Tax Administration
Data on the Effects of the Economic Stimulus Program on the Internal Revenue Service's Telephone Service and Costs Gao ID: GAO-08-916T June 19, 2008The purpose of this testimony is to provide information on the effects of the Economic Stimulus Act of 2008 on the Internal Revenue Service's (IRS) telephone service and costs. As Congress knows, the recent passage of this legislation created additional, unanticipated workload for IRS and required IRS to act quickly to deal with the public's questions and begin issuing payments. The public's questions cover a variety of issues. Millions of Americans who otherwise were not required to file a tax return are eligible for stimulus payments and must file a return to claim their payment. The amount of payment varies from household to household. The schedule for receiving payments depends on individual Social Security numbers, and how and when people filed. As part of our ongoing assessment of IRS's tax filing season performance, requested by this subcommittee and others, we have been monitoring IRS's implementation of the economic stimulus legislation. Because of its importance, Congress requested that we provide information on the effects of the economic stimulus legislation on the public's ability to get questions answered by IRS and IRS's estimates of the costs of implementing the legislation.
Demand for telephone assistance related to the economic stimulus legislation has been unprecedented, according to IRS. For the week ending May 24, volume was almost six times greater than the same week last year. Despite reallocating staff from collections work to answering stimulus-related calls, the percent of callers waiting to speak with an assistor who got through has declined markedly to 39 percent for the week ending May 24 compared to 80 percent for the same week last year. The costs for implementing the economic stimulus legislation may be up to $862 million. IRS received a supplemental appropriation of $202 million for implementing the economic stimulus legislation. The Social Security Administration received a supplemental of $31 million and the Financial Management Service received a supplemental of $64 million. The reallocation of hundreds of IRS collections staff to answering taxpayer telephone calls will also result in up to $565 million in foregone enforcement revenue, according to IRS estimates. These costs are in addition to the significant reduction in IRS's telephone service.
GAO-08-916T, Tax Administration: Data on the Effects of the Economic Stimulus Program on the Internal Revenue Service's Telephone Service and Costs
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Stimulus Program on the Internal Revenue Service's Telephone Service
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Testimony:
Before the Subcommittee on Oversight, Committee on Ways and Means,
House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 10:00 p.m. EDT:
Thursday, June 19, 2008:
Tax Administration:
Data on the Effects of the Economic Stimulus Program on the Internal
Revenue Service's Telephone Service and Costs:
Statement for the Record by James R. White:
Director, Strategic Issues:
GAO-08-916T:
Mr. Chairman and Members of the Subcommittee:
We appreciate this opportunity to provide information on the effects of
the Economic Stimulus Act of 2008 on the Internal Revenue Service's
(IRS) telephone service and costs. [Footnote 1]
As you know, the recent passage of this legislation created additional,
unanticipated workload for IRS and required IRS to act quickly to deal
with the public's questions and begin issuing payments. The public's
questions cover a variety of issues. Millions of Americans who
otherwise were not required to file a tax return are eligible for
stimulus payments and must file a return to claim their payment. The
amount of payment varies from household to household. The schedule for
receiving payments depends on individual Social Security numbers, and
how and when people filed. As part of our ongoing assessment of IRS's
tax filing season performance, requested by this subcommittee and
others, we have been monitoring IRS's implementation of the economic
stimulus legislation. Because of its importance, you requested that we
provide information on the effects of the economic stimulus legislation
on the public's ability to get questions answered by IRS and IRS's
estimates of the costs of implementing the legislation.
To meet these objectives, we drew upon and updated recently issued
products.[Footnote 2] We conducted the current performance audit from
April 2008 through June 2008 in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
We did not assess the quality of IRS's cost estimate for foregone
revenue, but in our April 16, 2008, testimony we described how IRS
developed the estimate. For a more detailed discussion of our scope and
methodology, see the appropriate sections in the cited products.
In summary, we make the following two points:
* Demand for telephone assistance related to the economic stimulus
legislation has been unprecedented, according to IRS. For the week
ending May 24, volume was almost six times greater than the same week
last year. Despite reallocating staff from collections work to
answering stimulus-related calls, the percent of callers waiting to
speak with an assistor who got through has declined markedly to 39
percent for the week ending May 24 compared to 80 percent for the same
week last year.
* The costs for implementing the economic stimulus legislation may be
up to $862 million. IRS received a supplemental appropriation of $202
million for implementing the economic stimulus legislation. The Social
Security Administration received a supplemental of $31 million and the
Financial Management Service received a supplemental of $64 million.
The reallocation of hundreds of IRS collections staff to answering
taxpayer telephone calls will also result in up to $565 million in
foregone enforcement revenue, according to IRS estimates. These costs
are in addition to the significant reduction in IRS's telephone
service.
Please refer to appendix I for information that provides details on
IRS's telephone service and costs of implementation.
Agency Comments:
IRS officials provided technical comments for this statement and we
made changes where appropriate.
Contacts and Acknowledgments:
For further information regarding this testimony, please contact James
R. White, Director, Strategic Issues, on (202) 512-9110 or
whitej@gao.gov. Contact points for our offices of Congressional
Relations and Public Affairs may be found on the last page of this
statement. Individuals making key contributions to this testimony
include Joanna Stamatiades, Assistant Director; Shea Bader; Julia Jebo;
Cheryl M. Peterson; and Neil A. Pinney.
[End of section]
Appendix I: Data on the Effects of the Economic Stimulus Program:
Table 1: IRS Call Volume and Telephone Performance:
Call volume (millions): Assistor calls answered;
Cumulative totals (Jan. 1-May 24) 2008: 21.91;
Cumulative totals (Jan. 1-May 24) 2007: 18.33;
Weekly totals (May 18-24) 2008: 1.13;
Weekly totals (May 18-24) 2007: 0.69.
Call volume (millions): Automated calls completed;
Cumulative totals (Jan. 1-May 24) 2008: 21.40;
Cumulative totals (Jan. 1-May 24) 2007: 10.26;
Weekly totals (May 18-24) 2008: 2.28;
Weekly totals (May 18-24) 2007: 0.18.
Call volume (millions): IRS disconnects or busy;
Cumulative totals (Jan. 1-May 24) 2008: 8.67;
Cumulative totals (Jan. 1-May 24) 2007: 1.02;
Weekly totals (May 18-24) 2008: 1.61;
Weekly totals (May 18-24) 2007: 0.04.
Call volume (millions): Caller abandons;
Cumulative totals (Jan. 1-May 24) 2008: 23.14;
Cumulative totals (Jan. 1-May 24) 2007: 11.22;
Weekly totals (May 18-24) 2008: 2.47;
Weekly totals (May 18-24) 2007: 0.39.
Telephone performance: Percent of callers waiting for an assistor who
got through;
Cumulative totals (Jan. 1-May 24) 2008: 63.03;
Cumulative totals (Jan. 1-May 24) 2007: 82.37;
Weekly totals (May 18-24) 2008: 38.82;
Weekly totals (May 18-24) 2007: 80.12.
Telephone performance: Average wait time (minutes);
Cumulative totals (Jan. 1-May 24) 2008: 7.1;
Cumulative totals (Jan. 1-May 24) 2007: 4.2;
Weekly totals (May 18-24) 2008: 12.3;
Weekly totals (May 18-24) 2007: 4.9.
Source: GAO analysis of IRS data. Notes: IRS set up a dedicated
stimulus hotline and gets stimulus calls on other lines too. As of May
28, 2008, IRS has processed 65 million payments for $56 billion.
[End of table]
Figure 1: IRS Toll-free Calls and Percent of Callers Waiting for an
Assistor Who Got Through (January through May 2008):
[See PDF for image]
This figure is a combination line and stacked vertical bar graph,
depicting the following data [weekly calls on IRS's individual tax
information lines (millions)]:
Week ending: January 5;
Assistor calls answered: 0.33 million;
Automated calls completed: 0.05 million;
IRS disconnects or busy: 0.03 million;
Caller abandons: 0.17 million;
Percent of callers waiting for an assistor who got through: 77.
Week ending: January 12;
Assistor calls answered: 0.57 million;
Automated calls completed: 0.12 million;
IRS disconnects or busy: 0.01 million;
Caller abandons: 0.26 million;
Percent of callers waiting for an assistor who got through: 85.
Week ending: January 19;
Assistor calls answered: 0.7 million;
Automated calls completed: 0.45 million;
IRS disconnects or busy: 0.02 million;
Caller abandons: 0.37 million;
Percent of callers waiting for an assistor who got through: 86.
Week ending: January 26;
Assistor calls answered: 0.7 million;
Automated calls completed: 0.95 million;
IRS disconnects or busy: 0.02 million;
Caller abandons: 0.45 million;
Percent of callers waiting for an assistor who got through: 84.
Week ending: February 2;
Assistor calls answered: 1.01 million;
Automated calls completed: 1.38 million;
IRS disconnects or busy: 0.05 million;
Caller abandons: 0.72 million;
Percent of callers waiting for an assistor who got through: 82.
Week ending: February 9;
Assistor calls answered: 1.06 million;
Automated calls completed: 1.95 million;
IRS disconnects or busy: 0.05 million;
Caller abandons: 0.87 million;
Percent of callers waiting for an assistor who got through: 80.
Week ending: February 16;
Assistor calls answered: 1.07 million;
Automated calls completed: 2.08 million;
IRS disconnects or busy: 0.05 million;
Caller abandons: 0.79 million;
Percent of callers waiting for an assistor who got through: 82.
Week ending: February 23;
Assistor calls answered: 0.85 million;
Automated calls completed: 2.11 million;
IRS disconnects or busy: 0.17 million;
Caller abandons: 1.1 million;
Percent of callers waiting for an assistor who got through: 60.
Week ending: March 1;
Assistor calls answered: 1.13 million;
Automated calls completed: 1.79 million;
IRS disconnects or busy: 0.06 million;
Caller abandons: 0.78 million;
Percent of callers waiting for an assistor who got through: 81.
Week ending: March 8;
Assistor calls answered: 1.02 million;
Automated calls completed: 1.49 million;
IRS disconnects or busy: 0.03 million;
Caller abandons: 0.65 million;
Percent of callers waiting for an assistor who got through: 83.
Week ending: March 15;
Assistor calls answered: 1.08 million;
Automated calls completed: 1.36 million;
IRS disconnects or busy: 0.03 million;
Caller abandons: 0.65 million;
Percent of callers waiting for an assistor who got through: 84.
Week ending: March 22;
Assistor calls answered: 1.15 million;
Automated calls completed: 1.13 million;
IRS disconnects or busy: 0.03 million;
Caller abandons: 0.7 million;
Percent of callers waiting for an assistor who got through: 84.
Week ending: March 29;
Assistor calls answered: 1.43 million;
Automated calls completed: 1.24 million;
IRS disconnects or busy: 0.04 million;
Caller abandons: 1.04 million;
Percent of callers waiting for an assistor who got through: 77.
Week ending: April 5;
Assistor calls answered: 1.32 million;
Automated calls completed: 0.98 million;
IRS disconnects or busy: 0.04 million;
Caller abandons: 0.91 million;
Percent of callers waiting for an assistor who got through: 78.
Week ending: April 12;
Assistor calls answered: 1.4 million;
Automated calls completed: 0.94 million;
IRS disconnects or busy: 0.06 million;
Caller abandons: 0.88 million;
Percent of callers waiting for an assistor who got through: 80.
Week ending: April 19;
Assistor calls answered: 1.26 million;
Automated calls completed: 1.09 million;
IRS disconnects or busy: 0.49 million;
Caller abandons: 1.3 million;
Percent of callers waiting for an assistor who got through: 56.
Week ending: April 26;
Assistor calls answered: 0.98 million;
Automated calls completed: 0.95 million;
IRS disconnects or busy: 0.04 million;
Caller abandons: 0.7 million;
Percent of callers waiting for an assistor who got through: 78.
Week ending: May 3;
Assistor calls answered: 1.29 million;
Automated calls completed: 2.11 million;
IRS disconnects or busy: 0.34 million;
Caller abandons: 1.83 million;
Percent of callers waiting for an assistor who got through: 56.
Week ending: May 10;
Assistor calls answered: 1.19 million;
Automated calls completed: 3.41 million;
IRS disconnects or busy: 2.49 million;
Caller abandons: 2.9 million;
Percent of callers waiting for an assistor who got through: 32.
Week ending: May 17;
Assistor calls answered: 1.23 million;
Automated calls completed: 3.67 million;
IRS disconnects or busy: 3 million;
Caller abandons: 3.6 million;
Percent of callers waiting for an assistor who got through: 32.
Week ending: May 24;
Assistor calls answered: 1.13 million;
Automated calls completed: 2.84 million;
IRS disconnects or busy: 1.61 million;
Caller abandons: 2.46 million;
Percent of callers waiting for an assistor who got through: 39.
Source: GAO analysis of IRS data.
[End of figure]
Table 2: Costs of Implementing the Economic Stimulus Package:
Supplemental appropriation: IRS (e.g., postage, technology support, and
printing);
Dollars in millions: $202.
Supplemental appropriation: Social Security Administration and
Financial Management Service;
Dollars in millions: $95.
IRS estimates of foregone revenue from reallocating collections staff;
Dollars in millions: Up to $565.
Total;
Dollars in millions: Up to $862.
Taxpayers' Costs;
Dollars in millions: Reduced access to IRS's telephone assistors (see
above).
Source: GAO analysis of IRS data.
[End of table]
[End of section]
Footnotes:
[1] Pub. L. No. 110-185 (2008).
[2] GAO, Internal Revenue Service: Assessment of the Fiscal Year 2009
Budget Request, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-
620T] (Washington, D.C.: Apr. 16, 2008), and GAO, Internal Revenue
Service: Fiscal Year 2009 Budget Request and Interim Performance
Results of IRS's 2008 Tax Filing Season, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-08-567] (Washington, D.C.: Mar.
13, 2008).
[End of section]
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