Customer Service Standards -- Internal Revenue Service

Customer Service Performance Standards--Internal Revenue Service

BACKGROUND

The Internal Revenue Service (IRS) faces a host of big issues in the
1990s. The Service feels budget deficit pressure to improve collections.
A one percent increase in voluntary compliance equals $7 billion in
annual revenue, but IRS believes that the number of people choosing not
to file is growing. In addition, the service holds over $100 billion in
gross receivables, all of which must be managed in order to recover even
a fraction of it. Besides all this, IRS is awash in paper, handling 1.7
billion pieces annually. Plans are for a major systems modernization to
deal with the paper flood.

Major support for the overall plans of IRS comes from an established,
internal Total Quality Management program that is intended to improve
productivity.  Moreover, the IRS refers to its recently developed
strategic plan as a business plan and refers to taxpayers as
customers.[Endnote 1] IRS is empowering employees in pilot projects that
are improving productivity, winning quality awards, and have a strong
customer-first flavor. It is also trying out pilot accounting systems
that focus on outputs and remove line item controls in budgets.[Endnote
2]

The IRS fosters competition among tax return centers, shifting work
loads to those showing the highest productivity. New job opportunities
accompany the shift in workload.

The very poor marks given IRS by the General Accounting Office (GAO) and
others for phone support are improving. In 1989, one out of three
callers got incorrect answers.[Endnote 3] GAO accepts IRS testing that
says in 1992 the IRS gave the right answer to taxpayer questions 88
percent of the time.[Endnote 4]


NEED FOR CHANGE

The shift to a customer-driven mentality is well under way at the IRS.
The overall IRS mission statement has a customer service flavor: "serve
the public by continually improving products and services.''[Endnote 5]
Its products are tax forms and notices. Service includes phone support.

The key objectives of IRS all have a customer dimension:

--Reduce taxpayer burden,

--Increase voluntary compliance, and

--Improve productivity and customer satisfaction.

IRS is planning to measure success against these objectives. It is
already starting to survey customers. They give high ratings for
timeliness of tax forms delivery and poor ratings for product clarity
and support.

In another step forward, IRS is increasing the authority of front-line
employees to negotiate resolution of issues with taxpayers. This
supports its stated goal of resolving a person's tax issues in one IRS
contact.

The time to issue refunds is central to customer service at IRS. After
IRS finishes processing a return, it creates a computer tape notifying
the Financial Management Service (FMS) that this and other refunds are
due. The tape is then flown to FMS.  FMS processes the tape and issues a
refund. Ten days elapse from the time the tape is made until a refund
goes out. Transmitting refund information electronically and giving at
least selected disbursing authority to IRS might cut this time.


Endnotes

1. See U.S. Department of the Treasury, Internal Revenue Service (IRS),
Strategic Business Plan FY-93 and Beyond (Washington, D.C., September
1992).

2. See U.S. Department of the Treasury, Internal Revenue Service, "Cost
Management System, Cincinnati Service Center," Washington, D.C.,
February 1993.

3. See U.S. General Accounting Office, Monitoring the Accuracy and
Administration of IRS' 1989 Test Call Summary, GAO/GGD-90-36
(Washington, D.C.: U.S.  General Accounting Office [GAO], 1990).

4. U.S. General Accounting Office, IRS' Budget Request For Fiscal Year
1994, GAO/T-GGD-93-23 (Washington, D.C.: GAO, 1993).

5. See IRS, Strategic Business Plan FY 1993 and Beyond.