Tax Administration

IRS Can Strengthen Its Efforts to See That Taxpayers Are Treated Properly Gao ID: GGD-95-14 October 26, 1994

Several initiatives have been undertaken in recent years to better protect taxpayers--particularly the enactment of the Taxpayer Bill of Rights in 1988 and the Internal Revenue Service's (IRS) continuing efforts to improve its operations and treat taxpayers as customers. IRS also has a wide range of procedures and oversight governing the behavior of its employees in the millions of contacts they have with taxpayers each year. However, because IRS has failed to define or track taxpayer abuse, it is hard to assess IRS efforts to protect taxpayers from abusive enforcement, unnecessarily long conflict resolution, or unauthorized "snooping" into taxpayers' files.

GAO found that: (1) although IRS has undertaken several initiatives to prevent taxpayer abuse, evidence of abuse remains; (2) IRS has implemented a wide range of controls, processes, and oversight offices to govern staff behavior in their contacts with taxpayers; (3) IRS needs to better define taxpayer abuse and develop management information about its frequency and nature so that it can strengthen abuse prevention procedures, and identify and minimize the frequency of future abuses, and Congress can better evaluate IRS performance in protecting taxpayers' rights; (4) IRS needs to strengthen its controls and procedures to reduce unauthorized access to computerized tax information by IRS employees, inappropriate selection of tax returns during information gathering projects, embezzlement of taxpayers' cash payments, questionable trust fund recovery penalties, and information-handling problems that contribute to taxpayer frustration; (5) proposed taxpayer protection legislation would aid IRS in providing taxpayers with information needed to better deal with trust fund recovery penalties; (6) the allegation of potential abuse involving possible improper contacts with IRS by White House staff was unfounded; (7) the White House has provided explicit guidance for its staff regarding IRS contacts and IRS should improve its procedures for handling White House contacts; and (8) although Congress may not need to provide additional appropriations to IRS to prevent taxpayer abuse, additional appropriations may be needed to resolve IRS information-handling problems as part of its Tax Systems Modernization (TSM) program.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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