the increase
in call volumes because of the Consolidated Appropriations Act, 2021, enacted on
December 27, 2020. This again resulted in audio issues, a brief outage, and the necessity
to limit the incoming call volumes.
According to IRS reports, the EIP telephone line received nearly 24.6 million calls as of
November 28, 2020. All incoming calls initially receive an automated informational message. Of
the total calls received, 13.6 million (55.3 percent) calls were abandoned by the taxpayer before
moving into the contract assistors' queue,15 either because the caller’s issue was satisfied by the
information provided by the automated message or because the taxpayer grew frustrated and
hung up. The remaining 11 million (44.7 percent) calls were added to the contract assistors’
queue. Figure 6 shows the results of the 11 million calls added to the contractor’s queue.
15 The contract assistor’s queue is the waiting line to reach a contract assistor.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Figure 6: Results of the 11 Million Taxpayer Calls in the Contractor’s Queue
Source: EIP vendor reports and the IRS’s Snapshot telephone reports for the weeks ending
May 23, 2020, through November 28, 2020.
The vendor contract was set to expire on November 12, 2020. However, the IRS had the option
to extend the contract monthly, for six additional months, without re-bidding the contract. IRS
management has extended the contract through at least February 12, 2021, due to legislation
providing additional stimulus payments and increased call volumes. IRS management will
continue to assess the contract extensions monthly, through May 12, 2021, at which time
re-bidding the contract will be necessary, if contract services continue to be needed. IRS
management believes the vendor can assist individuals with questions about the process to
reconcile the EIP on their Tax Year 2020 tax returns. In general, individuals who received an EIP
must reconcile the amount received with the allowable Recovery Rebate Credit when they file
their Tax Year 2020 tax returns. Eligible individuals who did not receive an EIP or received less
credit then they are entitled will receive the additional credit when they file their Tax Year 2020
tax returns. IRS management stated that they believe contract assistors can help individuals
with the reconciliation process by leading them to sources such as prior notices, their bank
accounts, etc., to determine how much EIP they received.
IRS management stated that they plan to continue to provide a dedicated EIP toll-free
telephone line for the 2021 Filing Season. The IRS’s goal is to provide a 55 percent Level of
Service during the 2021 Filing Season, which is the same for all other toll-free telephone lines.
Adding additional toll-free telephone lines, like the dedicated EIP line, to the IRS’s existing
toll-free telephone service increases the number of customer service representatives needed to
adequately staff the additional lines.
The IRS created a mailbox to receive e-mails from congressional staffers regarding EIPs
The pandemic also caused an unexpected increase in congressional inquiries related to the EIP.
On May 14, 2020, while some telephones and other options were shut down, the IRS set up an
electronic mailbox to receive inquiries from congressional members regarding their constituent’s
EIPs. Many of these inquiries required taxpayer account research, which resulted in the IRS
training an additional 500 Accounts Management employees in July 2020, to help resolve these
inquiries. The IRS estimates it received 127,050 inquires as of November 27, 2020, of which
93,580 required account research. As of this same date, the IRS estimated it had closed
78,900 (84 percent) of the 93,580 inquires. The IRS initially planned to discontinue the EIP
mailbox for congressional inquiries on December 10, 2020. However, the IRS continued to
monitor the mailbox and as a result of additional stimulus payments, the IRS reopened the EIP
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
mailbox on January 11, 2021. IRS management stated they will continue to provide assistance
through the 2021 Filing Season.
Face-to-Face Assistance
According to the IRS, it has 358 TACs, of which six are co-located in SSA offices. In addition, the
IRS has 30 VSD partner sites. The IRS offers face-to-face assistance at its TACs, VSD partner
sites, and co-located SSA offices, generally by appointment only. When the IRS closed its
face-to-face assistance sites, it cancelled 79,264 scheduled appointments. As of
November 16, 2020, 95 TACs remain closed – 25 sites that are unstaffed for reasons unrelated to
the pandemic and 70 sites closed due to pandemic staffing issues. In addition, all 30 VSD
partner sites remain closed.
The IRS also partners with organizations to provide qualifying taxpayers with free in-person tax
return preparation services via its VITA and TCE programs. Similar to IRS face-to-face assistance
sites, many of the VITA and TCE sites were also closed.
TACs, VSD partner sites, and co-located SSA offices
The IRS started reopening TACs on June 29, 2020, in areas in which State and local restrictions
had been lifted. The IRS expected to reopen all TACs by July 27, 2020, but was unable to do so
because employees who reported to some of these locations remained on weather and safety
leave. As of November 16, 2020, the IRS had reopened 263 (73 percent) of its 358 TACs, with
service available to the public by appointment only. When we asked IRS management why
95 TACs remained closed, they stated that they were still dependent on employees reporting to
these locations and not being out due to COVID-19 exposures, etc. Figure 7 shows a map of the
open and closed TACs, as of November 16, 2020.
Figure 7: Status of TAC Locations as of November 16, 2020
Source: TIGTA’s analysis of the IRS’s Field Assistance function’s open/closed TAC list, as of
November 16, 2020.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
We analyzed the locations of the 136 TACs that were closed as of September 21, 2020, to
evaluate the potential impact on taxpayers in those communities. We found that taxpayers
living in or near these communities would need to travel on average 74 miles to obtain
assistance from a TAC, with the distance ranging from eight miles to 288 miles. Some taxpayers
may be required to travel much farther depending on the type of service required. In addition,
taxpayers may have to wait several weeks for assistance once they have scheduled an
appointment. For example, the IRS encourages taxpayers who need to make a cash payment at
a TAC to call for an appointment 30 to 60 days before the date they want to pay.
Subsequent to the completion of our audit testing and during the development of our report,
we obtained updated information on the number of TACs that remain closed. As of
February 8, 2021, the IRS reported that 73 of the 358 TACs remain closed. We also remain
concerned with taxpayers’ ability to obtain assistance during the 2021 Filing Season, as
taxpayers attempting to make an appointment via the TAC appointment telephone line often
are disconnected, due to a lack of staff and call demands. For example, for the week ending
February 6, 2021, the IRS reports 28,576 calls to the TAC appointment telephone line were
disconnected.
The need to close TACs to protect taxpayers and IRS employees significantly limited the
number of taxpayers assisted
As of September 30, 2020, the IRS reported that IRS employees answered nearly 1.4 million calls
to schedule an appointment. Of these, 694,059 (51 percent) taxpayers were assisted without
having to visit a TAC. IRS management explained that when a taxpayer calls to schedule an
appointment, the assistor provides information on other options the taxpayer can use to
address their need, including referring individuals to local Low Income Tax Clinics (LITC). The
remaining 666,976 (49 percent) calls necessitated scheduling an appointment and having the
taxpayer visit a TAC. We recognize that some of the taxpayers that necessitated scheduling an
appointment would choose not to drive hundreds of miles to the nearest TAC, as more
convenient locations remained closed. However, the IRS does not track the number of taxpayers
who need an appointment but choose not to schedule one. Figure 8 provides a comparison of
the number of taxpayers assisted through each of the IRS face-to-face assistance options for
Fiscal Years 2019 and 2020.
Figure 8: Total Face-to-Face Taxpayers
Assisted for Fiscal Years 2019 and 2020
Service
Fiscal Year
2019
Fiscal Year
2020
TAC
2,322,566
1,043,092
VSD
856
143
Co-Located Sites with the SSA
2,382
774
Source: IRS management as of September 30, 2019, and
September 30, 2020.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
The IRS limited the services it provided at TACs to reduce the risk of exposure to
COVID-19 for its employees and taxpayers
IRS management stated that as they began reopening TACs, they focused on providing those
services that are more difficult for taxpayers to complete on their own. For example, taxpayers
can get information about their tax account by calling or writing to the IRS or creating an
online account. However, taxpayers who make ***********8*********** may have no other option
but to visit a TAC. As such, the IRS ensured that this was a service that it offered. IRS
management also explained that the services available in each TAC depend on the skills of the
employees working there and the availability of specialized equipment (e.g., black lights used
for authenticating documents, *****************************8**************************************
******************8******************). Figure 9 compares TAC services offered as of
September 30, 2019, with the limited services offered as of November 30, 2020.
Figure 9: Comparison of TAC Services Offered
as of September 30, 2019, and November 30, 2020
Page 16
Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Source: IRS Internal Revenue Manual 21.3.4.2, Standard Services in a Taxpayer Assistance
Center and Service Wide Enterprise Alerts 20A0262.
As of January 25, 2021, all services are being offered at TACs for the 2021 Filing Season. IRS
management stated that they do not plan to provide return preparation assistance at TACs
during the 2021 Filing Season. IRS management stated that the IRS has not offered this service
in its TACs since January of 2014. According to IRS management, they decided to no longer
offer this service because return preparation accounted for only 2 percent of all walk-in services
provided by TACs during Fiscal Year 2013. IRS management also stated that there are other
alternative options for return preparation, such as Free-File Fillable Forms, VITA and TCE sites,
self-preparation, and paid preparers. As such, IRS management stated they chose to focus their
limited staff resources on serving taxpayers who have no other alternatives than face-to-face
assistance. Finally, management stated that they could serve more taxpayers by not offering
return preparation. For example, the IRS states it can serve two identity theft contacts for every
one return preparation contact. We recognize that the IRS has limited resources with which to
provide face-to-face services. However, given the circumstances this filing season, there is a
greater need for the IRS to provide tax return preparation services in TACs that are located in
areas where availability of VITA and TCE sites continues to be hampered by the pandemic.
Continued expansion of virtual service options is needed to better provide taxpayers
access to face-to-face assistance during the 2021 Filing Season
In February 2020, IRS management began testing a virtual service option referred to as Web
Service Delivery (WebSD). WebSD allows taxpayers to receive face-to-face assistance from an
IRS assistor from the convenience of their home or other location of their choosing. Similar to
other face-to-face service options, taxpayers must schedule an appointment. When an
appointment is made, the taxpayer receives a confirmation e-mail from the IRS that provides
their appointment details and a unique link to access this service. The taxpayer uses this link to
initiate their appointment on the scheduled date and time from their personal device. WebSD
enables the IRS to provide virtual face-to-face assistance to taxpayers from anywhere, including
an employee’s home, if necessary.
Eight TAC employees tested virtual face-to-face assistance to taxpayers as part of the WebSD
pilot.16 The pilot began on February 1, 2020, and was put on hold when TACs closed on
March 20, 2020. The IRS reported that it assisted only four taxpayers during this period, and
these taxpayers were assisted over the telephone because incorrect links were sent to the
16 Two employees in each of the four U.S. time zones.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
taxpayer. IRS management stated that issues with NTEU negotiations and connectivity, which
required pausing the pilot to fix the issues, was the cause of the IRS only serving four taxpayers.
IRS management could not provide us with information that would capture the real demand for
these services.
When we asked why the WebSD pilot was put on hold during the pandemic, IRS management
stated that the pilot was suspended because TAC employees are not telework eligible, per their
NTEU contract, and a lack of available equipment such as laptops and WebEx licenses. IRS
management did not allow TAC employees to telework until October 13, 2020. However,
management’s claim that they could not expand the WebSD pilot due to the NTEU contract is
not consistent with actions taken by other IRS functions to expand the use of telework. As we
detailed previously, the NTEU contract states that, “The Employer retains the right to take
whatever actions may be necessary to carry out the mission during emergencies.” Continuation
and an earlier expansion of this pilot would have allowed some taxpayers to continue to receive
the face-to-face assistance they needed.
We notified IRS management of our concerns with the lack of plans to expand the use of
WebSD on October 21, 2020. We recommended that the IRS expand WebSD services to
taxpayers, in a meaningful way, by immediately offering these services to all taxpayers who
contact the IRS to schedule an appointment when the closest TAC that would normally offer the
requested service is closed. IRS management responded that they were unable to expand
WebSD services as we recommended but would explore options to expand services during the
2021 Filing Season. IRS management stated that they resumed testing WebSD on
October 30, 2020. However, the pilot was still limited to eight TAC employees, and WebSD was
being offered only to taxpayers seeking assistance with their EIP.
IRS management also stated that they would explore options to use employees from other IRS
functions to expand this initiative. However, management cautioned that there are a number of
factors that need to be evaluated before the pilot can be expanded, including:
•
The types of services that can be provided. IRS management explained that not all
services provided in a TAC can be provided virtually. For example, taxpayer documents
needed to prove identity or request an Individual Taxpayer Identification Number cannot
be authenticated virtually. Virtual assistors also cannot give out paper tax forms or
accept tax returns for processing.
•
The IRS’s ability to meet the demand for WebSD service. As discussed previously, under
the current NTEU contract, TAC employees are not telework eligible, other than during
an emergency. As such, IRS management must negotiate with the NTEU to change the
telework status of its TAC employees. In addition, not all TAC employees will have access
to reliable high-speed Internet service, as required to telework. As we previously
mentioned, the IRS has the authority to temporarily place non-telework eligible
employees on telework status under the emergency clause in the current NTEU contract.
Based on this determination, it would appear that the IRS can expand the current WebSD
pilot to additional TAC employees in response to COVID-19, as long as they have access
to the necessary equipment and required high-speed Internet service.
•
Reliability and sufficiency of available technology. IRS management stated that they do
not know at this time whether the available technology is sufficient to provide effective
WebSD services. For example, while the WebEx application may be sufficient for internal
Page 18
Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
IRS virtual interactions, this application may not be sufficient for interacting with
taxpayers. IRS management also stated that they are unsure whether the IRS will
continue to use the WebEx application as the Office of Information Technology Services
is currently evaluating the use of the virtual tool Zoom.gov. We believe the WebSD pilot
provides the IRS an opportunity to evaluate the effectiveness of both WebEx and
Zoom.gov for the purpose of determining which service is most beneficial to the IRS and
taxpayers.
We acknowledge there are and will be challenges that need to be addressed. However,
we continue to believe that most services previously offered in person at TACs can be
offered through WebSD. Consistent with our observations, IRS management stated on
January 27, 2021, that they are targeting an expansion of the WebSD pilot for February 2021.
This includes expanding the number of employees who provide WebSD service to 16 TAC
employees, expanding the time zones in which virtual service is offered to include Alaska and
Hawaii, and adding the following six additional services:
•
Assisting with questions about math error notices received.
•
Answering refund inquires.
•
Answering individual tax law questions.
•
Assisting with prior year return inquiries, questions, and services.
•
Assisting with questions about notices from the Automated Underreporter Program.
•
Assisting with questions about balances due.
However, we continue to be concerned that even with the planned expansion, the WebSD pilot
is not sufficient to provide the IRS a reasonable assessment of the benefit of this service to
taxpayers and the IRS. The WebSD pilot provides the IRS the benefit to evaluate the potential
demand for virtual face-to-face service, test the suitability of available technology, and expand
access to taxpayers who are seeking face-to-face assistance. In our opinion, the WebSD pilot
will not provide meaningful results to inform the IRS’s decisions in any of these areas, as it is
currently structured. For example, the IRS did not conduct any research across taxpayer
segments to evaluate the potential demand for virtual face-to-face assistance or determine the
services taxpayers would prefer to receive virtually.
VITA and TCE programs
The VITA program offers free tax help to people who generally make $56,000 or less, persons
with disabilities, and limited English-speaking taxpayers who need assistance in preparing their
own tax returns. The TCE program provides free tax help to individuals age 60 or older. Many
taxpayers depend upon the services offered via the IRS’s VITA and TCE programs to meet their
filing requirements and to obtain refunds they may be entitled to receive. However, as of
March 31, 2020, the number of open VITA and TCE sites had decreased by 91.1 percent
compared to Fiscal Year 2019.17 This effectively limited free tax assistance for more than a
million taxpayers.
17 IRS partners reported having 820 open VITA and TCE sites as of March 31, 2020.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Recognizing the impact on taxpayers who use VITA and TCE, on April 13, 2020, the IRS
Commissioner approved the LITCs to provide free tax return preparation services during the
2020 Filing Season. The IRS explained that the LITCs are not prohibited from providing free tax
return preparation services. However, it has been a longstanding policy that the LITCs should
prepare current year tax returns only in limited circumstances. As of June 2020, a total of
102 clinics had prepared 3,020 returns. On October 14, 2020, the IRS Commissioner approved
the LITCs to provide free tax return preparation services during the 2021 Filing Season also.
VITA and TCE closures resulted in some taxpayers having to pay to prepare their
Tax Year 2019 tax return, and others still have not filed
To assess the potential impact of VITA and TCE closures on taxpayers, we analyzed how
taxpayers who used VITA and TCE to file their Tax Year 2018 returns in Calendar Year 2019 filed
their returns in Calendar Year 2020.18 Our analysis identified 3.3 million taxpayers who used
VITA and TCE to file a tax return during Calendar Year 2019. Figure 10 shows the results of
TIGTA’s analysis of these 3.3 million taxpayers for Calendar Year 2020.
Figure 10: Analysis of the Method Used by Calendar Year 2019
VITA and TCE Taxpayers to File Their Return in Calendar Year 2020
Source: TIGTA’s analysis of the Individual Return Transaction File and Individual Master File data as of
October 22, 2020.
In addition, we determined whether these taxpayers were assessed penalties as a result of
potential delays in filing their tax returns caused by the unavailability of VITA and TCE assistance.
As of October 15, 2020, the IRS had assessed Failure to File and Failure to Pay penalties totaling
$1.8 million on 77,527 of the 3.3 million taxpayers.
We provided the preliminary results of our assessment to IRS management on October 7, 2020,
and recommended that they initiate an outreach campaign to inform taxpayers about other free
or low cost services and how to find these services in their local area. We also recommended
that the IRS extend the date for which individuals can use the Free File program to file a tax
return to allow more time for individuals to use this service. IRS management responded that
the IRS took additional steps to assist taxpayers who use VITA and TCE services and initiated an
outreach campaign to inform taxpayers. However, the information the IRS provided to us
regarding this outreach campaign is focused on educating individuals who do not have a tax
return filing requirement on how to obtain an EIP. The use of the tool cited in the campaign
information can be used only to electronically file a “short” return to claim an EIP. This tool
18 Taxpayers who qualify for VITA and/or TCE services in one year may or may not qualify in the next year.
Furthermore, taxpayers may choose not to use these services, even if they do qualify.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
should not be used by individuals who have a tax return filing requirement or who are filing to
claim a refund of withholding.
Finally, IRS management stated that they approached Free File, Inc., which is responsible for
operating the Free File program, about possibly remaining open longer than October 15, 2020.
However, this was not an option as all of the member companies needed time to prepare their
software for the upcoming filing season. For those taxpayers that received a Failure to File
penalty, IRS management stated that the IRS will continue to consider penalty relief requests on
a case-by-case basis and is also continuing to consider any additional relief specific to
circumstances presented by the COVID-19 pandemic.
Preparations for the 2021 Filing Season are underway; however, the IRS is unsure at this
time how many volunteer sites will be available
The IRS is working with its partner organizations in an effort to ensure that taxpayers will have
access to volunteer tax return preparation services during the 2021 Filing Season. On
October 21, 2020, the IRS announced that it had awarded grants to 273 VITA and 34 TCE
applicants. IRS management also stated that they have requested an additional 2,000 electronic
tax preparation software licenses for use by VITA and TCE volunteers for a total of
10,000 licenses for the 2021 Filing Season. However, IRS management noted that they do not
know how many VITA and TCE locations their partner organizations plan to operate. The IRS
explained that the number of VITA and TCE sites its partners can operate depends on the
number of individuals who volunteer to prepare tax returns. The IRS is continuing its efforts to
secure volunteers. In addition, IRS management explained that some VITA and TCE sites
prepare only current year tax returns. As such, taxpayers who still need to file a Tax Year 2019
return may be unable to use the VITA or TCE program.
To help address the impact of COVID-19, the IRS notified its partners that VITA and TCE grant
money can be used to support social distancing measures such as purchasing personal
protective equipment to help keep volunteers and taxpayers safe. The IRS has also been hosting
meetings to share information and best practices with its VITA and TCE partners. In addition,
IRS management indicated that there will be more emphasis on virtual tax preparation methods
for the 2021 Filing Season. According to the IRS, there are three basic tax preparation models:
face-to-face, face-to-face with a virtual component, and virtual only. IRS management stated
that VITA and TCE partners that choose to provide virtual services must meet specific security
requirements.
Subsequent to the completion of our audit testing and during the development of our report,
we obtained updated information on the number VITA and TCE sites that will be open. As of
February 15, 2021, the IRS reported 8,369 VITA and TCE sites opened or planned to open for the
2021 Filing Season. This is significantly less than the start of the 2020 Filing Season.
The Commissioner, Wage and Investment Division, should:
Recommendation 1: Consider providing tax return preparation services during the 2021 Filing
Season, by appointment only, in TACs that are located in areas where access to VITA and TCE
assistance is limited.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Management’s Response: The IRS disagreed with this recommendation. IRS
management stated that employees have not received training in tax preparation. In
addition, management believes providing tax return preparation service would severely
limit the IRS’s ability to provide other face-to-face services that taxpayers need. IRS
management stated that when the IRS considered offering return preparation services in
TACs in the past, data showed that most taxpayers sought tax return preparation
assistance from other sources, with the majority self-preparing or using a paid preparer
to prepare their return. With the availability of the Free File, Inc. program and other
commercial tax preparation software, there is less reliance on the IRS to provide this
service. Management also believes that focusing its resources on account-related issues
allows its employees in the TACs to work more efficiently on services that are not
provided outside of the IRS, including taxpayer authentication related to identity theft
and the new legislative requirement to assist taxpayers with obtaining an Identity
Protection Personal Identification Number.
Office of Audit Comment: IRS management stated that past data showed that
most taxpayers seek tax return preparation assistance from other sources.
However, as stated in our report, the number of VITA and TCE sites opened or
planned to open as of February 15, 2021, is significantly less than the start of the
2020 Filing Season. In addition, IRS management explained that some VITA and
TCE sites prepare only current year tax returns. As such, taxpayers who still need
to file a Tax Year 2019 return may be unable to use the VITA or TCE program
during the 2021 Filing Season.
Recommendation 2: Ensure that the WebSD pilot provides a sufficient assessment of
taxpayers’ demand for virtual face-to-face services, adequately tests available technology for
providing virtual assistance, to be consistent with the underlying premise of the Taxpayer
Experience Strategy.
Management’s Response: The IRS agreed with this recommendation. IRS management
stated that the WebSD is a limited pilot testing of services normally available in TACs and
as such, cannot provide a full assessment of taxpayers’ demand for virtual face-to-face
services throughout the IRS. However, management plans to assess and report the
overall results, including taxpayer feedback from taxpayer surveys, data, and other
customer service measures and technology after the completion of the pilot.
Recommendation 3: Advise VITA and TCE sites, with sufficient capacity, to consider preparing
prior year tax returns during the 2021 Filing Season.
Management’s Response: The IRS agreed with this recommendation and has
encouraged VITA and TCE sites with sufficient capacity to prepare prior year tax returns.
However, IRS management advised that this is an optional service that partners can
provide at their discretion and is based on required available resources. As of
January 15, 2021, IRS management has been providing continued resources and
guidance to ensure VITA and TCE sites are equipped with the necessary tools to prepare
accurate current and prior year tax returns. Additionally, when a taxpayer is interested in
visiting a VITA/TCE site for prior year return preparation, the taxpayer may visit the VITA
Locator on IRS.gov, which identifies whether the site prepares prior year returns.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Recommendation 4: Initiate an outreach campaign to inform taxpayers about free tax return
preparation services available during the 2021 Filing Season, including the option to use VITA or
TCE sites to prepare a prior year return. This campaign should also include information about
the availability of the LITCs, including the location of these clinics and the tax preparation
services offered.
Management’s Response: The IRS agreed with this recommendation. As of
January 15, 2021, IRS management continued to develop and deliver to partners
timely outreach messages to inform taxpayers about traditional VITA, TCE, Facilitated
Self-Assistance, Virtual VITA, and the Free File, Inc. program, in addition to the IRS’s
postcard initiative. Management also provided resources and guidance to ensure VITA
and TCE sites are equipped with the necessary tools to prepare accurate prior year tax
returns and encouraged those sites with sufficient resources to prepare prior year tax
returns. However, this is an optional service that partners can provide at their discretion
and is based on required available resources.
Taxpayer Correspondence and Products
When the IRS closed its offices, it was no longer able to process mail at its Tax Processing
Centers and Campus Support functions.19 The IRS estimated it received:
•
10.3 million pieces of unopened mail while the Tax Processing Centers were closed as of
May 23, 2020. This figure grew to a high of more than 11.9 million pieces of unopened
mail, as of June 20, 2020. As of November 14, 2020, the IRS still had approximately
3 million pieces of unopened mail.
•
413,245 pieces of mail at its Campus Support functions as of May 16, 2020. The IRS was
able to work through the backlog of mail at the Campus Support functions by
July 18, 2020.
The IRS Accounts Management function works correspondence received from taxpayers.
Accounts Management relies on Tax Processing Center and Campus Support employees to
open, sort, and distribute mail to Accounts Management offices to be worked. Employees then
prepare and scan correspondence into the Accounts Management inventory system called the
Correspondence Imaging System. As of November 28, 2020, the Accounts Management
correspondence inventory totaled 846,609 cases, of which 337,286 (40 percent) were over-aged
(i.e., exceeded the IRS’s goals for resolving the taxpayer’s correspondence). This is an increase of
9 percent in over-age inventory compared to a similar time last year.
As of November 28, 2020, Accounts Management was expecting to receive nearly 2 million
additional cases from the Tax Processing Centers as they continue to open the backlog of mail.
As such, IRS management does not expect to be able to work the correspondence received
during Calendar Year 2020 before the start of the 2021 Filing Season. IRS management stated
that they will continue to offer overtime to assist with the timeliness of the correspondence
programs. According to the IRS, as of September 26, 2020, Accounts Management had
13,732 (94 percent) of its staff who handle inventory reporting to work. In addition, there were
1,078 employees remaining on weather and safety leave. However, Accounts Management
19 Campus Support locations receive, sort, and distribute taxpayer correspondence and amended tax returns.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
employees who resolve correspondence inquires also answer the toll-free telephone lines. As
such, Accounts Management must continually balance these two shifting priorities.
Subsequent to the completion of our audit testing and during the development of our report,
we obtained updated information on the correspondence inventory in Accounts Management.
As of January 23, 2021, the Accounts Management correspondence inventory totaled
1,103,606 cases, of which 491,875 (45 percent) were over-aged.
The IRS cleared the backlog of correspondence that needed to be sent to taxpayers and
has plans to ensure that no subsequent backlogs occur moving forward
In addition to receiving mail from taxpayers, the IRS sends millions of letters, notices, forms,
instructions, and publications to taxpayers and other stakeholders. The majority of
correspondence that the IRS sends to taxpayers is printed and mailed from two centralized CPS
sites located in Detroit, Michigan, and Ogden, Utah. By April 8, 2020, both of these sites were
closed in response to the pandemic. The IRS’s CPS function receives requests from various IRS
functions to print and mail letters and notices to taxpayers and their representatives. According
to the IRS, there were more than 22.1 million items waiting to be printed and mailed, as of
May 14, 2020.
As of June 15, 2020, the IRS had resumed operations at a limited capacity at both of its CPS
sites. When resuming operations, IRS management explained that they coordinated with all
affected IRS functional areas to prioritize which notices should be mailed first and which notices
were no longer necessary and could be deleted from the print queue (i.e., monthly payment
reminders for months that had already passed). The IRS cleared all of the correspondence that
was backlogged due to the shutdown by July 18, 2020.
Additionally, the IRS’s People First Initiative provided relief to taxpayers from April 1, 2020, to
July 15, 2020, by halting collection and examination notices. To prevent additional backlogs, the
IRS secured a contract on July 17, 2020, with multiple vendors to assist with any increases in
print demand that the CPS locations may be unable to handle during the ongoing pandemic.
According to IRS management, the resumption of collection activities resulted in the need for
vendor support to print and mail approximately 11 million items that exceeded CPS capacity.
These items included notices that were to be issued between November 9, 2020, and
November 23, 2020.
However, the vendors were unable to accept all of the IRS’s notices due to their own capacity
limitations at that time. As a result, IRS management had to assess the newly created backlog of
notices and once again coordinate with IRS functional areas to identify which notices could be
deleted from the queue and prioritize the mailing of the remaining notices. To assist taxpayers,
the IRS developed a letter (or stuffer) to include in the envelope of those notices that were
mailed explaining why they received a delayed notice and what actions they needed to take. IRS
management is continuing to assess the potential volume of correspondence that will need
printed and mailed moving forward and determining whether vendor support will be needed.
IRS management stated that they have been in contact with vendors, and the vendors expect to
be able to handle any volumes going forward. We have a separate audit ongoing that is
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
assessing the IRS’s response to compliance actions during the pandemic.20 We plan to issue our
report later in Calendar Year 2021.
Office closures resulted in fewer orders for tax products during the pandemic
The NDC provides print and distribution services of IRS forms, publications, etc., for both the IRS
and external stakeholders, including bulk order requests.21 The NDC closed on March 21, 2020,
and reopened on July 13, 2020. During this time, the IRS did not accept any customer orders for
tax documents. According to the IRS, the NDC had 211,500 unfilled orders when it reopened on
July 13, 2020. The IRS was able to fill these orders by October 6, 2020.
As of September 30, 2020, the NDC has received more than 1.2 million orders, which is a
20 percent decrease from the previous year. Figure 11 provides a comparison of order
quantities from Fiscal Years 2019 and 2020.
Figure 11: Comparison of NDC Orders by Fiscal Year
Source: The IRS’s Enterprise Logistics Information Technology system as of
September 30, 2019, and September 30, 2020.
The NDC received 155,471 orders between October 1, 2020, and November 30, 2020. IRS
management does not anticipate any issues with filling customer orders during the 2021 Filing
Season. IRS management stated that they are in the process of training additional employees
who can help with demand, if needed. They also stated that space needed to remain socially
distanced is not an issue in NDC facilities. As such, IRS management does not anticipate any
service disruptions.
A comprehensive strategy is needed to expand the use of eFax and phase out reliance on
physical fax machines
The IRS primarily relies on mail services and traditional fax services to receive correspondence
from taxpayers. As of July 1, 2020, the IRS reported having 520 machines capable of receiving
faxes in operation at its Tax Processing Centers.22 During the time frame the Tax Processing
Centers were closed, the IRS turned off fax machines to prevent correspondence from
continuing to come in to the Tax Processing Centers while employees were not present to work
the inventory. For those taxpayers who continued to mail in correspondence, the IRS also
coordinated with the U.S. Postal Service to have all mail that could not be delivered on-site held
by the Postal Service or stored in semi-trailers at each IRS location as needed. Both methods
20 TIGTA, Audit No. 202030628, Internal Revenue Service’s People First Initiative.
21 The NDC provides low-volume print-on-demand and distribution services of IRS forms, publications, etc., for both
the IRS and external stakeholders, including bulk order requests. The Publishing program procures the high-volume
print requests through the Government Printing Office.
22 This includes 150 traditional fax machines and 370 multi-use copy machines.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
used to receive correspondence from taxpayers results in the need for the IRS to process paper
correspondence.
As discussed previously, the IRS has developed electronic fax processes, referred to as Enterprise
Electronic Fax or eFax, for use in certain situations. EFax is an electronic fax solution that may be
used to send and receive fax documents without the need for a fax machine. However,
taxpayers must still have access to fax services to send the information to the IRS. The IRS
developed interim procedures in response to COVID-19 to accept additional forms from
taxpayers via eFax.
In July 2020, the IRS announced the creation of the Enterprise Digitalization and Case
Management Office (EDCMO). The EDCMO was created to focus the IRS’s efforts on enterprise
case management, the modernization of paper processes, and the promotion of digital
technologies to improve business processes and the taxpayer experience. The EDCMO’s efforts
will spearhead the IRS’s efforts to empower taxpayers and IRS employees to rapidly resolve
issues in a simplified digital environment. These efforts will support overall IRS modernization
and implementation of long-term changes stemming from the TFA, including modernizing
paper processes and establishing an enterprise-wide case management system. IRS
management stated that there is an easy correlation between case management and
modernization. As such, it makes sense to look at improving the digitalization of paper records.
We met with the EDCMO to discuss the IRS’s overall strategy for expanding the use of eFax and
phasing out the IRS’s reliance on physical fax machines. IRS management stated that currently,
each IRS function or program is responsible for maintaining its own case management
processes until the Enterprise Case Management (ECM) system is fully operational. The EDCMO
stated that it is in the process of assessing the best methods to intake paper documents for
each function or program as part of its digitalization efforts. The EDCMO is starting with small
work streams and testing the processes of digitalizing the inventory and adding it to the ECM
system as needed. IRS management stated that the ECM system is a key component in the
Taxpayer Experience Strategy’s 360 Degree View of Taxpayer Accounts. However, the IRS
estimates it will be five to 10 years before the 360 Degree View of Taxpayer Accounts is fully
implemented. IRS management indicated that if priorities shift, ECM system plans can be
adjusted to adapt to changing conditions. The EDCMO projects that by the spring of 2021,
planning will be sufficient to assess the possibility of adding new channels such as eFax to the
ECM system for case creation. We have a separate audit ongoing that is assessing the IRS’s
efforts to modernize paper tax return processing.23 We plan to issue our report during
Calendar Year 2021.
A Comprehensive Customer Service Strategy Was Developed As Required by
the Taxpayer First Act
Our assessment of the IRS’s comprehensive customer service strategy, referred to as the
Taxpayer Experience Strategy, found that the strategy met the legislative requirements of
Provision 1101 of the TFA, with the exception of the reporting date to Congress. The TFA
required the IRS to provide the strategy to Congress by July 1, 2020. However, the IRS informed
Congress on April 17, 2020, that due to its intense focus and shift in resources in response to
23 TIGTA, Audit No. 202140010, Modernizing Paper Tax Return Follow-Up.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
COVID-19, the IRS planned to submit the strategy to Congress in December 2020. The IRS
delivered the strategy on January 11, 2021. Figure 12 shows the Taxpayer Experience Strategy’s
compliance with the six specific requirements in the TFA.
Figure 12: Taxpayer Experience Strategy’s
Compliance With Legislative Requirements
Source: TIGTA’s assessment of Provision 1101 of the TFA and review of the Taxpayer Experience
Strategy.
Providing secure assistance to taxpayers and adopting best practices of customer
service
Our review of the IRS Taxpayer Experience Strategy found that it includes adopting best
practices in customer service, including providing secure assistance options to taxpayers. To
determine whether the strategy included best practices, we compared the secure services five
State taxation agencies24 provide to their taxpayers with the services the IRS plans to offer.
We found that the Taxpayer Experience Strategy includes many of the services currently
provided by these States. Many of the services contained in the Strategy are also included in
the IRS’s Integrated Modernization Business Plan, which was issued in April 2019. Services
include:
•
Secure e-mail and two-way messaging.
•
The ability to upload tax documents online.
•
Providing personalized tax updates.
We also found that the Taxpayer Experience Strategy includes services that are not currently
provided by some of the five States. Services include:
•
Virtual face-to-face assistance.
•
Web chats and digital appointments powered by artificial intelligence.
24 We interviewed representatives from or researched websites for the five most populous States – California, Florida,
New York, Pennsylvania, and Texas.
Legislative Requirements of the Taxpayer Experience Strategy
Did IRS Meet
Requirements?
Plan to provide secure assistance to taxpayers that meets reasonable expectations
and adopts appropriate best practices of customer service.
Thorough assessment of the services the IRS can co-locate with other Federal
services or offer as self-service options.
Proposals for improved customer service in short term (current and following fiscal
year), medium term (three to five fiscal years), and long term (10 fiscal years).
Plans to update guidance and training material for customer service employees.
Identify metrics and benchmarks to quantitatively measure progress.
Submit strategy to Congress by July 1, 2020.
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•
Digitally aided translation and interpretation.
Offering self-service options and co-locating services with other Federal services
The Taxpayer Experience Strategy expands digital services by improving the secure online
accounts currently available to individual taxpayers and making similar online accounts available
for businesses and tax professionals. According to the IRS’s Taxpayer First Act Office, COVID-19
has further highlighted the importance of expanded digital self-service options for taxpayers.
Figure 13 shows some examples of the self-service capabilities included in the Taxpayer
Experience Strategy.
Figure 13: Examples of Expanded Self-Service Options
Self-Service Option
Description
Taxpayer View History
Will allow taxpayers to see information about their tax histories
(e.g., refunds, payments received, amounts owed, returns filed) through
their online accounts to ensure transparency and accessibility of records.
Change Account Information
Will allow taxpayers to update contact information and other key details.
Secure Document Exchange
Will allow taxpayers, businesses, tax professionals, and IRS employees to
securely upload and access documents in a centralized repository.
Artificial Intelligence Chat Bots
Will attempt to answer questions or direct taxpayers to information on
IRS.gov or their online account before connecting taxpayers to an IRS
assistor for a web chat or voice call.
Source: TIGTA’s review of the Taxpayer Experience Strategy.
Our review of the Strategy shows that the IRS plans to expand its partnership with the SSA to
provide face-to-face assistance to taxpayers. Currently, the IRS has face-to-face assistors
located at six SSA offices. We previously reported that the IRS does not use its data-driven
Geographic Coverage Model (GCM) to expand face-to-face assistance to underserved areas with
a high number of taxpayers who are likely to seek this type of service.25 We recommended that
the IRS use the GCM when expanding face-to-face assistance to new locations. The SSA’s
website had a list of 1,354 field offices that could be used in conjunction with the GCM to
identify optimal co-located sites with the SSA. We also noted that co-locating services with an
SSA site is the most economical method, as the IRS paid only $26,984 to rent space at the SSA
co-located sites it operated in Fiscal Year 2018. As such, we continue to encourage the IRS to
use the GCM for the expansion of co-located sites with other Federal agencies as part of the
Taxpayer Experience Strategy.
In addition, in December 2020, we reported that IRS processes do not consistently provide
taxpayers the opportunity to self-correct errors on electronically filed tax returns.26 For example,
we found that some electronically filed returns with a missing form are rejected to provide the
25 TIGTA, Ref. No. 2019-40-029, The Internal Revenue Service Did Not Follow Congressional Directives Before Closing
Taxpayer Assistance Centers; a Data-Driven Model Should Be Used to Optimize Locations (May 2019).
26 TIGTA, Ref. No. 2021-40-008, Expansion of Self-Correction for Electronic Filers and Other Improvements Could
Reduce Taxpayer Burden and Costs Associated with Tax Return Error Resolution (Dec. 2020).
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
taxpayer the opportunity to self-correct the error (i.e., attach the missing form and resubmit the
return), while others are accepted and sent to the Error Resolution function for manual
correction by an IRS employee, which suspends the return and holds the refund until the error
condition is resolved. This increases taxpayer burden and reduces the efficiency and
effectiveness of tax return processing. IRS management agreed with our recommendation to
provide taxpayers with the opportunity to self-correct errors.
Developing proposals for improving customer service in various time intervals
The Taxpayer Experience Strategy includes proposals for improving customer service in
identified time intervals, as required, and provides high-level resource estimates for each time
interval. However, we question the prioritization of some of the customer service initiatives
contained in the Strategy and are concerned that the IRS plans to take 10 years to fully
implement the strategy. A number of the capabilities contained in the Strategy can provide
immediate relief to the IRS for many of the issues it has been struggling with during the
pandemic. However, based on the Strategy, the IRS does not plan to implement some of these
capabilities for another three to five years. The IRS should prioritize the implementation of
these capabilities rather than waiting to implement them years down the road. In addition,
some of the technology described in the Strategy may be outdated before the functionality is
fully implemented. For example, the State of California offers its taxpayers two-way secure
messaging between an assistor and taxpayer. Yet the IRS plans to take up to five years to
implement this capability.
The IRS stated that it plans to use an agile development process to implement the Taxpayer
Experience Strategy. Each initiative will be developed and implemented in smaller phases. IRS
management stated that this will allow the IRS to implement new services as they are developed
rather than waiting until all of the functionality for an initiative has been developed. This
process should enable the IRS to implement new services quicker than in the past. Various
TIGTA reports27 show that the IRS’s history of implementing complex strategies has been
plagued with increased costs and delays over initial estimates. Figure 14 shows some of the
customer service proposals that the IRS plans to implement in various time intervals over the
next 10 years.
27 See Appendix II for a list of these reports.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Figure 14: Examples of Customer Service Proposals
Planned for Implementation Over the Next 10 Years
Source: TIGTA’s review of the Taxpayer Experience Strategy.
Updating guidance and training materials for customer service employees
The IRS included its plans for updating guidance and training materials for customer service
employees in its draft comprehensive training strategy. The training strategy is required by
Section 2402 of the TFA. The IRS submitted the comprehensive training strategy to Congress in
January 2021 along with the Taxpayer Experience Strategy. The actual guidance and training
materials for customer service employees are required to be updated no later than two years
after the TFA was passed (i.e., July 2021).
To implement the Taxpayer Experience Strategy and improve training across the IRS, the IRS
plans to create a centralized educational organization, or "IRS University," to support the IRS’s
mission. The IRS believes that creating a strategic curriculum will instill the importance of
taxpayer service in all employees, and that a high-quality, taxpayer-first training will further
develop employee skillsets, improve morale, increase productivity, enhance knowledge transfer
between employees, and foster innovation.
The new training programs will also emphasize customer service skills such as civility, inclusive
behaviors, cultural competency, taxpayer rights, understanding taxpayer needs, multi-language
access, and unconscious bias. The training strategy also focuses on providing continuous
training throughout an IRS employee’s career. The training strategy states that this increased
focus on continuous training will increase taxpayer satisfaction with exceptional taxpayer service.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Identifying metrics and benchmarks to quantitatively measure progress
The IRS has identified four key metrics it plans to evaluate. The IRS believes the following
metrics will help assess the strategy’s impact on voluntary compliance.
•
Taxpayer Access Measures – Measures the degree to which taxpayers have access to
needed information and services. The IRS plans to measure this based upon where it is
currently and the IRS’s success in increasing the access over time. For example, the IRS
plans to measure the percentage of taxpayer interaction types that have a digital
alternative in order to determine whether the IRS is providing enough digital options for
taxpayers to access when interacting with the IRS.
•
Taxpayer Adoption Measures – Measures the extent to which taxpayers adopt existing
and new options for receiving service and information. For example, the IRS plans to
measure the number of taxpayers with an active secure online profile to determine how
many taxpayers are adopting the digital option available.
•
Taxpayer Impact Measures – Measures whether or not the service or information had
the desired impact. The IRS plans to measure impact based upon a combination of
satisfaction surveys and IRS quality and performance data. For example, the IRS plans to
measure the number of hours saved by taxpayers when they rely on digital
self-assistance options rather than having to call the IRS or visit in person.
•
Intermediary Outcome Measures – Measures like trust, confidence, and taxpayer
satisfaction will serve as intermediary output to help the IRS determine if voluntary
compliance is improved. The measures will primarily come from taxpayer surveys. For
example, the IRS plans to measure things like the percentage of taxpayers satisfied with
their personal interactions with the IRS and the percentage of taxpayers satisfied with the
time it took to resolve an issue.
The IRS plans to report measures annually by fiscal year and include baselines, targets,
projections, and sources, when appropriate. For new measures, the IRS’s Strategy lays out the
timetable for designing, testing, and implementing these measures. The IRS also plans to seek
feedback and continuously update its measures over time. We plan to perform additional
reviews to monitor the IRS’s implementation of the Taxpayer Experience Strategy, including an
evaluation of specific goals and milestones.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this review was to assess the impact of the COVID-19 pandemic on IRS
customer service operations and evaluate the development of the IRS’s comprehensive
customer service strategy. To accomplish our objective, we:
•
Monitored inventory levels, staffing levels, etc., for each IRS function that had an impact
on customer service operations.
•
Determined the impact on taxpayers calling the IRS’s toll-free telephone lines and
evaluated actions taken by the IRS to resume operations, including identifying the
number of toll-free telephone lines the IRS operated, monitoring when lines reopened,
and determining how the closures affected the IRS’s levels of service and levels of access.
•
Determined the number of telephone assistors who were teleworking prior to the
pandemic and monitored the IRS’s efforts to increase the number of teleworking
telephone assistors.
•
Assessed the IRS’s efforts to assist taxpayers with EIP questions, including the demand to
the EIP toll-free telephone line, the IRS’s use of a vendor to support this line, and the
IRS’s creation of an e-mail address to receive EIP congressional inquiries.
•
Determined the impact on taxpayers trying to obtain face-to-face assistance and
evaluated the actions taken to resume these operations, including determining the
number of TACs the IRS operates, monitoring when TACs reopened, and assessing the
IRS’s use of virtual face-to-face assistance.
•
Determined the impact on taxpayers trying to obtain free tax return preparation
assistance and evaluated the actions taken to resume operations, including determining
the number of partner sites, monitoring when sites closed or reopened, and determining
how taxpayers who relied on these services for Calendar Year 2019 filed their return in
Calendar Year 2020.
•
Determined the impact on taxpayers corresponding with the IRS and evaluated actions
taken by the IRS to resume operations, including identifying when taxpayers need to
correspond with the IRS and if alternative options, such as eFax, were available.
•
Determined the impact on taxpayers who were unable to obtain notices, letters, forms,
instructions, and publications from the IRS and evaluated actions taken to resume these
operations, including determining how IRS management worked through the backlog
and prioritized mailings.
•
Assessed the IRS’s comprehensive customer service strategy required by the TFA,
including determining whether it met the legislative requirements, how the IRS
developed the strategy, whether the strategy included customer service options
provided by the five most populous State taxation agencies, and whether the IRS
included information learned as a result of the COVID-19 pandemic.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Performance of This Review
This review was performed with information obtained from the Customer Account Services and
the Customer Assistance, Relationship, and Education offices within the IRS’s Wage and
Investment Division, and the IRS’s Taxpayer First Act Office located in Atlanta, Georgia, during
the period May through December 2020. We conducted this performance audit in accordance
with generally accepted government auditing standards. Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objective. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on our audit
objective.
Major contributors to the report were Russell P. Martin, Assistant Inspector General for Audit
(Returns Processing and Account Services); Deann L. Baiza, Director; Jeffrey D. Cullum, Audit
Manager; Brieane K. Hamaoka, Lead Auditor; Oliver E. Einstein, Auditor; and Ryan M. Kenaley,
Auditor.
Validity and Reliability of Data From Computer-Based Systems
We performed tests to assess the reliability of data from the IRS’s Individual Return Transaction
File and the Individual Master File that were available on TIGTA’s Data Center Warehouse. We
evaluated the data by performing electronic testing of required data elements and reviewing
existing information about the data. In addition, we selected data from each extract and verified
that the data in the extracts were the same as the data captured in the IRS’s Integrated Data
Retrieval System. We determined that the data were sufficiently reliable for purposes of this
report.
Internal Controls Methodology
Internal controls relate to management’s plans, methods, and procedures used to meet their
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance. We determined that the
following internal controls were relevant to our audit objective: the processes to close and
reopen IRS customer service operations and the IRS’s assessment of the impact of these
decisions on taxpayers. We evaluated these controls by reviewing IRS procedures in the Internal
Revenue Manual, IRS intranet, and SharePoint sites; meeting with IRS management and subject
matter experts; and reviewing relevant documentation.
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Appendix II
Treasury Inspector General for Tax Administration Reports –
Cost Increases and Delays in the IRS’s
Implementation of Complex Strategies
Reference
Number
Project Description
Issues Occurred
2007-20-121
Business Systems
Modernization Program
The IRS experienced difficulties with this ongoing
project to modernize the IRS’s technology and related
business processing because of issues managing
contractor work and lack of funding. Many of the
modernization projects were not completed as
planned. For example, the planned completion date
for a Customer Account Data Engine was delayed from
2005 to an estimated 2012.
2009-20-102
Deployment of My IRS
Account Project
This project, which would have given taxpayers the
ability to see account/tax return information and
access self-services through online accounts, was
terminated due to the IRS changing its priorities. In
total, 32 months of work and approximately
$10 million was spent on the development of the My
IRS Account project before being terminated.
2009-20-079
Development of a New
Web-Based Portal
Environment
The development of a new web-based portal
environment was cancelled due to the lack of a
comprehensive enterprise strategy and budget
challenges. The purpose of this project was to
upgrade the portal environment that the IRS was using
at the time because a significant amount of portal
equipment was either nearing or at the end of its life
cycle.
2009-40-130
Efforts to Modernize
Paper Tax Return
Processing
The IRS devoted significant resources to identify ways
to modernize the method of processing paper tax
returns with no success in implementation. Since
1988, the IRS attempted to replace the method of
processing paper tax returns, but efforts resulted in
little more than conceptual versions.
2012-20-115
SmartID Card to Access
Computer Systems
This project, which would allow employees to access
computer systems with a SmartID Card, was originally
scheduled for completion September 2011, but was
delayed until July 2013 due to software problems,
changing priorities, and negotiations. In addition, the
IRS did not appoint a project manager with the
requisite training experience, which led to numerous
issues.
2013-20-125
Customer Account Data
Engine 2 Database
Deployment
Taxpayer service improvements that were to be
provided by the new transactional database were
delayed and elements of the project had not met the
revised deadlines. Database deployment costs rose
an estimated 74 percent to $83 million.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Reference
Number
Project Description
Issues Occurred
2017-20-057
Release 1.0 of The Web
Applications System
The release of version 1.0 of the Web Applications
system experienced significant delays due to the lack
of staff and inconsistent governance. Version 1.0 of
the Web Applications project that would give taxpayers
online services such as seeing balances due and
payment status/history, make a payment, and
view/download online transcripts was delayed from
September 30, 2015, until December 2016.
Source: TIGTA audit reports.
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Appendix III
Management’s Response to the Draft Report
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Appendix IV
Glossary of Terms
Term
Definition
Campus Support Site
IRS locations that handle incoming and outgoing mail operations where Tax
Processing Centers have closed.
Correspondence
Production Services
Centralized sites located in Detroit, Michigan, and Ogden, Utah, used to
print and mail IRS correspondence.
Data Center Warehouse
A collection of IRS databases containing various types of taxpayer accounts
and IRS and TIGTA employee information that is maintained by TIGTA for
the purpose of analyzing data for ongoing audits.
Electronic Fax
An electronic fax that may be used to send and receive fax documents
without the need for a fax machine.
Filing Season
The period from January through mid-April when most individual income
tax returns are filed.
Individual Master File
The IRS database that maintains transactions or records of individual tax
accounts.
Individual Return
Transaction File
A database the IRS maintains that contains information on the individual tax
returns it receives.
Individual Taxpayer
Identification Number
A number created by the IRS to provide Taxpayer Identification Numbers to
individuals who do not have and are not eligible to obtain a Social Security
Number.
Integrated Data Retrieval
System
IRS computer system capable of retrieving or updating stored information.
It works in conjunction with a taxpayer’s account records.
Level of Access
The total number of calls seeking assistance that ultimately receive
assistance from the IRS. This is computed by taking the sum of Assistor
Calls Answered and Automated Calls Answered divided by Total Dialed
Number Attempts Open Hours.
Level of Service
Represents the relative success rate of taxpayers who call the Accounts
Management function’s telephone lines seeking assistance.
Low Income Tax Clinic
A program overseen by the National Taxpayer Advocate that provides free
or low cost assistance to taxpayers who need help resolving a tax dispute
with the IRS and cannot afford representation, and taxpayers who speak
English as a second language and need help understanding their tax rights
and responsibilities.
National Distribution
Center
Centralized distribution center that provides printing and distribution
services of IRS forms, publications, etc., for both the IRS and external
stakeholders.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Taxpayer Assistance
Center
Local offices nationwide staffed by IRS employees who are trained to
provide a variety of services including answering tax account questions,
taking cash payments, and authenticating the identity of individuals who
have been identified as potential victims of tax-related identity theft.
Virtual Service Delivery
An initiative to expand face‐to‐face services to taxpayers when a TAC is not
in their geographic area. Taxpayers visit an alternate location where they
access an IRS computer to see and hear an IRS assistor located at a remote
location.
Weather and Safety Leave
May be permitted when weather or other safety-related conditions prevent
employees from safely traveling to or safely performing work at an
approved location, such as the official duty station or telework location.
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Assessment of the Effects of the Coronavirus Pandemic on Customer Service Operations
Appendix V
Abbreviations
COVID-19
Coronavirus Disease 2019
CPS
Correspondence Production Services
ECM
Enterprise Case Management
EDCMO
Enterprise Digitalization and Case Management Office
eFax
Electronic Fax
EIP
Economic Impact Payment
GCM
Geographic Coverage Model
IRS
Internal Revenue Service
LITC
Low Income Tax Clinic
NDC
National Distribution Center
NTEU
National Treasury Employees Union
SSA
Social Security Administration
TAC
Taxpayer Assistance Center
TCE
Tax Counseling for the Elderly
TFA
Taxpayer First Act
TIGTA
Treasury Inspector General for Tax Administration
VITA
Volunteer Income Tax Assistance
VSD
Virtual Service Delivery
WebSD
Web Service Delivery
To report fraud, waste, or abuse,
call our toll-free hotline at:
(800) 366-4484
By Web:
www.treasury.gov/tigta/
Or Write:
Treasury Inspector General for Tax Administration
P.O. Box 589
Ben Franklin Station
Washington, D.C. 20044-0589
Information you provide is confidential, and you may remain anonymous.File and source
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