Managing IRS

GAO evaluated the Internal Revenue Service's (IRS) management systems and administrative support functions to determine its effectiveness in: (1) preparing for the future; (2) providing quality service in an effective manner; (3) maintaining workforce quality during a period of rapid change; and (4) ensuring a strong system of clear management accountability for its actions.

GAO found that: (1) the most critical long-term challenge IRS had was to effectively modernize its computer-based tax processing system, since the system was outdated and not capable of meeting the growing IRS workload; (2) IRS modernization efforts were slow due to ineffective management and changes in leadership; (3) although IRS had pursued four different proposed modernization plans, none had progressed beyond the planning stage because of a lack of leadership in information resources management; (4) although IRS designated a senior executive as the information resources focal point, he had other responsibilities that precluded him from devoting his full attention to this area; and (5) although IRS initiated a strategic management process to help set agencywide goals, establish mission priorities, and create a benchmark, it lacked effective methods to measure and monitor its progress toward achieving plan objectives, obtaining congressional concurrence, and ensuring consistency with its budget requests. GAO also found that: (1) IRS was concerned about its capacity to effectively deal with the public and attract and retain quality employees; (2) IRS could not offer salaries sufficiently competitive with the private sector to attract quality employees; (3) over half of the surveyed IRS senior executives would be eligible to retire before 1993, and 60 percent indicated that they would leave within a year of eligibility; (4) IRS spent considerable time and effort correcting tax return errors instead of preventing problems from reaching the public; and (5) although IRS initiated processes to improve its quality, it lacked the sustained management commitment to maintain quality at a daily operating level. In addition, GAO found that: (1) IRS revenue and administrative accounting operations had internal control weaknesses that produced inaccurate and untimely information; and (2) although IRS has reinstituted the National Office Review Program (NORP), the program's lack of independence and performance measures could hinder its effectiveness.

Recommendations

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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