The enactment of the Internal Revenue Service Restructuring and Reform Act of 1998 signaled strong congressional concern that the Internal Revenue Service (IRS) had been overemphasizing revenue production at the expense of fairness and consideration of taxpayers. The concern centered on frontline enforcement employees who have face-to-face dealings with taxpayers during the potentially confrontational process of assessing and collecting taxes. In response, the Commissioner of Internal Revenue is seeking to transform the agency’s culture to one that more fully embraces customer service as a core organizational value. The Commissioner began this transformation by replacing IRS’ old mission statement, which emphasized collecting the proper tax at the least cost, with a new one, which emphasizes providing world-class customer service by helping taxpayers understand and meet their tax responsibilities and applying the tax law with integrity and fairness. IRS has begun a number of long-range initiatives to make the new mission statement a reality, including developing new organizational performance measures and revamping the overall performance management system.

In light of this, you asked us to review the extent to which the current employee evaluation system can support the new mission statement during the period IRS will need to revamp its performance management system. Specifically, the objectives for this report are to (1) determine the relative emphasis on revenue production, efficiency, and customer service in enforcement employees’ annual written evaluations; (2) identify features of the evaluation process that might be used to greater advantage to reinforce the importance of customer service; and (3) describe IRS initiatives to promote customer service, including those to encourage enforcement employees to be taxpayer oriented. To address these issues, we analyzed a representative sample of the two most recent enforcement employee evaluations prepared under IRS’ old mission statement for the period ending June 1998. Thus, our results are most appropriately used as baseline data for determining the degree to which supervisors might need to change the way they prepare employee evaluations under the current process to better reflect IRS’ new mission.

Click here for the full GAO Report, PDF Version, 56pgs. 2.4M