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This report is one in a series that you requested because of your continuing interest in the Internal Revenue Service's (IRS) collection of its accounts receivable.1 It discusses IRS' Collection workload, staffing, and productivity. Specifically, the report discusses the growth of the delinquent account and delinquent return workload, how IRS has deployed its Collection staff to meet this workload, and the results of Collection function activities by location. This report concentrates on the Collection field function in IRS district offices, which accounts for about two-thirds of IRS' Collection staff.

IRS' mission is to collect the proper amount of tax revenue at the least cost to the public and in a manner that warrants the highest degree of public confidence in IRS' integrity, efficiency, and fairness. Collection's goal is to maximize the collection of delinquent taxes in a manner that is fair and equitable to all taxpayers.

IRS is in the process of changing the way it does business, and it has numerous projects under way that may affect the underlying workload and staffing needs of the Collection function. Reducing invalid accounts—a major portion of the Collection workload—is one part of IRS' three-part accounts receivable strategy. Accelerating collections and slowing the growth of accounts receivable are the other parts of the strategy.

While IRS is addressing its accounts receivable problem, it is also in the midst of modernizing its computer systems and reassessing its organizational structure. Over the long term, the reduction in the number of invalid accounts, the modernization of IRS' computer systems, and the potential reorganization may result in a restructuring of the collection process and changes in the desired mix, number, and location of Collection staff. The baseline information presented in this report should be helpful in these projects and in evaluating future budgetary needs.

'Delinquencies included in IRS' accounts receivable totaled $111 billion at the end of fiscal year 1991. IRS estimated that about $29 billion was collectible. The rest represented money that was not actually owed or money that IRS would not be able to collect because IRS could not locate the taxpayers or taxpayers could not pay.

Results in Brief

IRS has been faced with a continually growing workload of delinquent
taxpayers but has not allocated its Collection field staff to maximize
collections by ensuring that each field office has the appropriate number
of staff. Productivity has varied greatly over time and among IRS offices.
For example, dollars collected per staff year ranged from a low of about
$136,000 to a high of over $836,000 during the 5 years ending
September 30, 1991. In addition, some field offices have had almost no
backlog of delinquent cases, while others individually had over 60,000
delinquent accounts not being worked at the end of fiscal year 1991
because of insufficient staff.

IRS recognizes that some offices have staffing imbalances-differences between the actual number of staff and the number that should be, given the anticipated workload-but it has not identified the full extent of the imbalances. This is because it has not used staff productivity measures in determining the most appropriate allocation of staff. Economic principles suggest that to be efficient, the allocation of staff should result in equal marginal productivity at each location. That is, the increase in productivity achieved by adding the next staff person should be the same for each location. In addition to not using staff productivity measures, IRS' staff allocation methodology does not take into account future economic conditions that could affect workload.

IRS has not been able to rectify staffing imbalances because of its informal policies of (1) providing each field office with at least sufficient staff years to maintain its current staff level less the estimated attrition and (2) not transferring Collection staff among field offices. The massive efforts under way to modernize systems and change the way IRS does business could require changes in job descriptions and major realignments of staff. Thus, it is imperative that IRS develop a staffing methodology that will accurately determine appropriate staffing levels and eliminate staffing imbalances.

Accordingly, we believe IRS should develop a Collection staffing plan that includes the use of marginal productivity indicators and multiyear economic forecasts in determining the number of staff needed. We also believe that IRS should reconsider its decision not to transfer Collection staff among field offices.


IRS' mission is to collect the proper amount of tax at the least cost to the federal government in a manner that warrants confidence in IRS' integrity, efficiency, and fairness. IRS carries out its mission through its National

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