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TIGTA Report: IRS Should Make Changes to Remedy Inadequate Assistance to Taxpayers Over Tax Accounts

By:
Ruth Singleton
Published Date:
Mar 24, 2022

TIGTA logo

The Treasury Inspector General for Tax Administration (TIGTA) recently issued a report following an audit initiated because of a backlog of over-aged Accounts Management inventory, which  has been an ongoing challenge for the IRS.

The report found that the closure of the tax processing centers in response to the pandemic significantly increased existing accounts management inventory backlogs.

Among its recommendations, TIGTA  urged the IRS to redirect tax account correspondence from its tax processing centers to its accounts management campus supports sites in order to expedite service to taxpayers. 

It also found that “expanding options for taxpayers to correspond with the IRS electronically can also reduce the time it takes for correspondence to reach Accounts Management. The IRS’s Taxpayer Experience Strategy includes plans to expand services to allow taxpayers to provide documents to the IRS digitally. However, IRS management indicated there is no planned implementation date within Accounts Management.”

The report noted that “many Accounts Management employees split their time between working Accounts Management cases and answering IRS toll-free telephone calls. As call volumes increase, fewer resources are available to work Accounts Management inventory. In the report, TIGTA estimated “that Accounts Management could close all of the cases in its inventory as of October 1, 2021, in approximately seven months if all of its employees were dedicated to working this inventory.” 

In addition, TIGTA found that Accounts Management inventory reporting among the Accounts Management sites is incomplete and inconsistent. 

By way of background, the report noted that the IRS Accounts Management function “is responsible for assisting individual and business taxpayers with tax law and tax account inquiries, including making adjustments to taxpayer accounts when necessary. The Accounts Management function has 10 sites nationwide that work inventory—seven Campus Support Sites and three Tax Processing Centers. Organizationally, Accounts Management is located within the IRS’s Customer Account Services organization, which is part of the IRS’s Wage and Investment Division and is a sister function to the Submission Processing function.” The Campus Support Sites are located in Fresno, Calif.; Atlanta; Andover, Mass.; Brookhaven, N.Y.; Cincinnati; Philadelphia; and Memphis. Accounts Management Tax Processing Centers are located in Kansas City, Mo. Austin, Texas; and Ogden, Utah. 

In the report, TIGTA made 19 recommendations, which appear below. The IRS agreed to 16 of the 19 recommendations—all except Nos. 2, 10 and 19. 

With regard to Recommendation 2— sending tax account correspondence and replies intended for accounts management directly to campus support sites for processing to reduce backlogs at tax processing eenters and improve services to taxpayers— IRS management said it wouldn’t be feasible to obtain the increased staffing needed to move all accounts management correspondence to the campus support sites. Management said that mail clerk and remittance clerk staffing in the campus support sites range from 42 in the smallest site to 142 in the largest and noted that they have been unable to hire enough replacements to backfill annual attrition losses.  

Yet TIGTA”S Office of Audit responded that tax processing centers are facing similar staffing, space and equipment challenges, as the campus support sites. Yet the IRS continues to use tax processing centers to open, extract, sort, and scan accounts management correspondence despite their primary mission being to process tax returns. "This is especially concerning," TIGTA noted, "because IRS management’s response indicates the decision to consolidate mail processing under Submission Processing was made more than a decade ago."

Below are TIGTA's 19 recommendations: 

“Recommendation 1 (E-Mail Alert): On September 20, 2021, we notified the Director, Accounts Management, that the Austin site was not requiring Accounts Management screeners to come into the office to perform their duties, resulting in a significant backlog and delays in inventory being routed to Accounts Management to be worked. We recommended that the IRS establish consistent guidance and clarification on when resources can be directed to the office to help with screening inventory, to ensure that sufficient staff is available to screen documents in a timely manner, and establish processes to monitor the progress. 

Recommendation 2: Evaluate directing taxpayers to send tax account correspondence and replies intended for Accounts Management directly to Campus Support Sites for processing to reduce backlogs at Tax Processing Centers and improve services to taxpayers. 

Recommendation 3: Prioritize the development and implementation of tools that will enable taxpayers seeking assistance or responding to Accounts Management to correspond with the IRS electronically, including the ability to directly upload documents into Accounts Management’s inventory. 

Recommendation 4: The Chief Taxpayer Experience Officer, in conjunction with the Director, IRS NEXT Office, should evaluate establishing two distinct IRS programs as part of the IRS reorganization under the Taxpayer First Act – one dedicated to answering toll-free telephone calls and one dedicated to working Accounts Management inventory – with adequate staffing to provide appropriate service to taxpayers using each channel. 

Recommendation 5 (E-Mail Alert): On June 9, 2021, we notified the Director, Customer Account Services, that Submission Processing requested resources from Accounts Management to assist with clearing the ICT [Image Control Team] backlog and was told by Campus Support management that no resources could be made available to assist with reducing the ICT backlog. We recommended that the IRS assess the availability of Campus Support’s ICT staffing or other resources that could be made available to assist with clearing the ICT backlogs at Tax Processing Centers. 

Recommendation 6 (E-Mail Alert): On September 3, 2021, we notified the Director, Accounts Management, of concerns relating to the newly stood-up Fresno Campus Support Site, including scanners not being used to the full extent possible. We recommended that IRS management provide us with it plans to address our concerns identified with the new Fresno Campus Support Site, including additional staffing to assist ICT.

Recommendation 7: Complete a strategic review of all 10 ICT sites to determine what contributes to the ICT’s inability to timely scan and validate documents. Based on the results of this review, initiate steps to address the concerns identified. This should include the development of an action plan to ensure that the high-capacity ICT scanners and staffing are realigned to the appropriate sites based on actual or expected inventory levels and that responsibility of the ICT operations are consolidated under the appropriate function. 

Recommendation 8: Cross-train additional mail clerks at Campus Support Sites to work ICT validations, freeing up additional resources in sites with higher inventories needing to be scanned, or consider shipping inventory to sites with less inventory to be scanned. Recommendation 9: Develop specific instructions and a common template for all 10 ICT sites to consistently capture ICT inventory information. 

Recommendation 10: Update existing scanning software or obtain a new scanning software to address document capacity concerns.. 

Recommendation 11: Ensure that programming is updated to systemically reject electronic submissions of Forms 2848 and 8821 when missing one of the five essential elements (name, address, signature, etc.) without manually mailing a rejection letter. Recommendation 12: Ensure that the rejection letter used for Forms 2848 and 8821 is updated to include language that a revised form can be submitted electronically via an IRS Tax Pro Account or through Taxpayer Digital Communication.

Recommendation 13: Develop an action plan to prioritize the continued expansion of documents that can be sent in via electronic fax and converted into a CIS image. Recommendation 14: Identify priority work that needs to be expedited by the ICT and assess the feasibility of creating an electronic fax number to receive this inventory. 

Recommendation 15 (E-Mail Alert): On July 12, 2021, we notified the Director, Accounts Management, of concerns regarding inaccuracies as it related to the compiling and reporting of the AMIR. We recommended that the IRS perform a reconciliation of each Accounts Management site’s AMIR to the source reports to identify inventory inconsistencies and reporting errors by site. 

Recommendation 16:  The Commissioner, Wage and Investment Division, should complete the inventory reconciliations for the four remaining Accounts Management site’s to identify and correct inventory inaccuracies and inconsistencies and implement processes to provide oversight by periodically performing reconciliations for each site so that any future inconsistencies and errors are identified and corrected in a timely manner. Recommendation 17: Develop specific and detailed instructions for preparing the AMIR, including how controlled and uncontrolled inventory should be captured. Recommendation 18: Develop a process to systemically pull all controlled inventory for each Accounts Management site for the AMIR to ensure consistency, reduce human error, and increase efficiencies. Recommendation 19: Modify Accounts Management inventory reporting to report unassigned controlled inventory separately on the nationwide AMIR and limit the site-specific AMIRs to only the inventory assigned to be worked in each site.” 

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