When Congress passed the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (Restructuring Act), it signaled its strong concern that IRS was not affording taxpayers the protection and rights they deserved. As you requested, we are studying IRS’ implementation of the Restructuring Act. We will issue separate reports covering various aspects of the implementation. This report describes the status of IRS’ implementation of the taxpayer protection and rights provisions in title III of the act, which require IRS to treat taxpayers fairly. Also, this month, we are issuing a report on IRS’ implementation of the personnel flexibility provisions in title I of the Restructuring Act, which are, in part, also intended to help IRS ensure that taxpayers are treated fairly.

As agreed with your office, the objectives of this report are to (1) describe the status of IRS’ implementation of the Restructuring Act’s title III provisions and (2) determine what, if any, tax administration or other concerns IRS has identified in implementing these provisions. To fulfill these objectives, we interviewed IRS officials at the national, regional, and local levels with responsibility for implementing the provisions. We supplemented the information they provided with information from relevant documents, IRS’ database on taxpayer service initiatives, and related studies by IRS and the Treasury Inspector General for Tax Administration (TIGTA). As agreed with your staff, we relied on information provided by IRS and did not assess the effectiveness of the taxpayer protection and rights provisions of the act. We did, however, check information from different sources for consistency. This report shows the status of IRS’ implementation through January 31, 2000.

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