GAO discussed the Internal Revenue Service's (IRS) efforts to make its organization, operations, and processes more effective and efficient and improve customer service. GAO noted that: (1) during the past 4 years, IRS has made some progress in modernizing its operations to reflect its business vision; (2) although IRS has taken some actions to increase the number of electronic returns filed, it does not have a comprehensive strategy to reach its electronic filing goal by 2001; (3) IRS has consolidated the processing of paper returns in those centers with the Service Center Recognition Image Processing System (SCRIPS), but SCRIPS is performing well below IRS original expectations; (4) IRS faces several challenges in implementing its customer service vision; (5) a key IRS goal is to resolve 95 percent of taxpayer inquiries after one contact; (6) IRS strategy for improving customer service includes consolidating work units, changing work processes, and implementing new information systems; (7) IRS expects that 45 percent of all taxpayers' calls will be resolved through interactive telephone systems by 2000; (8) IRS has implemented a networking capability among its 10 service centers for employees to gain access to taxpayer data nationwide; (9) IRS must deal with its limited ability to collect delinquent taxes and manage its accounts receivable; (10) IRS inventory of tax debt includes delinquent taxes up to 10 years old; and (11) IRS must clearly define its business needs and determine the most cost-effective means for meeting those needs.

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