As Tax-Filing Season Gives Rise to Audits, IRS Itself Flunks Government Review

Press Release April 12, 2006

Washington, D.C.—With the end of the tax-filing season only five days away, the leader of the union representing Internal Revenue Service (IRS) employees said taxpayers should “find it alarming in the extreme” that the IRS itself has failed—and miserably so—two audits by the Treasury Inspector General for Tax Administration (TIGTA) regarding its customer service operations.

“These audits highlight critical information and decision-making flaws in the operation of this vital agency,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU). “The IRS is basing its decisions about serving taxpayers on bad or nonexistent data,” she said.

First, Kelley said, a TIGTA analysis of the IRS decision-making process in the agency’s failed effort to close 68 of its Taxpayer Assistance Centers (TACs) showed the IRS’s work to be so shoddy that TIGTA said it was “unable to determine the effect TAC closings would have on compliance”—thus preventing the Inspector General from fulfilling a mandate given to it by Congress.

Then, the NTEU leader said, a follow-up TIGTA audit—the second of three planned reports by TIGTA on IRS customer service cutbacks—showed that despite a congressional mandate preventing the IRS from closing any of its TACs during the 2006 filing season, the agency apparently continues to consider such closings as a cost-cutting measure.

The proposed fiscal 2007 budget for the IRS calls for major—but as-yet unspecified—cuts in customer service, despite the clear and growing congressional sentiment against such actions.

“Either the agency isn’t getting that message or is choosing to ignore it,” President Kelley said.

The IRS TAC-closing plan was shelved last year after an NTEU-led campaign that generated nationwide outrage in opposition to the move, which would have most hurt lower income and elderly taxpayers, those for whom English is not their primary language, and those with either limited or no access or familiarity with the Internet.

The IRS is pressuring taxpayers to move to its Internet web site and away from personal service, either in its walk-in centers or on the telephone.

“These two TIGTA reports show clearly that the IRS doesn’t have even the information it needs to provide adequate oversight of its TAC operations—much less make a supportable decision to close any of them,” Kelley said.

In its latest report, TIGTA said the IRS Field Assistance Office fails to maintain an overall list or database of TACs, providing the number of available assistors, the hours and days of operations, and the services offered at each location. Obtaining that information from separate places within the IRS, TIGTA said, “showed the data are unreliable, inconsistent and inaccurate.”

It appears, the NTEU leader said, that the IRS—in making it harder for taxpayers to use the TACs by reducing hours and services and by failing to fully staff the facilities—is pursuing a strategy that would result in a self-fulfilling prophesy. Fewer services and less staff will necessarily result in fewer taxpayers using the TACs. Kelley called such a strategy “backhanded” and “disgraceful.”

NTEU is the largest independent federal union, representing some 150,000 federal workers in 30 agencies and departments, including 90,000 in the IRS.

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