Collection Staff Office, 7 regional offices, 10 service centers, 22 collection call sites, 63 district offices, and various overseas locations.2 IRS uses a three-step process to collect delinquent tax payments and obtain Taxpayers whose cases are not resolved at the service centers and whose actual or potential liability exceeds certain dollar thresholds are transferred to the Automated Collection System (ACS), the second step. ACS staff are responsible for collecting delinquent taxes, obtaining unfiled returns by telephoning taxpayers, and issuing levies against delinquent taxpayers' previously identified assets.3 In step three, taxpayers whose accounts are not resolved through ACS are assigned to IRS district offices. At this step, delinquent cases are put in a workload management queue and are assigned to revenue officers on the basis of predetermined scores. Revenue officers attempt to collect back taxes and obtain delinquent returns through telephone or face-to-face contact, issuance of levies, and seizures of taxpayers' physical assets. Delinquencies that do not meet the district offices' cutoff scores are held in the workload management queue. IRS' Assistant Commissioner (Collection) in the National Office allocates Collection staff to the regional offices. Each regional office, in turn, distributes its staff allocation to its operations and the service centers, call "The information discussed later in the report refers to 20 call sites. Two new call sites were formed from two existing call sites during the period covered in this report. In each instance, we combined information on the new and previously existing call site for comparison purposes. 3Levies are the seizures of taxpayers' liquid assets, such as wages and bank accounts, in the possession of employers and financial institutions. *Because of growing workloads, IRS established the Resource and Workload Management System sites, and district offices within its boundaries. In determining regional office staff allocations, the National Office first considers staff needs for service centers and ACS call sites based on expected workloads and workload disposition rates. Generally, about one-third of the Collection staff years are allocated for service centers and call sites. After considering service center and call site needs, the National Office then considers district office needs based on each office's proportional share of the estimated workload for the next year. If the workload-based regional office allocations do not provide sufficient staff years to maintain each district office's existing staff level less estimated attrition, the National Office adjusts allocations to provide the additional staff years needed to cover any shortfalls. Regional offices generally use National Office determinations of staff year needs to distribute staff years but may make adjustments among districts, call sites, and service centers to recognize local needs. For staff allocation purposes, a field office's estimated workload is the actual workload for the preceding fiscal year adjusted for any estimated change in the number of returns expected to be filed. IRS does not consider local or regional economic trends that could affect the next fiscal year's delinquent taxpayer workload. Total staff years used for Collection activities increased about 13 percent, from 15,853 to 17,950, from fiscal year 1987 through fiscal year 1991.6 (See table 1.) Staff year increases occurred primarily as a result of revenue initiatives enacted by Congress for fiscal years 1988 and 1991. "Before fiscal year 1991, the National Office considered district offices' total workload. It now only considers the portion of the workload that has high RWMS scores. "Our analysis of collection staff years was based upon information reported by service centers, ACS call sites, and district offices. Our information did not include staff years spent by the National Office and regional offices in managing the overall collection program. Therefore, the information in this report may not reconcile with total staffing information reported by IRS. Field Office Workload Table 2: Taxpayers Subject to Collection Action, Fiscal Years 1988-1991 Field office staff years were about 65 percent of all Collection staff years in fiscal year 1991, with call site staff years 15 percent of the total and service center staff years 20 percent. Field office workload increased 40 percent, or about 12 percent annually, from 1.37 million taxpayers in fiscal year 1988 to 1.92 million taxpayers in fiscal year 1991.7 Workload includes all delinquent taxpayers assigned to field offices, including those held in the queue waiting assignment to revenue officers. As shown in table 2, almost all of the growth was in the queue. The number of delinquent taxpayers assigned to revenue officers was virtually the same in fiscal year 1991 as it was in 1988. Fiscal year Taxpayers subject to collection action Objectives, Scope, and Methodology 1988 1989 1990 1991 Source: IRS data. In response to your request, our objectives were to determine whether there have been differences among IRS' Collection field offices during fiscal years 1987 through 1991 in (1) the relationship between the workload and the staff available to handle the workload and (2) productivity and "We were unable to calculate the number of taxpayers subject to collection action for fiscal year 1987 because the necessary data, on a taxpayer basis, were not available from IRS reports. To achieve the first objective we reviewed and analyzed information from Collection management reports generated by field offices, call sites, service centers, and the National Office. Using available information for the most recent 5 years at the time we began our review-fiscal years 19878 through 1991-we developed a series of workload and productivity indicators for IRS' 63 district offices and 20 call sites. Our workload and productivity indicators did not take into account the differences in locations' workload characteristics-complexity of cases, size of delinquencies, types of taxpayers because consistent data on these were not available for the entire period. We developed information on four productivity indicators: dollars collected per staff year, dollars assessed on delinquent returns per staff year, active case dispositions per staff year, 10 and the active inventory turnover period." Dollars collected and dollars assessed on delinquent returns per staff year are intended to measure how well Collection is using its resources to meet some of its primary responsibilities-collecting revenue and identifying delinquent returns and assessing the taxes due on them. Active dispositions per staff year and the active inventory turnover period are intended to measure the speed with which Collection offices process their active taxpayer workload. We do not believe that the active inventory turnover period is as good a measure of productivity as the other indicators because it reflects transfers to the queue as well as dispositions. However, we have included it because both IRS and the Office of Management and Budget have agreed to use the inventory turnover Because information was not available to calculate the number of delinquent taxpayers subject to collection action for fiscal year 1987, some of the workload indicators are shown from fiscal year 1988 through fiscal year 1991. "Although our report concentrates on district office workload and productivity, we also calculated workload and productivity indicators for the call sites. We did not calculate trend information for the service center Collection branch because IRS had not developed consistent indicators for the Collection branch's functions. 10A disposition occurs when (1) Collection staff close a delinquent account due to payment or abatement of the account balance, (2) the taxpayer agrees to pay the amount owed in installments, (3) Collection staff classify the account as currently not collectible because of the taxpayer's financial situation or because IRS cannot locate or contact the taxpayer, (4) Collection staff suspend collection action because of taxpayer litigation or bankruptcy, or (5) IRS secures a delinquent tax return or determines that the taxpayer did not have to file a return. "The active inventory turnover period reflects the number of months it takes for district office collection staff to dispose of or transfer to the queue the average number of cases in the district office's active inventory. For example, an active inventory turnover period of 6 months means that it takes that long for a Collection location to work its average inventory. Workload and Staffing period in tracking IRS accounts receivable. The workload and productivity indicators are in appendix I. Collection employees reviewed our indicators and agreed that we constructed the indicators appropriately using the information they provided. We did not verify the underlying information or do an independent reliability assessment. However, we did discuss the reliability of the data with the IRS officials responsible for generating the reports and management representatives in one IRS regional office, who said that the reports contained valid information and pointed out that this was the only information available. To achieve the second objective, we reviewed IRS policy documents and Collection staff allocation records to identify relevant IRS and Collection staffing policies and procedures and ascertain the resulting staff allocations. We limited our detailed analysis of IRS' staff allocation methodology to the methods used to allocate staff for district offices. We discussed the policies, procedures, and resulting staff allocations with National Office human resource and Collection officials in the North Atlantic and Midwest regional offices. Staff years for each call site and field office are in appendix II. We did our work between April and December 1992 in accordance with generally accepted government auditing standards. IRS' inability to balance its Collection field staffing with its workload has These disparities have developed over time, as the growth of the delinquent taxpayer workload and changes in the staff available to handle the workload have occurred at different rates among IRS' field offices. See table II.1 in appendix II for changes in staff years realized and table I.1 in |