Sunday, May 11, 2008

IRS Workers Can’t Answer Tax Questions

IRS Workers Can’t Answer Tax Questions
Taxpayers Seeking Help Often Received Wrong Advise 5/15/2001
By Fowler W. Martin

The Wall Street Journal Page B7L
(Copyright © 2001, Dow Jones & Company, Inc.)

WASHINGTON – Internal Revenue Service employees charged with helping taxpayers at walk-in sites
around the U.S. provided incorrect or insufficient answers 73% of the time during a recent survey period,
according to a report released last week by the Treasury Inspector General for Tax Administration.
In one sample question, involving an employment-related sale of a primary residence, a taxpayer could
have erroneously paid an extra $4,000 in tax if the guidance provided by an IRS employee had been
followed, the report said.
The report, dated May 1, was based on anonymous visits by Tigta employees to 47 of the IRS’s more
than 500 Taxpayer Assistance Centers nationwide during a two-week period beginning Jan. 29.
According to the IRS, the centers were undermanned during that period and didn’t reach a more
adequate level of staffing until March 16, but even then, the agency conceded, training wasn’t always
The IRS, too, anonymously checked 544 centers, half before and half during the first half of the 2001filing
season, and found only 50% of tax-law questions were answered correctly. Moreover, service was less
than courteous during one out of every five visits, the agency discovered.
The repot found that taxpayers seeking help were sometimes denied service, told to return at other times
or on other days, had to wait excessive lengths of time to obtain help and were occasionally subjected to
IRS practices that may have confused, embarrassed or angered them.
In response to the inspector general’s findings, John M. Dalrymple, who heads the new IRS division
responsible for dealing with individual taxpayers, said the report “highlights a problem that we have
identified, and one we are committed to addressing,” Mr. Dalrymple said the IRS is boosting staff at the
walk-in centers and has created a new position, Taxpayer Resolution Representative, that is being filled
with more highly skilled employees. Service should be “markedly” improved by the 2002 filing season,
the executive said.
The report said IRS employees provided wrong answers because they generally failed to consult the
appropriate manual when answering questions and because assisters appeared reluctant to seek help
from agency specialists when they didn’t know the answer to a question.
Moreover, some agency employees failed to properly identify themselves, or even provided false
identification to taxpayers, thereby breaking the law, the report said.
Since over nine million taxpayers visited walk-in sites during the fiscal year ended Sept.30, 2000,
incorrect answers by IRS employees at such locations could be a significant source of erroneous tax
returns, the report said. “Also, we believe that situations like this will further drive taxpayers who currently
prepare their own tax returns to use paid tax practitioners,” the inspector general said.
The problems the inspector general identified weren’t concentrated in any particular part of the country.
“IRS employees consistently provided incorrect and insufficient answers to our questions nationwide,” the
report said.

In general, the report provided a sobering litany of behavior the IRS claims it has been seeking to
eliminate as part of a new effort to better serve taxpayers and survey demonstrated that agency training
efforts have a long way to go.
For instance, the IRS has prepared a special manual, called the Probe and Response Guide, and when
the assisters used it, they achieved a much higher rate of success, the report found. But during the
survey, the manual (or the techniques it lays out) was used on 18% of the time and referrals to more
knowledgeable IRS employees were made only 17% of the time.
Mr. Dalrymple said the Probe and Response Guide was designed for telephone help. Walk-in assisters
have neither computer access to the electronic version of the manual (which points to another IRS
shortcoming) or space on their desks for the printed version, he said. Moreover, the IRS didn’t require
that employees consult the guide.
Mr. Dalrymple said the IRS planned to mandate use of the manual beginning this year, but was unable to
discuss a new version of the document suitable for walk-in centers with the National Treasury Employees
Union, which represents most IRS workers, until October 2000 – too late to produce it for the 2001 tax-
return filing period.
He also said the IRS plans to incorporate Probe and Response methodologies in publications the IRS
provides to taxpayers so they can answer more questions themselves, the Tigta found the walk-in centers
it visited were sometimes out of agency publications.
The inspector general’s report also suggested many taxpayers visit walk-in centers because they want
personal help and are frustrated when IRS employees just give them printed material to read. In one
instance, a Tigta surveyor who had waited an hour and a half for help “was told to read a stack of
publications” and to “do her homework,” the report said.
On the question of wait times, the report said the IRS has “de- emphasized the value of prompt customer
In the past, the IRS has a wait-time goal of 15 minutes at its walk-in centers, but abandoned that target
for 2001 on the grounds that it “contributed to the inefficient use of resources,” the report said. In 15 of
the 90 visits carried out in connections with the survey, Tigta employees were forced to wait from 30
minutes to over an hour, the report said.
“In our opinion, this is another situation in which the IRS will really drive low-to-middle income taxpayers
who currently prepare their own returns to use paid tax practitioners,” the inspector general said.
In a separate report also released last week, Tigta said the IRS didn’t properly review potentially
inaccurate notices last year before they were sent to taxpayers, at least in part because management of
the program was lax at the national level.
The IRS generated about 124 million notices to taxpayers from January through September 2000 to
inform them of taxes, interest and penalties due; errors on their tax returns; or an adjusted refund. Before
they were sent, a computer program designed to identify potentially erroneous communications screened
out 4.1 million.
Although IRS operating guidelines call for review of all questionable communications before they are
mailed, Tigta said it discovered 539,852 letters “identified as having a high potential for error” that weren’t
checked before being mailed.
“If the error rate for these notices were consistent with that found on notices that were reviewed, IRS may
have incorrectly notified 80,702 individual taxpayers about an additional tax liability, an error on their
return, or an adjustment to their account,” the inspector general said.

Tigta said that while it didn’t attempt to analyze program staffing levels, its auditors were advised by IRS
executives that the IRS didn’t have sufficient manpower to work the entire inventory of potentially
erroneous notices.
Among other things, the inspector general discovered the IRS had different rules for reviewing refund
notices that notices involving taxes due or other situations.
“Guidelines indicated that when less than 100% of the refund notices could be reviewed, refund notices
with the highest anticipated error rate should have been worked first. However, no such priority was
established for notices that didn’t involve a refund,” the report said.

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