GAO Report Shows Success of IRS Problem Solving Days

A November Government Accounting Office report, prepared at the request of Senate Finance Committee Chair William Roth, illustrates the success of the Internal Revenue Service's Problem Solving Days (PSDs), which the IRS instituted partly in response to the 1997 congressional oversight hearings.

The GAO noted that 22,000 taxpayers were assisted at PSD events between November 1997 and July 1998, where on designated days each month, taxpayers visited their local IRS office to clear up problems they have had with the agency. The agency incurred $11.5 million in incremental program costs due to such expenses as additional salaries, rent, and installation of computers.

An IRS review of the types of problems taxpayers sought to solve identified four areas: penalties, audit reconsiderations, installment agreements, and compromise offers. The IRS set up task forces to identify actions that the agency could take to reduce problems in these areas in the future.

Overall, the GAO concluded that the Problem Solving Days initiative was favorably received. The report notes that IRS officials felt "an important lesson learned was that taxpayers with ongoing tax problems wanted to discuss them face-to-face with IRS staff to finally get their problems resolved." IRS staff also noted the effectiveness of the "cross-functional approach to problem solving."

GAO surveys of taxpayers showed that 91 percent of participants believed PSDs are a good idea. While the report found that only 34 percent indicated their problems had been fully resolved, IRS Commissioner Charles O. Rossotti, in a November speech before the Council on Economic Development, said he feels the program is an important initiative for transforming the agency's mission with a greater focus on improving taxpayer service. He points out that more than 32,000 people participated in PSDs in 1998 and he expects more to attend events this year. The IRS currently plans to hold PSDs through April 1999, at which time the agency will assess whether it should continue.