IRS ‘good but not great,’ panel says
The Internal Revenue Service’s modernization efforts have solved some taxpayer problems and created new ones, said the IRS Oversight Board in its annual review of IRS performance.
“The IRS should not settle for good performance — it must set its sights on great performance,” Paul Cherecwich, chairman of the IRS Oversight Board, said in the board’s annual report released April 14.
The agency has improved taxpayer service by setting goals, re-engineering processes and measuring performance, but that is not enough, Cherecwich said. The IRS must deliver more self-service applications to assist taxpayers and perform research to gain a better understanding of taxpayers’ needs and expectations, he added.
The report highlighted steps the IRS has taken to protect taxpayer data, promote electronic filing of returns and transition taxpayer accounts to a modern database.
The IRS has adopted an agencywide approach to dealing with growing data security and data privacy concerns. Last summer, it created an Office of Privacy, Information Protection and Data Security. The agency updated its procedures to ensure that it responds consistently to people who are victims of identity theft.
The IRS now uses an identity theft indicator to tag the accounts of taxpayers whose identities have been stolen. The tag alerts IRS employees that those accounts might require special attention. Before the IRS adopted tagging as a policy, employees had no means of systematically identifying taxpayers who were victims of identity theft.
“Once the new process is fully deployed, taxpayers should only have to provide identity theft documentation once,” IRS Commissioner Douglas Shulman said.
The IRS also made progress on modernizing taxpayer accounts. The oversight board noted that the IRS’ new Customer Account Data Engine, a modern taxpayer account database, will allow the agency to update taxpayer accounts daily rather than weekly. That capability will speed problem resolution.
Through March, the IRS had processed 15.1 million tax returns, or 25 percent, using its Customer Account Data Engine compared with 11.2 million returns during all of last year’s tax season, said Richard Spires, IRS deputy commissioner of operations support. The agency anticipates that all individual taxpayer accounts will be migrated to CADE by 2012.
On another performance benchmark — e-filing — the oversight board disagreed with the IRS’ National Taxpayer Advocate and some members of Congress who want the agency to provide direct e-filing free to all taxpayers. Increasing the rate of e-filing to 80 percent of tax returns by 2012 is a critical agency goal, Cherecwich said.