Tax Administration

Assessment of IRS' 2001 Tax Filing Season Gao ID: GAO-02-144 December 21, 2001

GAO assessed the Internal Revenue Service's (IRS) performance in the following five key tax filing season activities: (1) processing individual tax returns and refunds, (2) increasing the extent to which individual income tax returns are filed electronically, (3) answering telephone calls and providing quality telephone service, (4) providing accurate and timely face-to-face assistance at its Taxpayer Assistance Centers (TAC), and (5) providing services via the Internet. GAO found that IRS' performance during the 2001 filing season varied. Although there was less information available on which to base a judgement than in past filing seasons, IRS' processing of 130 million individual income tax returns and 94 million refunds in 2001 went smoothly. IRS addressed problems quickly, with relatively minor impact on taxpayers. About 31 percent of all individual income tax returns were filed electronically in 2001--an increase of 13.7 percent compared to 2000. That rate of increase was below IRS' goal of 20 percent and the lowest percentage since 1996. IRS has identified several impediments, but it lacks enough information to determine why about 40 million individual income tax returns were prepared on computers but filed on paper in 2001. IRS has several measures to assess the ability of taxpayers to reach an IRS assistor by telephone and the accuracy of IRS' responses to callers. IRS improved its performance in varying degrees in three of four accessibility measures and met or exceeded two of its four goals for accuracy in 2001. The number of taxpayers assisted at TAC's declined in 2001 because, IRS officials believe, taxpayers made greater use of other forms of assistance, including IRS' website. IRS did not measure the quality of service provided by TACs during the filing season, but a review by the Treasury Inspector General for Tax Administration showed that the accuracy of tax law assistance was poor. Finally, overall usage of IRS' website increased. GAO's assessment of the website found that (1) a key IRS measure for tracking site usage--number of "hits"--is calculated in a way that calls into question the measure's usefulness and (2) the site is usable, but could be more user-friendly.


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