Internal Revenue Service: Assessment of the Fiscal Year 2009	 
Budget Request (16-APR-08, GAO-08-620T).			 
                                                                 
The fiscal year 2009 budget request for the Internal Revenue	 
Service (IRS) is a road map for how IRS plans to allocate	 
resources and achieve ambitious goals for improving enforcement, 
improving taxpayer service, increasing research, and continuing  
to invest in modernized information systems. One complicating	 
factor in implementing IRS's plans in the immediate future is the
recent passage of the Economic Stimulus Act of 2008, which	 
creates additional, unanticipated workload for IRS. GAO was asked
to (1) assess how the President's budget request for IRS	 
allocates resources and justifies proposed initiatives; (2)	 
determine the status of IRS's efforts to develop and implement	 
its Business Systems Modernization (BSM) program; and (3)	 
determine the total costs of administering the economic stimulus 
legislation. To meet these objectives, GAO drew upon and updated 
recently issued reports.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-620T					        
    ACCNO:   A81695						        
  TITLE:     Internal Revenue Service: Assessment of the Fiscal Year  
2009 Budget Request						 
     DATE:   04/16/2008 
  SUBJECT:   Allocation (Government accounting) 		 
	     Budget activities					 
	     Budget outlays					 
	     Cost analysis					 
	     Economic growth					 
	     Economic policies					 
	     Future budget projections				 
	     Information management				 
	     Information systems				 
	     Internal controls					 
	     Presidential budgets				 
	     Strategic planning 				 
	     Tax administration 				 
	     Tax administration systems 			 
	     Tax expenditures budgets				 
	     Taxpayers						 
	     Budget requests					 
	     Business planning					 
	     Business transformation				 
	     Cost estimates					 

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GAO-08-620T

   

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Testimony: 

Before the Subcommittee on Financial Services and General Government, 
Committee on Appropriations, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 3:00 p.m. EDT: 

Wednesday, April 16, 2008: 

Internal Revenue Service: 

Assessment of the Fiscal Year 2009 Budget Request: 

Statement of James R. White, Director: 

Strategic Issues: 

David A. Powner, Director: 

Information Technology Management Issues: 

GAO-08-620T: 

GAO Highlights: 

Highlights of GAO-08-620T, a testimony before the Subcommittee on 
Financial Services and General Government, Committee on Appropriations, 
U.S. Senate. 

Why GAO Did This Study: 

The fiscal year 2009 budget request for the Internal Revenue Service 
(IRS) is a road map for how IRS plans to allocate resources and achieve 
ambitious goals for improving enforcement, improving taxpayer service, 
increasing research, and continuing to invest in modernized information 
systems. One complicating factor in implementing IRSï¿½s plans in the 
immediate future is the recent passage of the Economic Stimulus Act of 
2008, which creates additional, unanticipated workload for IRS. 

GAO was asked to (1) assess how the Presidentï¿½s budget request for IRS 
allocates resources and justifies proposed initiatives; (2) determine 
the status of IRSï¿½s efforts to develop and implement its Business 
Systems Modernization (BSM) program; and (3) determine the total costs 
of administering the economic stimulus legislation. To meet these 
objectives, GAO drew upon and updated recently issued reports. 

What GAO Found: 

The Presidentï¿½s fiscal year 2009 budget request for IRS is $11.4 
billion, 4.3 percent more than last yearï¿½s enacted amount. The request 
proposes to maintain taxpayer service at recent levels, in part by 
realizing efficiency gains from electronic filing, despite a decrease 
in staffing. It also proposes a 7 percent increase in enforcement 
spending, including spending for 21 legislative and nonlegislative 
initiatives. The legislative proposals are projected to cost $23 
million in fiscal year 2009, funding that IRS would not need if the 
proposals are not enacted. Similarly, if IRS were to fall behind in its 
proposed enforcement hiring efforts, it would not need all $226 million 
of the associated funding. IRS justified its nonlegislative enforcement 
initiatives with ROI analyses, which are useful, despite limitations, 
for making resource allocation decisions. The budget request does not 
provide ROI information for activities that constitute a large part of 
the budget requestï¿½activities other than the proposed initiatives. 

The request for BSM is over $44 million lower than the fiscal year 2008 
enacted amount. IRS said this funding level will allow it to continue 
its primary modernization projects, but it did not describe how 
specific projects or benefits to taxpayers would be affected. IRS has 
continued to make progress in implementing BSM projects and improving 
modernization management controls and capabilities. However, further 
improvements are needed. For example, the agency has yet to develop 
long-term plans for completing BSM and consolidating and retiring 
legacy systems. 

IRS estimated that the costs of implementing the economic stimulus 
legislation may be up to a total of $767 millionï¿½including a $202 
million supplemental appropriation. In addition to the supplemental 
appropriation, IRS is reallocating hundreds of collections staff to 
answering taxpayer telephone calls, resulting in up to $565 million in 
foregone enforcement revenue. In addition, IRS expects some 
deterioration in telephone service because of the increased call 
volume. For example, IRS is expecting its assistor level of service to 
drop to as low as 74 percent compared to its goal of 82 percent. 

Table: The Presidentï¿½s Fiscal Year 2009 Request for IRS Full-time 
Equivalents (FTEs) Compared to Fiscal Year 2008 Enacted Budget FTEs: 

Appropriation: Enforcement; 
FY 2008 enacted: 47,349; 
FY 2009 requested: 49,792; 
Percentage change: 5.2. 

Appropriation: Taxpayer Service; 
FY 2008 enacted: 31,218; 
FY 2009 requested: 30,792; 
Percentage change: -1.4. 

Appropriation: Operations Support; 
FY 2008 enacted: 12,181; 
FY 2009 requested: 11,989; 
Percentage change: -1.6. 

Appropriation: BSM; 
FY 2008 enacted: 358; 
FY 2009 requested: 333; 
Percentage change: -7.0. 

Appropriation: Health Insurance Tax Credit; 
FY 2008 enacted: 17; 
FY 2009 requested: 16; 
Percentage change: -5.9. 

Total; 
FY 2008 enacted: 91,123; 
FY 2009 requested: 92,922; 
Percentage change: 2.0. 

Source: GAO analysis of IRS data. 

[End of table] 

What GAO Recommends: 

GAO is not making new recommendations, but the statement highlights 
outstanding recommendations to extend the use of return on investment 
(ROI) analysis to cover major enforcement programs and improve BSM 
management controls and capabilities. 

To view the full product, including the scope
and methodology, click on  [http://www.gao.gov/cgi-bin/getrpt?GAO-08-
620T. For more information, contact James R. White at (202) 512-9110 or 
[email protected].

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

We appreciate this opportunity to comment on the President's fiscal 
year (FY) 2009 budget request for the Internal Revenue Service (IRS). 

Financing of the federal government depends largely on IRS's ability to 
effectively administer the tax laws. The President has requested $11.4 
billion in program dollars to fund IRS's FY 2009 operations, including 
$11.1 billion for service to taxpayers and tax law enforcement, plus 
$223 million for the Business Systems Modernization (BSM) program, 
IRS's ongoing effort to improve the agency's business and tax 
processing systems. 

The FY 2009 budget request is a road map for how IRS intends to 
allocate resources in order to carry out ambitious plans of improving 
enforcement, improving taxpayer service, increasing research, and 
continuing to invest in modernized information systems. Together with 
the budget request, IRS's recently published strategies spell out its 
intentions for improving taxpayer service and reducing the net tax gap-
-the difference between the taxes owed and eventually paid, most 
recently estimated at $290 billion for tax year 2001.[Footnote 1] The 
budget request and strategies aim to build on recent IRS 
accomplishments such as annually bringing in more revenue through 
enforcement and making progress on modernizing IRS's business and tax 
processing systems. One complicating factor for carrying out IRS's 
ambitious plans in the immediate future is the recent passage of the 
Economic Stimulus Act of 2008, which creates additional, unanticipated 
workload for IRS this year.[Footnote 2] Passage of this act required 
IRS to act quickly to deal with taxpayers' questions and begin issuing 
payments. 

Based on your request, our objectives were to (1) assess how the 
President's budget request for IRS for FY 2009 allocates resources for 
enforcement, service, research, and systems modernization primarily 
compared to FY 2008 enacted levels; (2) assess the rationales for 
differences between the 2 years, including the rationales for 
initiatives and the extent to which those rationales have been 
justified; (3) determine the status of IRS's efforts to develop and 
implement its BSM program; and (4) determine the total cost of 
administering the economic stimulus program. 

To meet these objectives, we drew upon and updated a recently issued 
report on the budget request and IRS's 2008 tax filing season, and for 
our BSM work, we relied primarily on our review of the FY 2008 BSM 
expenditure plan.[Footnote 3] For the first report, we compared enacted 
and requested budgets for IRS; reviewed documents, including estimates 
of revenues and costs from initiatives; and interviewed IRS officials. 
For our BSM report, we analyzed the expenditure plan, reviewed other 
documents, and interviewed IRS officials. In assessing the cost of the 
economic stimulus package, we obtained performance and production data, 
looking for factors that significantly affected performance, and we 
interviewed IRS officials. We conducted the current performance audit 
from March 2008 through April 2008 in accordance with generally 
accepted government auditing standards. Those standards require that we 
plan and perform the audit to obtain sufficient, appropriate evidence 
to provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. For a more detailed discussion of our scope and 
methodology, see the appropriate sections in the budget and filing 
season and the BSM reports. 

In summary, we make the following major points: 

* The President's budget request for IRS proposes to maintain taxpayer 
service at recent levels and increase enforcement. Overall, it 
increases spending on IRS by 4.3 percent. Spending on taxpayer service 
would increase by less than 1 percent, which would result in reduced 
staffing, but the level of taxpayer service would be maintained by 
realizing efficiency gains, in part, through increases in electronic 
filing. The budget proposes a 7 percent increase in enforcement 
spending, including funds and staffing for various legislative and 
nonlegislative initiatives. According to the proposal, the legislative 
initiatives would raise about $36 billion in revenue over 10 years. 
They are projected to cost $23 million in FY 2009, funding IRS would 
not need if none of the legislative initiatives were enacted. 
Similarly, if IRS were to fall behind in meeting its challenging hiring 
goals for the nonlegislative initiatives, it would not need all $226 
million of the associated funding for FY 2009. 

* IRS included more information than past years on the initiatives in 
the FY 2009 proposed budget. Of particular note, IRS included return on 
investment (ROI) information for all nonlegislative initiatives. 
However, beyond those initiatives, the budget request does not provide 
an analytic basis for key resource allocation decisions. Such decisions 
include allocating resources among a variety of enforcement programs 
and taxpayer services. Analytic data such as ROI can be helpful to 
IRS's management and the Congress for making these decisions as well as 
decisions about the overall balance between taxpayer service and 
enforcement. Although the budget request provides performance measure 
data, it does not provide ROI for programs or activities that 
constitute a large part of the budget request--activities other than 
the proposed initiatives. 

* The requested budget for BSM is over $44 million lower than the FY 
2008 enacted amount of about $267 million and roughly $185 million less 
than the amount the IRS Oversight Board is proposing. Modernized e-File 
(MeF) is the project with the largest difference between the requested 
budget and the FY 2008 enacted amount. IRS stated that the requested 
BSM funding level will allow it to continue developing and delivering 
its primary modernization projects but did not provide details on how 
plans to deliver specific projects or benefits to taxpayers would be 
affected. IRS continues to make progress in implementing BSM projects 
and meeting cost and schedule commitments for most deliverables, but 
three project milestones recently experienced significant cost or 
schedule delays.[Footnote 4] IRS has also taken steps to address our 
prior recommendations; however, work remains to fully implement them, 
including developing long-term plans for completing the BSM program. 
Future releases of the Customer Account Data Engine (CADE) and Account 
Management Services (AMS) continue to face risks and challenges, which 
IRS is working to mitigate. Finally, we recently recommended that IRS 
complete a plan with specific time frames for implementing initiatives 
supporting its information technology (IT) human capital strategy, and 
IRS agreed. 

* IRS estimates that the cost of implementing the economic stimulus 
legislation may be up to a total of $767 million, including a $202 
million supplemental appropriation. In addition to the supplemental 
appropriation, IRS is reallocating resources from enforcement to 
taxpayer service by shifting hundreds of collections staff to answering 
telephone calls and, as a result, may forego up to $565 million in 
enforcement revenue. IRS has experienced a deterioration of telephone 
access and expects a further decline. For example, IRS's assistor level 
of service--which measures a taxpayer's ability to get through and 
speak to an assistor--has already declined, and IRS expects access to 
continue to drop to as low as 74 percent, down from the FY 2008 goal of 
82 percent. 

The FY 2009 Budget Request Proposes to Maintain Taxpayer Service at 
Recent Levels and Increase Enforcement: 

The President's budget request is proposing to maintain taxpayer 
service levels with fewer staff by realizing efficiency gains; it also 
proposes to increase enforcement by adding staff. The President's FY 
2009 budget request of $11.4 billion for IRS is 4.3 percent more than 
the FY 2008 enacted budget and represents an increase of less than 1 
percent for taxpayer service and 7 percent for enforcement, as shown in 
table 1. 

Table 1: The President's FY 2009 Request for IRS Compared to the FY 
2008 Enacted Budget: 

Dollars in thousands. 

Enforcement; 
Dollars in thousands: FY 2008 enacted: $6,997,226; 
Dollars in thousands: FY 2009 requested: $7,487,209; 
Dollars in thousands: Percentage change: 7.0. 

Taxpayer Service; 
Dollars in thousands: FY 2008 enacted: 3,612,833; 
Dollars in thousands: FY 2009 requested: 3,636,230; 
Dollars in thousands: Percentage change: 0.6. 

BSM; 
Dollars in thousands: FY 2008 enacted: 267,090; 
Dollars in thousands: FY 2009 requested: 222,664; 
Dollars in thousands: Percentage change: -16.6. 

Health Insurance Tax Credit; 
Dollars in thousands: FY 2008 enacted: 15,235; 
Dollars in thousands: FY 2009 requested: 15,406; 
Dollars in thousands: Percentage change: 1.1. 

Total; 
Dollars in thousands: FY 2008 enacted: $10,892,384; 
Dollars in thousands: FY 2009 requested: $11,361,509; 
Dollars in thousands: Percentage change: 4.3. 

Source: GAO analysis of IRS data. 

Note: Dollar amounts include amounts for operations support. 

[End of table] 

The budget request increases IRS-wide staff levels, measured in full- 
time equivalents (FTEs), by 2 percent, with a 1.4 percent decrease in 
taxpayer service FTEs and a 5.2 percent increase in enforcement FTEs, 
as shown in table 2. 

Table 2: The President's FY 2009 Request for IRS FTEs Compared to FY 
2008 Enacted Budget FTEs: 

Appropriation: Enforcement; 
FY 2008 enacted: 47,349; 
FY 2009 requested: 49,792; 
Percentage change: 5.2. 

Appropriation: Taxpayer Service; 
FY 2008 enacted: 31,218; 
FY 2009 requested: 30,792; 
Percentage change: -1.4. 

Appropriation: Operations Support; 
FY 2008 enacted: 12,181; 
FY 2009 requested: 11,989; 
Percentage change: -1.6. 

Appropriation: BSM; 
FY 2008 enacted: 358; 
FY 2009 requested: 333; 
Percentage change: -7.0. 

Appropriation: Health Insurance Tax Credit; 
FY 2008 enacted: 17; 
FY 2009 requested: 16; 
Percentage change: -5.9. 

Appropriation: Total; 
FY 2008 enacted: 91,123; 
FY 2009 requested: 92,922; 
Percentage change: 2.0. 

Source: GAO analysis of IRS data. 

Note: The decline in taxpayer services, including operations support, 
reflects 91 FTEs in efficiency savings and 207 FTEs in electronic 
filing savings. The increase in enforcement, including operations 
support, includes an additional 1,431 revenue agents and 582 revenue 
officers who will work on initiatives. 

[End of table] 

The President's budget proposal is consistent with longer-term trends 
for IRS. Compared to actual spending in FY 2006, the proposed FY 2009 
budget increases taxpayer service funding by 3.7 percent, a real 
decrease after inflation, while increasing IRS's enforcement funding by 
10 percent. 

The budget request proposes to maintain taxpayer service at recent 
levels. As an example, the key taxpayer service measures shown in table 
3 are projected to remain relatively stable through FY 2009. 

Table 3: Telephone Service Measures: 

Measure: Telephone performance--access: Assistor level of service 
(percentage of taxpayers who wanted to talk with an assistor and 
actually got through and received service); 
FY 2006 Actual: 82.0%; 
FY 2007 Actual: 82.1%; 
FY 2008 Planned: 82.0%; 
FY 2009 Planned: 82.0%. 

Measure: Telephone performance--accuracy: Tax law customer accuracy 
(percentage of calls in which telephone assistors provided accurate 
answers on tax law and took appropriate action); 
FY 2006 Actual: 90.9%; 
FY 2007 Actual: 91.2%; 
FY 2008 Planned: 91.0%; 
FY 2009 Planned: 91.0%. 

Measure: Telephone performance--accuracy: Accounts customer accuracy 
(percentage of calls in which telephone assistors provided accurate 
answers on customer accounts and took appropriate action); 
FY 2006 Actual: 93.2%; 
FY 2007 Actual: 93.4%; 
FY 2008 Planned: 93.5%; 
FY 2009 Planned: 93.7%. 

Source: GAO analysis of IRS data. 

[End of table] 

In order to maintain taxpayer service at recent levels despite a 
decrease in real spending and staffing, IRS expects to realize 
efficiency gains. For instance, IRS expects to devote 207 fewer FTEs to 
the labor-intensive processing of paper returns because of expected 
increases in electronic filing. These expected efficiency gains are 
consistent with past trends--between 1999 and 2007, IRS reduced staff 
devoted to processing paper returns by about 1,800 FTEs. 

IRS's ability to maintain or improve taxpayer service beyond 2009 will 
likely depend on its ability to continue to improve efficiency. To this 
end, in recent reports, we made recommendations to further increase 
electronic filing. We recommended that IRS determine the actions needed 
to require software vendors to include bar codes on printed returns, 
and we suggested that the Congress mandate electronic filing by certain 
paid tax preparers.[Footnote 5] IRS agreed with our bar code 
recommendation and outlined the actions it would take. 

Some of the real spending decrease proposed for FY 2009 is because of 
one-time investments made in FY 2008 or carryovers in funds from FY 
2008. For instance, the budget request proposes a $31 million reduction 
in funding for taxpayer assistance centers and outreach. However, IRS 
officials told us that this reduction includes funding used for long- 
term investments in FY 2008 that would not need to be duplicated in FY 
2009. IRS officials also told us that a $7.7 million decrease in 
funding for the Taxpayer Advocate offsets a funding increase in FY 2008 
that is being used to lower the Advocate's outstanding caseload. 
Finally, an $8 million reduction in the Volunteer Income Tax Assistance 
(VITA) program reflects FY 2008 funding that was not spent and carried 
over into FY 2009.[Footnote 6] 

The budget request for IRS's enforcement programs includes 
nonlegislative and legislative initiatives. According to the proposal, 
the five nonlegislative enforcement initiatives would cost about $338 
million in FY 2009 and are expected to raise about $2 billion of direct 
revenue annually starting in FY 2011.[Footnote 7] In addition, the 
budget request estimates that the enforcement initiatives would 
generate at least another $6 billion annually in indirect revenue. The 
indirect revenue results from improved voluntary compliance induced by 
taxpayers' awareness of expanded IRS enforcement. The budget request 
also proposes increases in examination coverage for corporations with 
assets of $10 million or more from a planned 6.6 percent for FY 2008 to 
6.8 percent for FY 2009. The coverage rate would increase to 7.6 
percent in FY 2010 as new enforcement staff hired in FY 2009 complete 
training and can audit more returns. 

The budget request includes 16 legislative initiatives budgeted at $23 
million for FY 2009 that it says would raise about $36 billion in 
revenue over 10 years; if none were enacted, IRS would not need the $23 
million. We have reported on three of the proposals. In 2006, we 
suggested that the Congress consider an idea for reducing securities 
capital gains noncompliance.[Footnote 8] In 1991, we supported the 
notion that payments to corporations be reported on information 
returns.[Footnote 9] Finally, in 2007, we described ways to mitigate 
the compliance costs related to these information returns and to other 
information returns associated with credit and debit card 
payments.[Footnote 10] 

The revenue expected from IRS's enforcement initiatives is modest 
compared to the net tax gap, which was last estimated at $290 billion 
for tax year 2001. As we noted in our statement to this Committee last 
year, no single approach, such as IRS enforcement, is likely to fully 
and effectively address noncompliance.[Footnote 11] Multiple approaches 
are needed because noncompliance has multiple causes and spans 
different types of taxes and taxpayers. 

Hiring needed staff for the nonlegislative initiatives will be 
challenging for IRS's Large and Mid-Size Business (LMSB) and Small 
Business/Self-Employed (SB/SE) divisions. For instance, the initiatives 
call for adding 1,431 revenue agents in addition to those who must be 
replaced from attrition, a high number relative to past years. IRS 
divisions have previously hired large numbers of staff in a short time 
because of specific budget initiatives, but officials reported that 
hiring gradually over time would reduce challenges. If IRS were to fall 
behind in its hiring efforts, it would not need all $226 million of the 
funding for staff for FY 2009 initiatives. 

IRS Has Enhanced Its Justifications for Initiatives and Could Benefit 
from Using ROI Analyses More Broadly, Even with Their Limitations: 

Responding to our recommendations from last year, IRS included more 
information on initiatives in the FY 2009 proposed budget, including 
ROI information for all nonlegislative initiatives. Last year, we 
recommended that IRS have available basic descriptive, cost, and 
expected performance information on all new initiatives and include 
such information in future budget submissions.[Footnote 12] This year, 
the budget request has sections explicitly entitled, for instance, 
"Initiative Summary," "Implementation Plan," "Expected Benefits," and 
"ROI." Four of the five nonlegislative enforcement initiatives for FY 
2009 were revisions of FY 2008 initiatives, but with more total funds 
requested and generally more informative justifications than for FY 
2008. 

However, IRS's ROI calculations have limitations that reflect the 
challenges of estimating ROIs. For example, the calculations do not 
account for benefits that are harder to measure, such as improved 
voluntary compliance. Another example showing ROI limitations is the 
$51 million National Research Project (NRP) initiative for which IRS 
estimates the ROI to be $0.40 per $1.00 invested. NRP funds research 
audits in order to develop more effective enforcement programs. The ROI 
calculation only includes direct revenue resulting from the research 
audits, not the potential for increased revenue from improved 
enforcement programs; nor does the calculation include the benefits of 
the Department of the Treasury's use of NRP data to provide the basis 
for legislative recommendations. 

Although the budget request for IRS provides performance measure data, 
it does not provide ROI analyses for programs or activities other than 
the new initiatives. As we noted in our recent report, analytic data 
such as ROI can be helpful to managers and the Congress when making 
resource allocation decisions.[Footnote 13] ROI analyses, even with 
their limitations, can help answer questions such as the following: 

* What are the implications for IRS's resource allocation of the lower 
costs per taxpayer contact for some services compared to others as 
shown in table 4? 

* Are there extra benefits that offset the higher costs of some 
services, or could costs be reduced by promoting increased reliance on 
the lower-cost options? 

Table 4: Cost of Providing Taxpayer Service in FY 2005: 

Service: Answering tax law questions via e-mail; 
Estimated cost per contact: $52.51. 

Service: Providing assistance at taxpayer assistance centers; 
Estimated cost per contact: 28.73. 

Service: Answering correspondence; 
Estimated cost per contact: 24.97. 

Service: Providing assistance by assistors via toll-free telephones; 
Estimated cost per contact: 19.46. 

Service: Providing assistance through VITA sites; 
Estimated cost per contact: 12.01. 

Service: Providing assistance by automation via toll-free telephones; 
Estimated cost per contact: 0.71. 

Service: Providing assistance such as downloads and searches on IRS's 
Web site; 
Estimated cost per contact: 0.13. 

Source: GAO analysis of IRS data. 

Note: IRS reported that these estimates do not fully allocate all 
indirect overhead and support costs. We have reported that because of 
long-standing limitations in IRS's cost accounting capability, cost 
data at this detailed level have not been audited (see, for example, 
GAO-07-310 and 07-247). From our perspective, it would be important to 
know more about the indirect and support costs to see if they might 
significantly change the cost estimates. 

[End of table] 

Similar questions can be asked about enforcement based on table 5: 

* Is IRS appropriately allocating resources between field audits, often 
conducted at a taxpayer's business, and correspondence audits, which 
are simpler and conducted by mail?[Footnote 14] 

* For the rows in table 5 with average recommended additional tax per 
return greater for correspondence audits than for field audits, could 
resources be reallocated from field audits to correspondence audits in 
order to help close the tax gap? 

* Are there other benefits to field audits, such as a greater impact on 
voluntary compliance, that are not captured in IRS's data? 

Table 5: Field and Correspondence Audits of Some Business Categories of 
Taxable Individual Income Tax Returns, FYs 2006 and 2007: 

Type and size of return: FY 2006: Business nonfarm returns by size of 
total gross receipts (TGR): Under $25,000; 
Number of returns examined: Field: 19,801; 
Number of returns examined: Correspondence: 107,802; 
Average recommended additional tax per return: Field: $3,918; 
Average recommended additional tax per return: Correspondence: $2,614. 

Type and size of return: FY 2006: Business nonfarm returns by size of 
total gross receipts (TGR): $25,000 under $100,000; 
Number of returns examined: Field: 38,722; 
Number of returns examined: Correspondence: 42,070; 
Average recommended additional tax per return: Field: 5,464; 
Average recommended additional tax per return: Correspondence: 7,600. 

Type and size of return: FY 2006: Business nonfarm returns by size of 
total gross receipts (TGR): $100,000 or more; 
Number of returns examined: Field: 54,716; 
Number of returns examined: Correspondence: 34,515; 
Average recommended additional tax per return: Field: 25,787; 
Average recommended additional tax per return: Correspondence: 27,863. 

Type and size of return: FY 2007: Business nonfarm returns without 
earned income tax credit, by size of TGR: Under $25,000; 
Number of returns examined: Field: 53,092; 
Number of returns examined: Correspondence: 81,237; 
Average recommended additional tax per return: Field: 4,836; 
Average recommended additional tax per return: Correspondence: 11,048. 

Type and size of return: FY 2007: Business nonfarm returns without 
earned income tax credit, by size of TGR: $25,000 under $100,000; 
Number of returns examined: Field: 31,363; 
Number of returns examined: Correspondence: 31,513; 
Average recommended additional tax per return: Field: 6,320; 
Average recommended additional tax per return: Correspondence: 11,793. 

Type and size of return: FY 2007: Business nonfarm returns without 
earned income tax credit, by size of TGR: $100,000 under $200,000; 
Number of returns examined: Field: 28,286; 
Number of returns examined: Correspondence: 28,041; 
Average recommended additional tax per return: Field: 24,582; 
Average recommended additional tax per return: Correspondence: 32,640. 

Type and size of return: FY 2007: Business nonfarm returns without 
earned income tax credit, by size of TGR: $200,000 or more; 
Number of returns examined: Field: 11,319; 
Number of returns examined: Correspondence: 1,730; 
Average recommended additional tax per return: Field: 15,959; 
Average recommended additional tax per return: Correspondence: 7,017. 

Type and size of return: FY 2006: Business returns with total positive 
income at least $200,000 and under $1 million; 
Number of returns examined: Field: 17,499; 
Number of returns examined: Correspondence: 15,280; 
Average recommended additional tax per return: Field: 20,880; 
Average recommended additional tax per return: Correspondence: 33,406. 

Source: GAO analysis of IRS data. 

Note: This table does not include all categories of audits. For a 
number of those categories, field audits produce a higher average 
recommended additional tax per return than do correspondence audits. 

[End of table] 

We recognize that developing ROI estimates for IRS's ongoing programs 
such as examinations and taxpayer service will be a challenge. However, 
because of the potential benefits of ROI analyses, we recommended in 
our previous report on the FY 2009 budget request that the Commissioner 
of Internal Revenue extend the use of ROI in future budget proposals to 
cover major enforcement programs. At that time, IRS officials said that 
because of the short time frame for our report, they did not have time 
to fully analyze its recommendations, and, therefore, were unable to 
respond.[Footnote 15] We have agreed to meet with IRS to further 
discuss the ROI recommendation. 

Further Progress Made in Implementing BSM, but Challenges and Risks 
Remain: 

IRS's BSM program, initiated in 1999, involves the development and 
delivery of a number of modernized tax administration, internal 
management, and core infrastructure projects that are intended to 
provide improved and expanded service to taxpayers as well as IRS 
internal business efficiencies. Key tax administration projects include 
CADE, which is intended to provide the modernized database foundation 
to replace the existing Individual Master File processing system that 
contains the repository of individual taxpayer information; AMS, which 
is intended to enhance CADE by providing applications for IRS employees 
and taxpayers to access, validate, and update accounts on demand; and 
MeF, which is to provide a single standard for filing electronic tax 
returns. We recently reported that while IRS has continued to make 
progress in implementing BSM projects and improving modernization 
management controls and capabilities, challenges and risks remain, and 
further improvements are needed.[Footnote 16] 

As shown in table 6, the FY 2009 budget request for the BSM program is 
less than the enacted FY 2008 budget by over $44 million and about $185 
million less than the amount the IRS Oversight Board is proposing. When 
we asked about the impact of this reduction on its operations, IRS told 
us that the proposed funding level will allow it to continue developing 
and delivering its primary modernization projects but did not provide 
details on how plans to deliver specific projects or benefits to 
taxpayers would be affected. MeF is the project with the largest 
difference between the requested budget and the FY 2008 enacted amount. 

Table 6: BSM Funding Differences, FY 2008 and 2009 (in thousands): 

Project: Customer Account Data Engine; 
FY 2008 enacted: $58,500; 
FY 2009 budget request: $58,800. 

Project: Accounts Management Services; 
FY 2008 enacted: 28,983; 
FY 2009 budget request: 26,158. 

Project: Modernized e-File; 
FY 2008 enacted: 55,802; 
FY 2009 budget request: 25,000. 

Project: Filing & Payment Compliance; 
FY 2008 enacted: 0; 
FY 2009 budget request: 0. 

Project: Core Infrastructure; 
FY 2008 enacted: 39,150; 
FY 2009 budget request: 32,000. 

Project: Architecture, Integration, and Management; 
FY 2008 enacted: 35,100; 
FY 2009 budget request: 35,000. 

Project: Management Reserve; 
FY 2008 enacted: 4,310; 
FY 2009 budget request: 2,300. 

Project: Subtotal Capital Investments; 
FY 2008 enacted: $221,845; 
FY 2009 budget request: $179,258. 

Project: BSM Labor; 
FY 2008 enacted: 44,000; 
FY 2009 budget request: 42,052. 

Project: Subtotal Program Request; 
FY 2008 enacted: $265,845; 
FY 2009 budget request: $221,310. 

Project: Maintaining Current Levels; 
FY 2008 enacted: 1,245; 
FY 2009 budget request: 1,354. 

Project: Total BSM Budget Request; 
FY 2008 enacted: $267,090; 
FY 2009 budget request: $222,664. 

Source: IRS data. 

[End of table] 

IRS has made progress in implementing BSM projects and meeting cost and 
schedule commitments for most deliverables, but three project 
milestones experienced significant cost or schedule delays.[Footnote 
17] During 2007, IRS completed milestones of the Filing and Payment 
Compliance (F&PC), a tax collection case analysis support system; MeF; 
CADE; and AMS. Our analysis of reported project costs and completion 
dates showed that 13 of the 14 associated project milestones that were 
scheduled for completion during this time were completed within 10 
percent of cost estimates, and 11 of the 14 milestones were completed 
within 10 percent of schedule estimates. However, a milestone for CADE 
exceeded its planned schedule by 66 percent and experienced a 15 
percent cost increase; another milestone for the same project incurred 
a 153 percent schedule delay, and a milestone for MeF experienced a 41 
percent schedule delay (see fig. 1). 

Figure 1: Summary of Cost and Schedule Performance for Fiscal Year 2007 
Project Milestones: 

This figure is a bar graph showing the summary of cost and schedule 
performance for fiscal year 2007 project milestones. 

Program: F&PC 
Milestone: 3.5; 
Release: 1.1; 
Cost variance: 6.0; 
Schedule variance: 0. 

Program: F&PC 
Milestone: 4b; 
Release: 1.2; 
Cost variance: -3.4; 
Schedule variance: -5.6. 

Program: F&PC 
Milestone: 5; 
Release: 1.2; 
Cost variance: 9.7; 
Schedule variance: -0.6. 

Program: MeF; 
Milestone: 4-5; 
Release: 4; 
Cost variance: 2.8; 
Schedule variance: 4.9. 

Program: MeF; 
Milestone: 3; 
Release: 5; 
Cost variance: 4.0; 
Schedule variance: 41.1. 

Program: CADE; 
Milestone: 4; 
Release: 2.2; 
Cost variance: 14.7; 
Schedule variance: 65.8. 

Program: AMS; 
Milestone: 2-3; 
Release: 3; 
Cost variance: 0; 
Schedule variance: 152.9. 

Program: CADE; 
Milestone: 4; 
Release: 3.1; 
Cost variance: 0; 
Schedule variance: -2.3. 

Program: AMS; 
Milestone: 2-3; 
Release: 1.1; 
Cost variance: 0; 
Schedule variance: 0. 

Program: AMS; 
Milestone: 4a; 
Release: 1.1; 
Cost variance: 0; 
Schedule variance: 4.9. 

Program: AMS; 
Milestone: 4b; 
Release: 1.1; 
Cost variance: 0; 
Schedule variance: -1.0. 

Program: AMS; 
Milestone: 2-3; 
Release: 1.2; 
Cost variance: 0; 
Schedule variance: 0. 

Program: AMS; 
Milestone: 4a; 
Release: 1.2; 
Cost variance: 0; 
Schedule variance: -2.1. 

Program: AMS; 
Milestone: 2-3; 
Release: 1.3; 
Cost variance: 0; 
Schedule variance: 0. 

[See PDF for image] 

Source: GAO analysis of IRS data. 

[End of figure] 

IRS has taken steps to address our prior recommendations to improve its 
modernization management controls and capabilities. However, work 
remains to fully implement them. For example, in July 2005, we 
recommended that IRS fully revisit the vision and strategy for the BSM 
program and develop a new set of long-term goals, strategies, and plans 
consistent with the budgetary outlook and IRS's management 
capabilities.[Footnote 18] We also noted that the vision and strategy 
should include time frames for consolidating and retiring legacy 
systems. In response, IRS has developed a Modernization Vision and 
Strategy framework and supporting 5-year Enterprise Transition Plan. 
However, the agency has yet to develop long-term plans for completing 
BSM and consolidating and retiring legacy systems. We also recommended 
in February 2007 that IRS ensure that future BSM expenditure plans 
include a quantitative measure of progress in meeting scope 
expectations.[Footnote 19] We further recommended that, in developing 
this measure, IRS consider using earned value management since this is 
a proven technique required by the Office of Management and Budget for 
measuring cost, schedule, and functional performance against 
plans.[Footnote 20] While IRS has developed an approach to address our 
recommendation, it has not yet fully implemented it. 

Future BSM project releases continue to face significant risks and 
issues, which IRS is addressing. Specifically, the agency recently 
identified significant risks and issues with planned system deliveries 
of CADE and AMS and reported that maintaining alignment between the two 
systems will be a significant challenge and source of risk for the BSM 
program. IRS recognizes the potential impact of identified risks and 
issues on its ability to deliver projects within cost and schedule 
estimates and has developed mitigation strategies to address them. 
While mitigation strategies have been developed, the risks and 
challenges confronting future releases of CADE and AMS are nevertheless 
significant, and we will continue to monitor them and actions to 
address them. 

IRS also made further progress in addressing high-priority BSM program 
improvement initiatives during the past year. In September 2007, IRS 
completed another cycle of initiatives and initiated a new cycle, which 
was scheduled to be completed at the end of March 2008. Initiatives 
that were addressed in the 6-month cycle ending in September 2007 
included IT human capital, information security, and process 
improvements (e.g., developing and implementing standardized earned 
value management practices for major projects). IRS's program 
improvement process continues to be an effective means of regularly 
assessing, prioritizing, and incrementally addressing BSM issues and 
challenges. However, more work remains for the agency to fully address 
these issues and challenges. 

Finally, we recently reported that efforts to address human capital 
challenges continue, but more work remains. IRS developed an IT human 
capital strategy that addresses hiring critical personnel, employee 
training, leadership development, and workforce retention, and agency 
officials stated that they plan to undertake a number of human capital 
initiatives to support their human capital strategy, including 
conducting analyses of turnover rates and continuing efforts to replace 
key leaders lost to retirement. However, a specific plan with time 
frames for implementing these initiatives has not been developed. We 
recommended that IRS complete such a plan to help guide the agency's 
efforts in addressing its IT human capital gaps and measure progress in 
implementing them. IRS agreed with our recommendation and stated that 
it intends to develop a plan to implement its IT human capital 
strategy. 

IRS Estimates the Cost of Implementing the Economic Stimulus 
Legislation May Be Up to a Total of $767 Million and Expects Declines 
in Some Taxpayer Services: 

The Economic Stimulus Act of 2008 is resulting in a significant 
workload increase not anticipated in the FY 2008 budget. As part of the 
legislation, IRS received $202 million in a supplemental appropriation. 
However, because IRS could not find an alternative according to 
responsible officials, it has reallocated resources from enforcement to 
taxpayer service and is allowing some deterioration in telephone 
service. 

IRS will begin sending economic stimulus payments to more than 130 
million households in early May, after the current tax filing season, 
and is scheduled to be done by mid-July. These include an estimated 20 
million retirees and disabled veterans, and low-wage workers who 
usually are exempt from filing a tax return but will be eligible for 
stimulus payments. Taxpayers required to file a tax return must do so 
by April 15 in order to receive a stimulus payment by mid- 
July.[Footnote 21] People who are not required to file a tax return, 
but are doing so to receive a stimulus payment, are required to file an 
IRS Form 1040A by October 15, 2008. 

As part of the legislation, IRS received a supplemental appropriation 
of $202 million to help fund its costs for implementing the stimulus 
package. This funding will remain available until September 30, 2009. 
As shown in table 7, IRS plans to spend the bulk of the funding--$151.4 
million--for Operations Support, most of it on postage for two mass 
mailings and on IT support. IRS also expects to spend $50.7 million for 
Taxpayer Services, including $26.2 million for staffing and overtime 
for telephone assistors. IRS is expecting 2.4 million additional 
telephone calls in March and April with questions for IRS assistors 
about the economic stimulus legislation. These calls are in addition to 
the more than 14 million calls typically answered by IRS assistors 
between January and mid-April. 

Table 7: IRS's Estimated Costs of Implementing the Economic Stimulus 
Legislation: 

Dollars in millions. 

Supplemental appropriation: Operations Support: Postage; 
$90.613. 

Supplemental appropriation: Operations Support: IT support; 
43.965. 

Supplemental appropriation: Operations Support: Telecommunications; 
8.370. 

Supplemental appropriation: Operations Support: Printing; 
6.767. 

Supplemental appropriation: Operations Support: Communications plan; 
1.700. 

Supplemental appropriation: Operations Support: Total for Operations 
Support; 
151.415. 

Taxpayer Services: Additional staffing/overtime; 
50.720. 

Total supplemental funding; 
$202.135. 

IRS estimates of foregone revenue from shifting Automated Collection 
System (ACS) staff[A]: Wage and Investment (W&I); 
$191.728. 

IRS estimates of foregone revenue from shifting Automated Collection 
System (ACS) staff[A]: Small Business/Self-Employed (SB/SE); 
373.065. 

Total foregone revenue; 
Up to $564.793. 

Total; 
Up to $766.928. 

Taxpayer service: Assistor level of service (percent); 
2008 goal: 82; 
Revised estimate: As low as 74; 
Reduction: Down 8 percentage points. 

Source: GAO analysis of IRS and Treasury data. 

[A] Revised as of early April 2008. 

[End of table] 

To help meet the increased telephone demand, IRS is shifting about half 
of its over 2,000 Automated Collection System (ACS) telephone staff 
from collecting delinquent taxes to answering economic stimulus 
telephone calls from March through May.[Footnote 22] To accommodate 
this shift, IRS stopped sending out some ACS-generated notices, such as 
notices of levy, several weeks ago.[Footnote 23] According to IRS 
officials, it takes about 3 to 4 weeks before this adjustment in ACS- 
generated notices affects the ACS workload. IRS originally estimated 
that the revenue foregone by shifting ACS staff to be up to $681 
million. However, according to IRS officials, in early April, IRS 
revised its foregone revenue estimate down to $565 million, shown in 
table 7, largely because of lower-than-expected demand for telephone 
assistance in March.[Footnote 24] 

According to IRS officials, IRS's priority is to respond to taxpayers' 
questions about the stimulus program; therefore, the officials are 
monitoring call volume and adjusting the number of ACS staff answering 
telephones accordingly. When call volume is low, ACS staff work on 
outstanding ACS collection cases. However, IRS officials stated that 
this work does not produce the same revenue as the ACS-generated 
notices, particularly revenue generated from notices of levy. When IRS 
adjusts the volume of ACS-generated notices, it takes several weeks 
before that adjustment affects ACS workload. IRS officials do not want 
to resume sending ACS-generated notices until they are sure ACS 
staffers are available to handle the resulting workload. 

Should the lower-than-expected call volume continue, IRS may have an 
opportunity to shift the ACS staff back to their most productive 
collection work. This could further reduce the revenue foregone from 
using ACS staff to answer stimulus-related telephone calls. To date, 
IRS has not reduced its projections for future stimulus-related call 
volume. If the projections are reduced, IRS may be able to resume 
sending out at least some ACS-generated notices. 

According to IRS officials, IRS considered alternatives to shifting ACS 
staff, including contracting out, using other IRS staff, or using 
Social Security Administration or other federal staff, but decided the 
alternatives were not feasible. For example, contracting out was not 
deemed feasible because of insufficient time to negotiate the contract 
and conduct background checks and training. 

Another cost--although not measured in dollars--is the decline in 
telephone service shown in table 7. Because of the increased call 
volume, IRS expects its assistor level of service to drop from 82 
percent (the 2008 goal) to as low as 74 percent--the lowest level since 
2002. IRS is already experiencing some declines in telephone service. 
As of March 29, the level of service had dropped to 80 percent, 
taxpayers were waiting a minute and a half longer than last year, and 
they were hanging up 43 percent more often while waiting to speak to an 
assistor. Between March 3 and March 29, IRS assistors answered over 
572,000 stimulus-related calls.[Footnote 25] IRS expects call volume to 
increase rapidly in upcoming weeks as taxpayers receive their stimulus 
notices in the mail. 

Because IRS is in the early stages of implementing the stimulus 
legislation, IRS officials do not have much information about the 
actual costs. Through March, IRS estimates that it has spent almost 
$103 million, mostly for postage. 

Agency Comments: 

In commenting on a draft of our earlier report on the FY 2009 budget 
request and 2008 tax filing season, IRS officials said that, because of 
the short time frame for our report, they did not have time to fully 
analyze our recommendation and, therefore, were unable to respond at 
the time. They provided technical comments at that time and again for 
this statement, and we made those changes where appropriate. We have 
agreed to meet with IRS to further discuss the ROI recommendation. 

Mr. Chairman, this concludes my prepared statement. Mr. Powner and I 
would be happy to respond to questions that you or other Members of the 
Subcommittee may have at this time. 

Contacts and Acknowledgments: 

For further information regarding this testimony, please contact James 
R. White, Director, Strategic Issues, on (202) 512-9110 or 
[email protected] or David A. Powner, Director, Information Technology 
Management Issues, on (202) 512-9296 or [email protected]. Contact points 
for our offices of Congressional Relations and Public Affairs may be 
found on the last page of this statement. Individuals making key 
contributions to this testimony include Joanna Stamatiades, Assistant 
Director; Carlos E. Diz; Sarah A. Farkas; Charles R. Fox; Leon H. 
Green; Carol M. Henn; Lawrence M. Korb; Paul B. Middleton; Karen V. 
O'Conor; Sabine R. Paul; Cheryl M. Peterson; and Neil A. Pinney. 

[End of section] 

Footnotes: 

[1] Internal Revenue Service, Reducing the Federal Tax Gap (Washington, 
D.C.: Aug. 2, 2007); and Internal Revenue Service, The 2007 Taxpayer 
Assistance Blueprint (Washington, D.C.: 2007). 

[2] Pub. L. No. 110-185 (2008). 

[3] GAO, Internal Revenue Service: Fiscal Year 2009 Budget Request and 
Interim Performance Results of IRS's 2008 Tax Filing Season, GAO-08-567 
(Washington, D.C.: Mar. 13, 2008) and GAO, Business Systems 
Modernization: Internal Revenue Service's Fiscal Year 2008 Expenditure 
Plan, GAO-08-420 (Washington, D.C.: Mar. 7, 2008). 

[4] Milestones represent different phases in IRS's project life cycle. 

[5] GAO, Tax Administration: 2007 Filing Season Continues Trend of 
Improvement, but Opportunities to Reduce Costs and Increase Tax 
Compliance Should Be Evaluated, GAO-08-38 (Washington, D.C.: Nov.15, 
2007) and GAO, Tax Administration: Most Filing Season Services Continue 
to Improve, but Opportunities Exist for Additional Savings, GAO-07-27 
(Washington, D.C.: Nov. 15, 2006). 

[6] The funding provided in FY 2008 was two-year funding. Since IRS was 
ramping up the program being funded--providing matching grants to 
volunteer preparer organizations--in 2008, additional funding was not 
needed for 2009. Despite not asking for additional funding, IRS is 
expecting to see large, but unquantified, growth in tax returns 
prepared at VITA sites. According to IRS officials, IRS does not have a 
separate line item showing how much it spent on VITA overall. 

[7] These nonlegislative initiatives involve (1) reducing the tax gap 
for small businesses and the self-employed; (2) reducing it for large 
businesses; (3) increasing reporting compliance related to offshore 
activity; (4) through research, improving tax gap estimates, 
measurement, and detection of noncompliance; and (5) expanding document 
matching. 

[8] GAO, Capital Gains Tax Gap: Requiring Brokers to Report Securities 
Cost Basis Would Improve Compliance if Related Challenges Are 
Addressed, GAO-06-603 (Washington, D.C.: June 13, 2006). 

[9] GAO, Tax Administration: Benefits of a Corporate Document Matching 
Program Exceed the Costs, GAO/GGD-91-118 (Washington, D.C.: Sept. 27, 
1991). 

[10] GAO, Tax Administration: Costs and Uses of Third-Party Information 
Returns, GAO-08-266 (Washington, D.C.: Nov. 20, 2007). 

[11] GAO, Internal Revenue Service: Assessment of the 2008 Budget 
Request and an Update of 2007 Performance, GAO-07-719T (Washington, 
D.C.: May 9, 2007). 

[12] GAO-07-719T. 

[13] GAO-08-567. 

[14] In FY 2007 correspondence audits took, on average, 1.4 hours to 
conduct compared to the 30.8-hour average for field audits done at 
taxpayers' locations and the 7.8-hour average for field audits done at 
IRS offices. 

[15] GAO-08-567. 

[16] GAO-08-420. 

[17] Milestones represent different phases in IRS's project life cycle. 

[18] GAO, Business Systems Modernization: Internal Revenue Service's 
Fiscal Year 2005 Expenditure Plan, GAO-05-774 (Washington, D.C.: July 
22, 2005). 

[19] GAO, Business Systems Modernization: Internal Revenue Service's 
Fiscal Year 2007 Expenditure Plan, GAO-07-247 (Washington, D.C.: Feb. 
15, 2007). 

[20] Earned value management is a project management tool that 
integrates the investment scope of work with schedule and cost elements 
for investment planning and control. This method compares the value of 
work accomplished during a given period with that of the work expected 
in the period. Differences between accomplishments and expectations are 
measured in both cost and schedule variances. 

[21] Taxpayers who are unable to meet the April 15 filing deadline can 
file a Form 4868, the automatic extension of time to file, which gives 
them until October 15 to submit a 2007 tax return. 

[22] When IRS has completed sending its initial series of notices to 
tax debtors, it assigns the debts to its collections programs, such as 
ACS. ACS is an automated telephone-based system designed to call tax 
debtors. ACS staffers then attempt to talk with tax debtors to try to 
collect outstanding tax debt. IRS estimated there are about 1,200 ACS 
staff in its W&I division and about 1,100 in its SB/SE division. 

[23] IRS suspended notices sent by ACS examiners, such as final notices 
before enforcement, collection due process notices, and notices of 
levy. 

[24] IRS arrived at the estimates by taking a 3-year average of dollars 
collected by closing ACS cases for both its W&I and SB/SE divisions. 
IRS determined the projected foregone revenue by multiplying the 
average dollars collected per ACS staff by the projected lost case 
closures. IRS plans to minimize the use of SB/SE staff because the 
revenue collected by SB/SE is greater than for W&I. 

[25] According to IRS officials, before March 3, taxpayers with 
stimulus-related calls were transferred to an automated message, which 
told taxpayers that additional information would be forthcoming. IRS 
estimated that the number of these calls frequently ranged from 20,000 
to 60,000 per day. IRS assistors started answering stimulus-related 
questions on March 3, and IRS established its dedicated telephone line 
for stimulus-related calls on March 14. 

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