TIGTA Report Shows Shoddy Work by IRS In Critical Customer Service Decision-Making

Press Release March 24, 2006

Washington, D.C.—The Internal Revenue Service (IRS) performed such shoddy work in seeking to justify its failed decision last year to close 68 of its Taxpayer Assistance Centers (TACs) that the Treasury Inspector General for Tax Administration (TIGTA) subsequently was unable to meet its congressional mandate to determine the impact such closings would have on taxpayer compliance.

“I find it amazing and disappointing,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU), “that the IRS would base what in essence are life-changing decisions for employees and critical compliance assistance for taxpayers on guesses and estimates.”

That extends to the key matter of potential cost savings from the planned closings. TIGTA’s report said the IRS employee asked to provide potential rental cost savings was given a mere two hours in which to come up with the information. The data were not readily available, however, and the employee had only estimates for square footage and costs per square foot from which to calculate potential rental cost savings.

In another example, TIGTA pointed out that the employee assigned to provide TAC workload information had only a single day to gather it. “Because of these time constraints,” TIGTA said, “the data included in the (IRS) model were not validated before or after being input into the model.”

“Clearly, it wasn’t possible for the IRS to have a realistic grasp of the impact on taxpayers of these planned closings,” President Kelley said.

The TIGTA revelations are in direct contrast to IRS statements of a year ago. In testimony last May, IRS Commissioner Mark Everson told the annual Joint Congressional Review of the IRS that the agency had “developed a criteria model that measures the impact on taxpayers across the country” of the proposed TAC closings. He repeated that statement during at least two other congressional testimonies.

That’s certainly not how TIGTA saw it. In its report earlier this week, TIGTA said that “because reliable information was not available, we were unable to determine the effect TAC closings might have on compliance.” The TIGTA report was also incomplete in another key aspect: Congress required the inspector general to examine the impact on taxpayers of all IRS service cutbacks, including reductions in the hours of telephone service and the closure of some call sites.

Thus, the IRS’s slipshod work in trying to justify a policy decision it already had made, Kelley said, has prevented TIGTA from fulfilling its congressional mandate to analyze and report on the impact of such cutbacks.

“Fortunately for taxpayers,” Kelley said, “NTEU members and chapters across the country understood and communicated the potentially devastating impact” of closing the TACS. NTEU led a determined fight against the proposed closings, generating widespread support from members of Congress as well as public interest advocacy groups—finally forcing the IRS to suspend the plan.

“The successful watchdog role of NTEU and its members on behalf of the best interests of America’s taxpayers can’t be overstated,” the union leader said. President Kelley also repeated her call for TIGTA to go back and rework its report on the full extent of customer service cutbacks at the IRS on both taxpayer assistance and compliance.

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

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