Tax Administration: IRS' Abatement Process in Selected Locations (Letter
Report, 07/02/1999, GAO/GGD-99-98).

Each year from 1995 through 1998, the Internal Revenue Service (IRS)
abated about $30 billion in tax, penalty, and interest assessments in
the tax accounts of individuals and businesses. Abatements reduce
assessments and can occur for various reasons, from correcting errors
made by IRS and taxpayers to providing relief from penalties when
taxpayers have reasonable cause for failing to comply with tax
requirements. The process for making abatements is important for
ensuring the equitable treatment of taxpayers across IRS' 10 service
centers and 33 district offices. This report describes (1) IRS' process
for making abatements from initiation through final review in selected
IRS locations--the Kansas City Service Center, the Fresno Service
Center, the Kansas City District Office, and the Northern California
District Office--and (2) IRS' efforts to improve the abatement process.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-99-98
     TITLE:  Tax Administration: IRS' Abatement Process in Selected
	     Locations
      DATE:  07/02/1999
   SUBJECT:  Income taxes
	     Indebtedness waivers
	     Taxpayers
	     Tax administration

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  This text was extracted from a PDF file.        **
** Delineations within the text indicating chapter titles,      **
** headings, and bullets have not been preserved, and in some   **
** cases heading text has been incorrectly merged into          **
** body text in the adjacent column.  Graphic images have       **
** not been reproduced, but figure captions are included.       **
** Tables are included, but column deliniations have not been   **
** preserved.                                                   **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************

    United States General Accounting Office GAO              Report to
    the Joint Committee on Taxation July 1999        TAX
    ADMINISTRATION IRS' Abatement Process in Selected Locations
    GAO/GGD-99-98 United States General Accounting Office GAO
    Washington, D.C.  20548 General Government Division B-282811 July
    2, 1999 The Honorable Bill Archer Chairman The Honorable William
    V. Roth, Jr. Vice Chairman Joint Committee on Taxation For fiscal
    years 1995 through 1998, the Internal Revenue Service (IRS)
    annually abated about $30 billion in tax, penalty, and interest
    assessments in the tax accounts of individual and business
    taxpayers. Abatements reduce assessments and can occur for a
    variety of reasons, such as to correct errors made by IRS and
    taxpayers and to provide relief from penalties when taxpayers have
    reasonable cause for failing to comply with tax requirements. The
    process for making abatements is important for ensuring the
    equitable treatment of taxpayers across IRS' 10 service centers
    and 33 district offices. In a letter dated February 2, 1999, you
    asked us to describe IRS' abatement process in order to help the
    Committee fulfill a requirement in the IRS Restructuring and
    Reform Act of 1998 to report on the administration of penalty and
    interest assessments by July 22, 1999.1 On the basis of
    discussions with your office, our objectives were to describe (1)
    IRS' process for making abatements from initiation through final
    review in selected IRS locations and (2) IRS' efforts to improve
    the abatement process. As agreed with your office, the selected
    locations were the Kansas City Service Center, Fresno Service
    Center, Kansas City District Office, and Northern California
    District Office. An abatement may be initiated by a request from a
    taxpayer or by IRS. Results in Brief    Once initiated, IRS'
    abatement process depends on the type, complexity, and source of
    the assessment being abated. According to IRS officials, these
    factors determine the IRS work group, such as those that audit tax
    returns or answer taxpayer inquiries, that makes the abatement
    decision.2 The work group, in combination with the type and
    complexity of the assessment being abated, influence the type and
    grade level of staff making abatement decisions, the criteria and
    supervisory review used to guide decisions, and the quality review
    done after the decisions are made. 1As also requested in this
    letter, we have reported the number and amount of abatements of
    tax, penalty, and interest assessments for individual and business
    taxpayers. See Tax Administration: IRS' Abatement of Assessments
    in Fiscal Years 1995-98 (GAO/GGD-99-77, June 4, 1999). 2For this
    report, "work group" is a generic term for branches and other
    offices. Page 1
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 IRS does not have quantitative data on details of the
    abatement process. An abatement is just one type of adjustment
    that IRS can make to taxpayer accounts. For example, IRS staff
    also adjust accounts to reflect the dates and amounts of various
    types of assessments and payments. Although it has data on the
    number and amount of abatements, IRS cannot extract any
    quantitative data about the abatement process from data on all
    types of adjustments. Determining the costs and benefits of
    collecting data on just the abatement process is beyond the scope
    of this report. IRS' recent efforts to improve the abatement
    process have generally involved task forces that have been
    studying various IRS concerns, including, for example, the
    administration of penalties and treatment of taxpayers. Although
    the studies have not focused on abatements, they have produced
    some proposals that would affect the abatement process, such as
    the documentation required to support abatements. During 1993-94,
    concerns about the inventory of tax debts prompted IRS to study
    abatements at its 10 service centers. This study identified 259
    problems and referred 158 to various IRS work groups for analysis
    and implementation of any needed changes. IRS never formally
    released a final study. According to IRS records from its master
    files on individual and business Background    returns, IRS
    annually abated, on average, about 10 million tax, penalty, and
    interest assessments, totaling nearly $30 billion, in fiscal years
    1995 through 1998. In fiscal year 1998, IRS abated 11.3 million
    assessments-3.1 million tax, 4.7 million penalty, and 3.5 million
    interest assessments. These abatements totaled about $22.2 billion
    in tax, $4.8 billion in penalty, and $2.1 billion in interest
    assessments. An assessment is a formal bookkeeping entry that IRS
    makes to record the amount of tax, penalty, or interest charged to
    a taxpayer's account. An assessment establishes not only the
    taxpayer's liability for amounts due and unpaid, but also IRS'
    right to collect. Taxpayers essentially assess their taxes owed
    when they file their tax returns.3 IRS may assess additional taxes
    owed, as well as penalty and interest amounts, through an
    enforcement program.4 Taxpayers also may file an amended return or
    3IRS records the assessment as the amount of tax reported on these
    filed returns. 4Before assessing a tax deficiency, IRS is required
    to provide the taxpayer with a notice of the proposed assessment.
    Upon receiving the notice, the taxpayer has 90 days (150 days if
    outside the United States) to file a petition with the Tax Court
    for a redetermination of the deficiency. Upon expiration of the
    filing period, IRS may assess the proposed deficiency. Page 2
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 otherwise notify IRS of an error, which may lead to
    additional assessments. Section 6404 of the Internal Revenue Code
    (as well as various other sections) authorizes IRS to abate an
    assessment under certain conditions. For example, IRS abates an
    erroneous assessment, which can be caused by either IRS or the
    taxpayer.5 A taxpayer may make an error on the original tax
    return, such as not claiming deductions. Or, IRS may assess
    incorrect tax amounts as a result of errors made when matching
    income reported by taxpayers with income reported by third parties
    (such as employers) on payments made to the taxpayers. IRS abates
    a tax assessment of the correct amount for various reasons. For
    example, as a result of an audit, IRS may correctly assess an
    additional tax amount for one tax year, but a taxpayer can carry
    back net operating losses incurred in other tax years to reduce
    the additional tax liability in that prior tax year. Also, IRS
    abates an unpaid assessment that involved the correct amount of
    tax owed but that was made after the time period allowed for
    assessing additional tax liabilities. Further, IRS abates multiple
    assessments of the correct amount after that amount is paid. In
    these cases, IRS assesses multiple taxpayers (such as partners or
    officers in a business) for the amount owed by the business,
    knowing that the extra assessments are to be abated after full
    payment is received. Whenever IRS abates a tax assessment, any
    related penalty or interest assessments are also abated. Further,
    IRS abates certain penalties when a taxpayer provides a reasonable
    cause for failing to meet a responsibility, such as not paying a
    tax assessment or not filing a return on time. Reasonable causes
    can include illness or other nonfinancial hardships and reliance
    on incorrect written advice from IRS on technical issues. IRS also
    abates certain interest assessments that accrue, for example,
    because of *  an unreasonable error or delay by IRS in assigning
    staff to the case, sending notices to taxpayers, transferring a
    case to another IRS office, or performing other procedural or
    managerial actions and *  delays in filing income tax returns and
    paying taxes because of a natural disaster for those living in a
    presidentially-declared disaster area. IRS' interactions with
    taxpayers on abatements and other types of adjustments to
    taxpayers' accounts usually occur through IRS' 10 service centers
    or 33 district offices. Major activities at the service centers
    include 5IRS does not track the amounts abated because of IRS
    errors or taxpayer errors. Page 3
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 processing tax returns and related tax schedules from
    taxpayers and information returns from third parties that report
    payments, such as wages and interest. In addition, service centers
    provide services to taxpayers, such as responding to taxpayer
    inquiries, as well as perform enforcement functions, such as
    audits and collection, usually through correspondence or the
    telephone. District offices also offer services to taxpayers as
    well as perform enforcement functions. IRS staff at the district
    offices are more likely to interact with taxpayers through face-
    to-face meetings because the issues tend to be more complex or
    otherwise require more explanation. To describe IRS' process for
    making abatements from initiation through Scope and      final
    review in selected IRS locations, we talked to IRS National Office
    Methodology    work groups that could make abatements and the IRS
    office that administers penalties. We reviewed the Internal
    Revenue Manual sections and other IRS documents that govern the
    abatement process. Our visits to two service centers and two
    district offices, as discussed below, also helped us describe the
    process. Specifically, we visited an IRS service center and
    district office in the Kansas-Missouri area and a service center
    and district office in California. We chose these four locations
    in consultation with your office. We were able to do more work in
    some of the four locations, depending on which ones we visited
    first, the availability of data, and the responsiveness of IRS
    staff within the time frame of our review. Given time constraints,
    we did not visit more service centers or district offices. As a
    result, we do not know how similar or different the process was at
    the other 8 service centers and 31 district offices. Nor did we
    attempt to determine whether (1) any differences in the abatement
    process at the two service centers and two district offices
    produced significant effects, particularly for similarly situated
    taxpayers; (2) IRS staff followed the process and related criteria
    in making abatement decisions; (3) the process was appropriate and
    adequately controlled;6 or (4) IRS should be collecting more
    quantitative data on its abatement process. During each visit, we
    interviewed officials from IRS work groups that made abatements.
    We identified these groups from information provided by IRS'
    National Office and the four locations we visited. To confirm our
    understanding of the abatement process, we wrote summaries for
    each 6We did not evaluate IRS' controls for the abatement process
    because of time constraints and because we have another study
    under way that is addressing IRS' controls, including those for
    the abatement process. Page 4
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 location and received comments on these summaries from
    officials at each location as well as IRS' National Office. The
    summaries incorporating IRS' comments can be found in appendixes
    I-IV. To describe IRS' efforts to improve the abatement process,
    we interviewed officials in IRS' National Office as well as
    selected staff in field offices who had worked on a task force or
    study that addressed abatements in some way. We also collected any
    available studies. As with our work on the abatement process, we
    asked the responsible IRS officials to comment on our summary of
    these efforts. We performed our audit at IRS headquarters offices
    in Washington, D.C.; the Kansas City Service Center in Kansas
    City, MO; the Fresno Service Center in Fresno, CA; the Kansas-
    Missouri District Office in St. Louis, MO; and the Northern
    California District Office in Oakland, CA. Our work was done
    between February and June 1999 in accordance with generally
    accepted government auditing standards. On June 22, 1999, we met
    with representatives of the IRS Commissioner from the Customer
    Service and Examination Divisions as well as the Taxpayer Advocate
    and Legislative Affairs Offices to obtain their comments on a
    draft of this report, which are discussed near the end of this
    letter. At the two service centers and two district offices we
    visited, IRS' IRS' Abatement    abatement process depended on the
    type, complexity, and source of the Process Varied    assessment
    being abated. The process varied in terms of (1) how abatements
    are initiated, (2) which IRS work groups make abatement decisions,
    (3) what level of staff makes the decisions, (4) what tools guide
    the decisions, and (5) how IRS reviews quality. We did not attempt
    to evaluate whether any variations in the process affected
    abatement decisions. Nor do we know how similar or different the
    process is at the other 8 service centers and 31 district offices.
    IRS did not have quantitative data on the details of the abatement
    process, even though IRS' master files have data on the overall
    number and amount of abatements. An abatement is just one type of
    adjustment made to taxpayer accounts. IRS staff also adjust
    accounts to reflect the dates and amounts of various types of
    assessments, payments, and refunds. IRS cannot extract
    quantitative data about the abatement process from data on all
    types of adjustments. For example, IRS did not have data on the
    number of abatements made by type of IRS group and staff or
    reviewed by Page 5                   GAO/GGD-99-98 IRS' Abatement
    Process in Selected Locations B-282811 IRS supervisors.
    Determining the costs and benefits of collecting such data on the
    abatement process was beyond the scope of this report. The two
    service centers and two district offices we visited did not track
    Taxpayers and IRS Staff    how the abatements were initiated. IRS
    officials, however, identified three May Initiate Abatements
    basic ways of initiating abatements. First, taxpayers can initiate
    a request (also known as claim) for an abatement by filing an
    amended tax return (e.g., Form 1040-X for individuals and Form
    1120-X for corporations); by filing an IRS Form 843, Claim for
    Refund and Request for Abatement; by writing a letter; or by
    making a phone call. Taxpayers would generally initiate these
    requests to correct errors on the original return they filed or to
    seek relief from penalties when they have reasonable cause for
    failing to comply with tax requirements. Second, taxpayers can
    request an abatement of an additional assessment generated by an
    IRS enforcement program.7 In these cases, the taxpayer would be
    responding to a notice about the assessment, such as a collection
    notice. These taxes might have been assessed because the taxpayer
    had not responded adequately to notices about the recommended
    assessment of additional tax amounts. For example, an audit may
    recommend additional assessments that the taxpayer did not
    challenge when the audit closed. The taxpayer might later decide
    to challenge the assessment and ask IRS for an abatement.8
    Similarly, after receiving a notice of additional assessments,
    taxpayers may claim a reasonable cause for not timely paying the
    correct tax amount and ask IRS to abate certain types of
    penalties. Third, in some cases, IRS staff can initiate the
    abatement. For example, an IRS auditor might find evidence that a
    taxpayer overstated the tax liability on the original tax return.
    This evidence could lead to an abatement, depending on the results
    from the rest of the audit. 7Section 6404 (b) of the Internal
    Revenue Code states that a taxpayer may not file a request for
    abatement of income, estate, or gift tax. Rather, a taxpayer
    should dispute these tax assessments by paying the tax and filing
    a request for a refund. IRS does, however, reduce some of these
    tax assessments without payment when the taxpayer requests an
    abatement of an audit assessment and provides support for the
    abatement. These requests are known as audit reconsiderations.
    8Before IRS assesses additional taxes that an auditor recommends,
    a taxpayer can challenge the recommended assessment in Examination
    or IRS' Office of Appeals. Also, upon receiving a notice of a
    proposed assessment, a taxpayer has 90 days (150 days if outside
    the United States) to file a petition with the Tax Court. Some
    taxpayers, for whatever reasons, bypass these options, which
    results in the recommended taxes being assessed, along with
    related penalty and interest assessments. Page 6
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 Various IRS work groups at the two service centers and two
    district offices Various IRS Work Groups                  we
    visited had the authority to abate assessments. According to IRS
    Make Abatement Decisions                 officials, the type,
    complexity, and source of the assessment being abated determine
    which IRS work group makes the abatement decision. Using these
    factors as well as IRS routing criteria, a work group that
    initially receives a requested abatement is to determine whether
    it should make the abatement decision. If the determination is to
    route the abatement to another work group, the abatement process
    to be followed is to be guided by the general IRS criteria for the
    type of abatement being reviewed and the specific review process
    of that group. Each work group can abate different types of tax,
    penalty, and interest issues. Table 1 shows examples of the most
    common types or sources of abatements made by work groups at the
    two service centers, as identified by IRS officials.9 Table 1:
    Examples of Abatements Made
    Examples of abatements at two service centers in the Kansas City
    and Fresno Service    Work group
    Kansas City                              Fresno Centers, as of
    April 1999                Adjustments Branch
    Amended returns                          Amended returns
    Collection Branch
    Substitute for returna                   Substitute for returna
    Customer Service Branch
    Penalties                                Penalties Examination
    Branch                                           Category A
    claims,b                      Audit reconsiderationsc audit
    reconsiderationsc Joint Compliance Branch
    Does not existd                          Category A claimsb
    Underreporter Branch                                         Does
    not existe                          Apparent overreported income
    Automated Collection Branch
    Penalties, erroneous                     Does not existg
    substitute for returnf Document Perfection Branch
    Simple claims on                         Not applicableh amended
    returns aReturns filed by IRS on the basis of information returns
    that reported income paid to a taxpayer who did not file a tax
    return. bCategory A claims involve issues that are complex or
    sensitive, or prone to noncompliance. cAudit reconsiderations
    occur when taxpayers ask IRS to reconsider assessments made in
    prior audits. dIn Kansas City, this work is done through the
    Examination Branch. eKansas City's underreporter cases are handled
    at the Austin or Ogden Service Centers. fErroneous substitute for
    returns involve those sent to taxpayers who had filed their
    returns before receiving the SFR filed by IRS. gIn Fresno, this
    work is done as part of the Collection Branch. hAlthough Fresno
    has a Document Perfection Branch, it usually handles simple
    requests on amended returns in its Adjustments Branch. Source: GAO
    interviews and documents collected at each service center. 9Each
    service center had other work groups that made abatements, such as
    groups that deal with criminal investigations, quality assurance,
    and account services. We do not discuss these groups here because
    IRS officials told us these groups made few abatements. Page 7
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 As table 1 shows, each service center organized itself
    somewhat differently. As a result, each service center had
    branches that the other center did not have. For example, Fresno
    had a Joint Compliance Branch that did not exist in Kansas City.
    This branch dealt with, among other things, abatement requests
    (known as category A claims) that were complex, sensitive, or
    involved types of taxpayers prone to noncompliance. Kansas City
    usually handled category A requests in its Examination Branch.
    Also, Kansas City allowed clerical staff in its Document
    Perfection Branch to abate simple requests made on amended
    returns. Fresno usually handled this type of request in its
    Adjustments Branch. The two district offices generally relied on
    three divisions to abate assessments. Table 2 shows examples of
    the types or sources of abatements made by the divisions, as
    identified by officials at the district offices. Table 2: Examples
    of Abatements Made
    Examples of abatements at two district offices in the Kansas-
    Missouri and Northern         Division
    Kansas-Missouri
    Northern California California District Offices, as of April
    Collection                             Various uncollectibles,
    such as Various uncollectibles, such as 1999
    bankruptcies; various penalties bankruptcies; various penalties
    Customer Service                       Federal tax deposit penalty
    Various types of penalties Examination
    Audit reconsiderations,a claims                            Audit
    reconsiderations,a claims aAudit reconsiderations occur when
    taxpayers ask IRS to reconsider assessments made in prior audits
    Source: GAO interviews and documents collected at each district
    office. As table 2 shows, each of the three divisions at both
    districts made similar types of abatements. Although none of the
    divisions tracked the number of abatements, IRS officials
    indicated that the Collection and Customer Service Divisions made
    the most abatement decisions, many of which involved penalties.
    The officials said that in the Examination Division, the
    abatements usually involved tax assessments related to a prior
    audit, which could also involve penalties, or some form of
    taxpayer claim. In addition, at the two service centers and two
    district offices, the Office of the Taxpayer Advocate had
    authority to make certain types of abatements.10 However,
    officials at most locations we visited said that the Advocate's
    Office usually referred requests for abatements to other work
    groups (such as the Collection Division) and then tracked actions
    taken to 10The Office of the Taxpayer Advocate is to represent the
    interests of taxpayers. For abatements, the Advocate would get
    involved if taxpayers had difficulty solving their tax problems
    through IRS' regular channels or if they had major hardships in
    meeting their tax responsibilities. Page 8
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 help ensure the proper and timely resolution of a
    taxpayer's problem. Because these work groups usually made any
    related abatements, the Office of the Taxpayer Advocate would make
    few abatements compared to the other work groups. Various types
    and grades of IRS staff, ranging from clerks to mid-level Both
    Lower and Higher      staff, can make abatement decisions,
    depending on the type, complexity, Graded Staff Can Make      and
    source of the assessment being abated. Along with other duties,
    these Abatement Decisions        IRS staff handled many types of
    adjustments to taxpayers' accounts other than abatements. None of
    the work groups tracked how many of these adjustments involved
    abatements. Both service centers had a wide range of graded staff
    who made abatement decisions. The staff ranged from federal pay
    grades GS-3 to GS- 9 in one service center and GS-4 to GS-12 in
    the other.11 According to officials at the two service centers,
    staff known as customer service representatives and tax examiner
    assistants made most abatement decisions. In one service center,
    grades of customer service representatives ranged from GS-5 to GS-
    8 and tax examiner assistants ranged from GS-4 to GS-8. In the
    other service center, the grades were GS- 6 to GS-9 and GS-6 to
    GS-7, respectively. The two district offices also had various
    staff make abatement decisions in the three divisions. These staff
    ranged from federal pay grades GS-5 to GS- 13.12 According to
    officials at the two district offices, staff known as customer
    service representatives (GS-5 to GS-9) and revenue officers (GS- 7
    to GS-12) made the majority of the abatements. The two districts
    we visited did not differ very much in who made abatement
    decisions.13 According to information provided by officials at
    both service centers and Various Tools Can Guide    both district
    offices, staff making abatement decisions are to be guided by
    Abatement Decisions        such tools as training, information
    provided by the taxpayer or IRS' computers, criteria in IRS
    manuals, and supervisory involvement. Descriptions of these four
    tools follow. 11The GS, or General Schedule, system ranges from
    GS-1 to GS-15. Excluding locality or other special pay
    adjustments, the 1999 pay for GS-3 to GS-12 ranges from about
    $16,000 to about $59,000. 12Excluding locality or other special
    pay adjustments, the 1999 pay for GS-5 to GS-13 ranges from about
    $21,000 to about $70,000. 13Even so, when we asked about staff
    that made abatements, officials at the Kansas-Missouri District
    Office were more likely to identify various types of specialists
    who were to assist such staff. Page 9
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 *  IRS is to provide training on the various duties,
    including abatements, assigned to staff. The training can include
    such things as basic tax laws, IRS forms, adjustments in general,
    amended returns, and other generic tax issues. Training also can
    cover specific types of adjustments, including abatements to be
    made to taxpayer accounts. The training is to include classroom
    and on-the-job instruction. *  Staff can use various types of
    information provided by taxpayers or through IRS computers to help
    make abatement decisions. For example, taxpayers can provide
    additional information that they did not provide during an audit
    when they ask IRS to abate assessments made in that audit. Or,
    staff can use information in taxpayers' accounts to confirm
    taxpayer actions, such as the date a return was filed or a payment
    was made. To the extent that the computerized information is
    sufficient, IRS staff could use it to verify oral justifications
    from taxpayers for making the abatement. If the information is not
    sufficient, IRS may need to request additional support from the
    taxpayer. *  Criteria for making abatement decisions vary with the
    type and amount of the abatement and complexity of the issues. For
    example, the criteria for decisions about whether to abate a tax
    assessment would depend on the tax laws and regulations governing
    the specific tax issue (such as a dependency exemption) and the
    justification provided by the taxpayer in requesting the
    abatement. Also, for each type of penalty, IRS has various dollar
    tolerances that dictate the type of justification needed from the
    taxpayer to grant the abatement and whether that justification
    needs to be documented by the taxpayer rather than be provided
    orally. Because IRS labels the criteria and dollar tolerances as
    "official use only," which means the information is sensitive, we
    cannot disclose the specific criteria or tolerances. *  Dollar
    tolerances also can affect whether supervisors are to review
    proposed decisions by staff to abate assessments.14 IRS did not
    have data on how many of the 11.3 million abatements in fiscal
    year 1998 had been reviewed by supervisors before the decision was
    finalized. However, supervisors are only required to review a few
    types of abatement decisions before they are finalized, such as
    those on certain types of penalty and interest abatements as well
    as on large-dollar abatements. Also, officials at some of the
    locations we visited said that few abatement decisions would be
    reviewed by supervisors before being finalized because of the
    large number of adjustments, including abatements, to be
    processed. 14According to service center officials, supervisors
    also reviewed a small percentage of all adjustments after they
    were made in order to evaluate the performance of the staff.
    Although these reviews of closed cases did not influence the
    original abatement decisions, supervisors are required to tell
    staff to correct any errors that these reviews uncover. Page 10
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 The two service centers and two district offices each have
    a separate staff IRS Review Programs Do           to review the
    quality of decisions, including those on abatements, after Not
    Track the Quality of         they are made. None of the locations
    we visited tracked the number of Abatement Decisions
    abatement decisions reviewed for quality as either a percentage of
    all adjustments reviewed or of all abatement decisions made. The
    officials we interviewed at all locations could not say what
    percentage of abatements might be subjected to such quality
    reviews. IRS had multiple review programs because each work group
    has a different set of quality standards. Each program is to use
    the quality standards established for the types of adjustments
    made in a specific work group. For example, standards for a
    collection work group would differ from standards for an
    examination group. As a result, in both service centers, the
    Service Center Collection Quality System is to be used to review
    the quality of the work in the Collection Branch. Across the two
    district offices, IRS also had a review program for each division
    (such as the Examination Division). Officials at both service
    centers and both district offices also told us that these programs
    usually are to select cases for review on the basis of random
    sampling, and the results are to be used to identify systemic
    quality problems in an IRS work group. Due to our time
    constraints, we did not evaluate these IRS quality review
    programs. IRS' efforts to improve the abatement process have
    involved task force IRS' Efforts to Improve studies that IRS
    initiated in response to specific concerns. For example, the
    Abatement Process since 1997, task forces have studied issues,
    such as penalty administration and taxpayer treatment, because of
    concerns about taxpayer burden and equity. Although they did not
    focus on abatements, the studies have produced some proposals that
    would affect the abatement process, such as the documentation
    required to support abatements. IRS officials said they initiated
    these task forces because a 1997 report on reinventing service at
    IRS called for IRS to, among other things, promote fair and
    consistent treatment of taxpayers in penalty administration. The
    report also called for IRS to comprehensively review all penalties
    and report to Congress on its findings as well as needed
    legislative changes. The report further recommended that the
    overall process for handling penalties be streamlined. For
    example, the report mentioned that one way to streamline would be
    for IRS employees to have expanded authority to abate certain
    types of penalties on the basis of oral requests from taxpayers.
    If done, this action could reduce the burden on taxpayers by
    requiring less documentation or supervisory approval. Page 11
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations B-
    282811 In September 1998, IRS released a study by its penalty task
    force, as recommended in the 1997 report. IRS reported that for
    fiscal year 1996, 34 million penalties totaling $13.2 billion were
    assessed, of which 12 percent and 43 percent, respectively, were
    abated. Several recommendations focused on the need for (1)
    consistent treatment of taxpayers; (2) viable management of
    information systems; (3) clearer penalty policy; and (4) improved
    penalty administration to allow, among other things, IRS telephone
    assistors to make abatements for larger amounts on the basis of
    oral testimony from taxpayers. IRS officials said that legislative
    changes would be necessary to implement some of the
    recommendations. These officials also said they are considering
    the first three recommendations and are planning to expand
    authority for abating certain penalties for reasonable cause on
    the basis of oral testimony from taxpayers. Another task force on
    taxpayer equity has been studying various IRS programs and issues
    and had finished several reports as of June 1999. These programs
    and issues, for example, address taxpayers that do not file
    required tax returns, make estimated tax payments on a quarterly
    basis, or make required federal tax deposits. Also included are
    studies of taxpayers that ask IRS to reconsider an assessment made
    in a previous audit. At least three of this task force's reports
    have made proposals that could affect abatements. These proposals
    involve (1) easing interest abatement criteria through legislative
    change, (2) encouraging oral agreements on abatements between IRS
    and taxpayers over the phone to minimize documentation, and (3)
    clarifying a penalty abatement policy statement. As for other
    efforts, an IRS study of an automated program to create substitute
    returns for apparent nonfilers has suggested several steps to deal
    with unproductive or erroneous assessments that create additional
    work later, including abating these assessments. Further, IRS is
    testing an automated system to help make abatement decisions
    related to reasonable cause. IRS is also developing ways to help
    small business taxpayers meet their federal tax deposit
    requirements, which could reduce the need for abatements that are
    associated with these deposits. Finally, IRS' Collection Division
    officials said they had a team working on redesigning the
    collection process, but the team was not focusing on abatements.
    Before initiating these task forces and efforts, IRS undertook a
    major study during 1993-94 of the causes of abatements. According
    to the director of the study, IRS used about 150 employees across
    its 10 service centers. IRS did this study because of concerns
    about the inventory of tax debts-about 25 percent of IRS' accounts
    receivable were being abated. Page 12                 GAO/GGD-99-
    98 IRS' Abatement Process in Selected Locations B-282811 The study
    identified problems in various IRS processes that resulted in IRS
    and taxpayer errors that had to be corrected through abatements.
    Some examples of IRS errors included miscalculated interest,
    incorrect posting to accounts, and overlooked support for
    taxpayers' reasonable cause claims. Examples of taxpayer errors
    included using the wrong form or coupon, omitting or misstating
    taxpayer identification numbers, and making math mistakes. The
    study identified 259 potential problems, of which 158 were
    referred to the responsible IRS functions for further analysis and
    implementation of changes, if necessary, to solve a problem. The
    study team determined that the other 101 problems did not merit
    such a referral because analysts at the service centers could
    address the problem or no further changes were needed. IRS never
    formally released a final report on the study results. On June 22,
    1999, we met with representatives of the IRS Commissioner Agency
    Comments    from the Customer Service and Examination Divisions as
    well as the Taxpayer Advocate and Legislative Affairs Offices.
    These representatives said that our report provided good
    information and appropriately described the abatement process at
    selected organizations in the district offices and service
    centers. We are sending copies of this report to Representative
    Charles B. Rangel, Ranking Minority Member, House Committee on
    Ways and Means, and Senator Daniel P. Moynihan, Ranking Minority
    Member, Senate Committee on Finance. We are also sending copies to
    the Honorable Robert E. Rubin, Secretary of the Treasury; the
    Honorable Charles O. Rossotti, Commissioner of Internal Revenue;
    the Honorable Jacob Lew, Director, Office of Management and
    Budget; and other interested parties. We will also send copies to
    those who request them. If you or your staff have any questions
    concerning this report, please contact me or Tom Short on (202)
    512-9110, or Royce Baker on (913) 384- 3222. Other major
    contributors are acknowledged in appendix V. Cornelia M. Ashby
    Associate Director, Tax Policy and Administration Issues Page 13
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Contents 1 Letter 16 Appendix I                 Kansas City Groups
    That Make Abatements                                       16
    Abatement Processes        Staffing
    20 Abatement Training
    21 at the Kansas City         Supervisory and Quality Reviews
    22 Service Center 25 Appendix II                Fresno Groups That
    Make Abatements                                            25
    Abatement Processes        Staffing
    30 Abatement Training
    30 at the Fresno Service      Supervisory Review
    31 Center                     Quality Review
    32 33 Appendix III               Kansas-Missouri Groups That Make
    Abatements                                   33 Abatement
    Processes        Staffing
    35 Abatement Training
    36 at the Kansas-Missouri Supervisory Review
    37 District Office            Quality Review
    38 39 Appendix IV                Northern California Groups That
    Make Abatements                               39 Abatement
    Processes        Staffing
    42 Abatement Training
    42 at the Northern            Supervisory Review
    43 California District        Quality Review
    44 Office 45 Appendix V GAO Contacts and Staff Acknowledgments
    Tables                     Table 1: Examples of Abatements Made in
    the Kansas                             7 City and Fresno Service
    Centers, as of April 1999 Page 14                GAO/GGD-99-98
    IRS' Abatement Process in Selected Locations Contents Table 2:
    Examples of Abatements Made in the Kansas-
    8 Missouri and Northern California District Offices, as of April
    1999 Table I.1: Examples of Abatements at the Kansas City
    17 Service Center Table I.2: Peak Staffing Levels at Kansas City
    by Branch                              21 and Type and Grade Level
    of Staff, March 1999 Table I.3: KCSC Closed Cases, Cases Reviewed
    for                                      24 Quality, and
    Requirements for Supervisory Review in 1998 Table II.1: Examples
    of Abatements at Fresno Service
    26 Center Table II.2: Peak Staffing Levels at Fresno by Type of
    Staff                           30 and Grade Level, April 1999
    Table III.1: Examples of Abatements at Kansas-Missouri
    33 District Office Table III.2: Staffing Levels at Kansas-Missouri
    by Type of                            36 Staff and Grade Level,
    April 1999 Table IV.1: Examples of Abatements at Northern
    39 California District Office Table IV.2: Staffing Levels by Type
    of Staff and Grade                                42 Level, May
    1999 Abbreviations EIC                 Earned income credit FSC
    Fresno Service Center GS                  General Schedule IRS
    Internal Revenue Service KCSC                Kansas City Service
    Center KMDO                Kansas-Missouri District Office NCDO
    Northern California District Office PRP                 Problem
    Resolution Program SFR                 Substitute for return Page
    15                        GAO/GGD-99-98 IRS' Abatement Process in
    Selected Locations Appendix I Abatement Processes at the Kansas
    City Service Center IRS' Kansas City Service Center (KCSC)
    processes individual and business tax returns, payments, and
    taxpayer inquiries from Illinois, Iowa, Minnesota, Missouri, and
    Wisconsin. The service center also responds to taxpayer inquiries
    nationwide through toll-free numbers. In addition, KCSC conducts
    compliance activities, such as doing audits, securing delinquent
    returns, and collecting unpaid taxes. Different IRS work groups
    make abatements at the Kansas City Service Kansas City Groups
    Center.1 According to KCSC officials, three divisions-Compliance,
    That Make Abatements Customer Service, and Processing-routinely
    make abatements. Each division has at least one work group that
    makes abatement decisions. Additionally, the Taxpayer Advocate's
    Office can make abatements. According to IRS officials, the
    Quality Assurance Management Support Division has abatement
    authority, but due to the nature of its workload it rarely makes
    abatements. As a result, we did not summarize the division's
    processes. Each of the work groups is responsible for making
    abatements of different types. Table I.1 shows these groups as
    well as examples of the types of abatements made by each. 1An
    abatement occurs when IRS reduces the assessment of tax, penalty,
    or interest against taxpayers for various reasons (e.g., an
    incorrect assessment or taxpayer had a reasonable cause for not
    complying with filing or payment requirements). An abatement may
    be initiated by a request from a taxpayer, by a taxpayer in
    response to IRS actions, or solely by IRS. For example, a taxpayer
    may file an amended return to claim changes to the original
    return. Factors such as the type, complexity, and source of the
    abatement determine which IRS group makes the abatement. Page 16
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix I Abatement Processes at the Kansas City Service Center
    Table I.1: Examples of Abatements at the Kansas City Service
    Center Division or office            Work group
    Type of abatement Compliance                    Collection Branch
    Substitute for return (SFR)a Examination Branch
    Claims, including category A claims,b SFR, and audit
    reconsiderationsc Customer Service              Automated
    Collection Systems Branch Erroneous SFR cases,d penalties abated
    for reasonable cause Adjustments/Correspondence Branch
    Claims on amended returns, various types of penalties Customer
    Service Branch                       Various types of penalties
    Taxpayer Relations Branch                     Taxpayer inquiries
    about assessments Processing                    Document
    Perfection Branch                    Simpler claims made by
    individuals Taxpayer Advocate Office      Problem Resolution
    Program (PRP)              Selected cases that meet PRP criteria
    (e.g., not resolved elsewhere in IRS) aIRS files a substitute for
    return when a taxpayer has not filed a tax return but IRS receives
    third-party information that shows enough income to file a tax
    return. bCategory A claims involve issues that are complex,
    sensitive, or prone to noncompliance. cAudit reconsiderations
    occur when taxpayers ask IRS to reconsider assessments made in
    past audits. dErroneous SFRs involve those sent to taxpayers who
    had filed their returns before receiving the SFR filed by IRS.
    Source: Information provided by IRS officials. In the following,
    we briefly describe the types of abatements made at each of the
    work groups. We also identify the workload at each work group for
    all types of adjustments to taxpayers' accounts, including
    abatements. None of the groups, however, had data on the portion
    of their workload that involved abatements. We did not
    independently verify the accuracy of workload data provided by
    IRS. According to IRS officials, the Compliance Division has two
    branches that Compliance Division
    routinely make abatements, as summarized below. Collection Branch
    The Collection Branch is responsible for collecting taxes from
    individuals who have filed but have not paid the total amount due
    or who have not filed their tax return. For these nonfilers,
    according to branch officials, a common abatement comes from
    substitute for return (SFR) cases. Taxpayers receiving an SFR may
    choose to file a return in order to reduce their tax liability.
    When the return is filed and accepted by IRS, the branch is to
    abate the difference between the taxes assessed on the SFR and the
    taxpayer's return. If the taxpayer's return meets certain
    criteria, such as a large difference between the taxpayer's and
    SFR's assessments, classification staff from the Examination
    Branch are to review the return and determine whether to audit it.
    For fiscal year 1998, Collection Branch officials reported that
    the branch closed 1.2 million nonfiler and late payment cases, but
    it did not track how many of them involved abatements. Page 17
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix I Abatement Processes at the Kansas City Service Center
    Examination Branch              The Classification Section in the
    Examination Branch is the only section in the branch that
    routinely makes abatements in the course of its operations,
    according to Examination officials. The Classification Section is
    responsible for screening questionable claims, SFR returns, and
    requests for audit reconsideration. The Classification Section is
    to receive category A claims from the Adjustments/Correspondence
    Branch (also referred to as the Adjustments Branch) for acceptance
    or selection for audit. Category A claims are more complex,
    sensitive, or prone to noncompliance than other claims. For
    calendar year 1998, Classification Section officials reported that
    the section screened more than 26,000 claims, but it did not track
    the number that resulted in abatements. Further, the
    Classification Section is to review questionable returns filed by
    taxpayers to replace SFRs and requests for audit reconsiderations.
    When reviewing SFR cases and audit reconsiderations,
    Classification is to accept the data provided by the taxpayer in
    support of an abatement, or select the case for audit.2 If a case
    is selected, staff in the Examination Branch or a district office
    are to decide on any abatements. For calendar year 1998,
    Classification Section officials reported that the section
    received nearly 11,000 SFR, audit reconsideration, and other
    cases. These officials did not track how much of this work
    resulted in abatements. The Customer Service Division has the
    following branches that can make Customer Service Division
    abatements. Automated Collection Systems    The Automated
    Collection Systems Branch operates an automated call Branch
    system, which is used to collect taxes from taxpayers that have
    delinquent accounts and to secure delinquent returns. Abatements
    can arise when IRS staff talk over the telephone with taxpayers
    who have had levies placed on their assets because of delinquent
    taxes or have received a notice that IRS has no record of their
    return. In particular, the branch is supposed to make abatements
    in erroneous SFR cases-cases in which IRS erroneously believes
    that a taxpayer failed to file a required tax return, but the
    taxpayer had, in fact, filed. The branch also can abate penalties
    if the taxpayer has a reasonable cause for not complying
    originally. For calendar year 1998, IRS officials said that the
    2In reviewing audit reconsiderations, the staff typically review
    the adequacy of documentation provided by the taxpayer to counter
    the additional assessments made after the past audit. Page 18
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix I Abatement Processes at the Kansas City Service Center
    Automated Collection Systems Branch worked more than 119,000
    cases, but it did not track how many of them involved abatements.
    Adjustments/Correspondence    The Adjustments/Correspondence
    Branch receives inquiries from Branch
    taxpayers by phone or correspondence. According to branch
    officials, most taxpayer contacts are in response to penalty
    notices. The officials stated that the branch often abates
    failure-to-file penalties for reasonable cause. The branch is also
    supposed to process claims that require additional information
    from the taxpayer or from IRS databases. For fiscal year 1998, the
    branch reported closing over 989,000 cases, but it did not track
    how many of them involved abatements. Customer Service Branch
    The Customer Service Branch receives telephone inquiries from
    taxpayers about their assessments. According to IRS officials,
    taxpayers usually call to resolve issues on their tax accounts
    after receiving an IRS notice. These officials stated that late
    payment and failure-to-file penalties are their most common
    abatement cases. For fiscal year 1998, the toll-free telephone
    site answered over 1.2 million telephone calls. Branch officials
    did not track how many of these calls involved abatements.
    Taxpayer Relations Branch     Taxpayer Relations is to help
    taxpayers resolve a wide variety of problem cases. In addition to
    the taxpayers, the branch receives referrals from other IRS
    offices, congressional offices, and the White House. According to
    IRS officials, typical abatements involve penalties and incorrect
    tax assessments. For calendar year 1998, IRS officials reported
    that the branch worked nearly 100,000 cases, but it did not track
    how many of these cases involved abatements. Processing Division
    Document Perfection Branch    Within the division, only the
    Document Perfection Branch made abatements. The Document
    Perfection Branch is to screen amended returns from individual
    taxpayers and identify those with issues that require additional
    information from a taxpayer or IRS computer systems. If additional
    information is not required, Document Perfection is to process the
    return, along with any resulting abatement. Returns that require
    information and amended returns from business taxpayers are
    forwarded to the Adjustments/Correspondence Branch. Document
    Perfection officials reported that the branch screened about
    262,000 amended returns in calendar year 1998. The officials also
    reported that Document Perfection processed about 95,000 of these
    cases and routed the rest to other functions for processing.
    Branch officials did not track how many of these cases resulted in
    abatements. Page 19                     GAO/GGD-99-98 IRS'
    Abatement Process in Selected Locations Appendix I Abatement
    Processes at the Kansas City Service Center The Taxpayer
    Advocate's Office was created to help taxpayers who have Taxpayer
    Advocate's Office been unsuccessful in resolving their problems
    through normal channels of assistance. The office ultimately
    reports to the National Taxpayer Advocate. Its involvement with
    abatements can arise from two taxpayer assistance programs-
    hardship relief requests and the Problem Resolution Program (PRP),
    which assists taxpayers in resolving persistent problems.
    Taxpayers may submit Form 911 asking for hardship relief under the
    Application for Taxpayer Assistance Order, according to IRS
    officials. The Advocate's staff makes a determination on these
    requests. PRP exists to help taxpayers that have been unsuccessful
    in resolving their tax problems through regular channels. The
    Kansas City Taxpayer Advocate has a small staff; thus, for most
    PRP cases, it relies on staff in the divisions, such as those in
    Customer Service, to try to resolve the problem. The Taxpayer
    Advocate monitors the progress of the cases until they are
    resolved. Staffing for some of the branches varies with the time
    of year, according to Staffing                         IRS
    officials. During peak periods (usually during the months when
    taxpayers are filing returns), staffing levels may temporarily
    increase, and the staff may sometimes be temporarily assigned to
    Customer Service to answer taxpayer inquiries about tax law or
    filing requirements. Table I.2 shows the peak staffing level by
    the type and grade (GS) level of staff who make abatement
    decisions for those work groups that make most of the abatements,
    according to IRS officials. Most service center staff making
    abatements were tax examining assistants, customer service
    representatives, or tax examining clerks, according to IRS
    officials. Tax examining assistants are responsible for obtaining
    returns and other taxpayer information necessary to adjust
    taxpayer accounts and examining selected tax issues on income tax
    returns. Customer service representatives provide assistance to
    individuals and businesses through telephone contact. Tax
    examining clerks have duties that are less complex. They review
    IRS documents and tax returns, prepare coded entries to amend
    records, and refer questionable returns and documents for review.
    Page 20                     GAO/GGD-99-98 IRS' Abatement Process
    in Selected Locations Appendix I Abatement Processes at the Kansas
    City Service Center Table I.2: Peak Staffing Levels at Kansas City
    by Branch and Type and Grade Level of Staff, March 1999 Tax
    examining Tax examining                  Correspondence Customer
    service                    Tax assistant                 clerk
    examination technician             representative auditor Division
    Branch                  (GS-4 to GS-8) (GS-3 to GS-5)
    (GS-5 to GS-7)          (GS-5 to GS-8) (GS-9) Total Compliance
    Collection                         185                    0
    0                       0           0    185 Examination
    49a                  13b                            96c
    01 2 170 Customer      Automated Collection Service       Systems
    174                    0                              0
    0           0    174 Adjustments                             0
    0                              0                   264d
    0    264 Customer Service                        0
    0                              0                   108e
    0    108 Taxpayer Relations                  58
    0                              0                       0
    0     58 Processing    Document Perfection                 64f
    266g                              00 0 330 Totalh
    530                  279                             96
    372            12 1,289 Note 1: Staffing levels do not include
    managerial and support staff. Note 2: Branches with a consistent
    level of staffing will not have a nonpeak staffing level. aNonpeak
    staff of 45 bNonpeak staff of 11. cNonpeak staff of 70. dNonpeak
    staff of 108. eNonpeak staff of 99. fNonpeak staff of 31. gNonpeak
    staff of 0. hDoes not include 5 staff from the Taxpayer Advocate's
    Office. Source: IRS officials. In general, training to be given in
    the work groups that made abatements Abatement Training
    did not focus on abatements; rather, it focused on the range of
    duties for the various types of staff. Through our interviews and
    reviews of documents at KCSC, we learned the following about the
    training that each work group should provide. Before working on a
    program they have not worked before (such as SFR Collection Branch
    cases), tax examining assistants are to receive between 3 and 10
    days of classroom training on that program. After completing the
    training, they are to be assigned on-the-job instructors to
    provide additional guidance on working cases. Staff doing
    abatements are to receive training on the basic types of
    Examination Branch                         adjustments associated
    with the income tax laws. They also are to receive on-the-job
    instruction as they do audits. New customer service
    representatives are to receive about 3 months of Automated
    Collection                       classroom training. The initial
    training is to address basic skills, such as Systems Branch
    entering data into IRS' computer system. Afterward, the customer
    service representatives are to take classes on each of the
    programs handled in the Page 21                           GAO/GGD-
    99-98 IRS' Abatement Process in Selected Locations Appendix I
    Abatement Processes at the Kansas City Service Center branch.
    After a class on a particular program, the customer service
    representatives are to work that program for a few weeks to
    reinforce what they have learned. Then, they are to take a class
    on another program. Training is to cover the abatement of tax and
    penalties in some form. Adjustments/                 Customer
    service representatives responsible for business returns initially
    Correspondence Branch        are to receive a 5-week training
    class on the Business Master File and employment tax forms. Later,
    they are to receive training on IRS forms and notices. Then, they
    are to receive several weeks of on-the-job training. Customer
    service representatives responsible for individual tax returns are
    to receive training on the Individual Master File as well as on
    amended returns, penalty abatements, and refunds for individuals.
    The training for abating selected types of interest assessments
    requires on-the-job coaching for several months. Before taking
    phone calls in which the taxpayer is asking for penalty Customer
    Service Branch      abatements, a new staff member is to receive
    courses on determining penalty abatements. A staff member working
    on Business Master File cases is also supposed to attend courses
    on computing and abating penalties associated with the deposit of
    federal taxes. All staff working abatement cases are to receive
    training on Taxpayer Relations Branch    comprehending computer
    transcripts, using IRS' computer system, and adjusting accounts on
    the Individual and Business Master Files, including making
    abatements. In addition, staff are to receive specific training on
    programs such as Problem Resolution and Penalty Appeals, which can
    result in abatements. New hires are to receive a 10-day class on
    the Form 1040. Staff that have Document Perfection          prior
    IRS experience are to receive between 4 and 9 days of training,
    Branch                       depending on their duties. A class on
    editing amended returns is required for staff that review such
    returns and determine abatements and assessments. Staff making the
    abatement decision usually adjust the taxpayer's account,
    Supervisory and              according to IRS officials. The
    exceptions are in the Examination and Quality Reviews
    Document Perfection Branches. Staff in these branches recommend
    abatements and forward the case to other staff who are responsible
    for adjusting a taxpayer's account. IRS officials described two
    types of supervisory review of the abatement decisions made by
    staff: one occurring before the decision is made, and Page 22
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix I Abatement Processes at the Kansas City Service Center
    one after. The latter supervisory review of closed decisions is
    done to evaluate employee performance. IRS officials also
    described various types of quality review programs. Reviewers in
    these programs were to review cases closed in the work group to
    measure adherence to specific quality standards, which varied with
    each work group and type of case. According to staff we
    interviewed, the closed cases for review were to be selected using
    random sampling.3 Neither the supervisory nor quality reviews
    solely addressed abatements; rather, they covered all types of
    adjustments, including assessments and abatements. As a result,
    KCSC officials did not have data on the percentage of abatement
    decisions that were reviewed. IRS officials said that other than
    for a few specific types of cases, the first type of supervisory
    review, which would occur before the abatement decision, was
    usually not required. Exceptions were abatements that involved
    certain types of civil penalties over a specific dollar amount,
    certain types of Examination assessments, and a selected type of
    interest assessment. Specific criteria associated with these types
    of abatements are considered to be sensitive information and may
    not be disclosed. The work groups we visited had some data on the
    review of various types of closed cases by supervisors or quality
    review staff. Table I.3 shows the number of cases closed and
    reviewed for quality and the requirements for supervisory review
    for purposes of evaluating staff performance. As noted in table
    I.3, the number of closed cases subjected to supervisory review
    for performance evaluation purposes differed in each branch. For
    example, Customer Service required its supervisors to review eight
    telephone calls and four paper cases per month. According to
    officials in all the branches, these requirements meant that only
    a small percentage of all cases would be reviewed. For example, a
    supervisor would be likely to review about 1 percent of the phone
    calls that customer service representatives answer in a month.
    About 10-15 percent of Taxpayer Relations' completed cases would
    be reviewed, according to branch officials. If supervisors were to
    find a performance deficiency, they should tell the staff member
    to correct any errors, and they might choose to review all cases
    closed by that staff member. 3The scope and time frame for our
    work did not allow us to verify whether these closed cases were
    selected through random sampling or to analyze the results of the
    various types of quality reviews. Page 23
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix I Abatement Processes at the Kansas City Service Center
    Table I.3: KCSC Closed Cases, Cases Reviewed for Quality, and
    Requirements for Supervisory Review in 1998 Total closed
    Fiscal or calendar Number reviewed            Supervisory review
    KCSC branch                       cases                      year
    1998              for quality            requirements Collection
    1,225,171                  Fiscal                 8,403
    8 per month per employee Examination                       37,168
    Calendar               427                    Quarterly review of
    workload of each employee. Adjustments/Correspondence
    989,118                    Fiscal                 461
    5 per week per employee Customer Service                  Calls:
    1,211,273           Fiscal                 Calls: 1,457
    8 calls and 4 paper cases per Paper 20,798
    Paper: 435             month per employee Automated Collection
    Systems      Calls: 90,597              Calendar
    Calls: 579             3-5 calls and 5 paper cases Paper: 28,456
    Paper: 1,681           per month per employee Taxpayer Relations
    99,542                     Calendar               406
    10-15 per employee per week Document Perfection
    Screened: 261,664          Calendar               440
    30-47 per employee per week Adjusted: 94,525 Note: All numbers
    include both abatement and assessment cases because IRS does not
    track abatement cases separately. Source: Developed from
    interviews with IRS officials. Separate offices in the service
    center managed the quality review programs. For example: *  The
    Quality Assurance Branch was to do quality reviews of cases closed
    in the Adjustments/Correspondence, Customer Service, Taxpayer
    Relations, and Document Perfection Branches. This review program
    is called the Program Analysis System. *  Collection Branch
    correspondence cases are to be reviewed under the Service Center
    Collection Quality System. *  The Automated Collection Systems
    Branch has two review systems. Toll- free calls are to be reviewed
    under the Quality Management Information System. Correspondence
    cases are to be reviewed under the Written Products Data
    Collection Instrument program. *  Examination Branch closed cases
    are to be reviewed by Quality Measure Support staff. *  Taxpayer
    Advocate cases are to be reviewed at the Brookhaven Service Center
    Centralized Quality Location in New York. Quality review officials
    told us that they do not correct defective cases. Instead, they
    are to report any errors they find to the appropriate official in
    the branch where the case originated. The branch official then is
    to work with the employee who made the error to correct the
    mistake. Page 24                         GAO/GGD-99-98 IRS'
    Abatement Process in Selected Locations Appendix II Abatement
    Processes at the Fresno Service Center The Fresno Service Center
    (FSC) processes various types of tax returns, conducts audits
    through correspondence, and responds to taxpayer inquiries from
    Hawaii and parts of California. FSC also responds to taxpayer
    inquiries nationwide through IRS' toll-free numbers. In addition
    to auditing, FSC operates compliance programs that use third-party
    information reporting to identify taxpayers who do not file tax
    returns or who file returns but understate their tax liability.1
    Different IRS work groups make abatements at the Fresno Service
    Center.2 Fresno Groups That    Three divisions, including
    Compliance, Customer Service, and Quality Make Abatements
    Assurance and Management Support, can make abatements. Each
    division also has at least one branch that makes abatement
    decisions. Additionally, the Taxpayer Advocate's Office can make
    abatements. These work groups are responsible for making different
    types of abatements. Table II.1 shows the work groups as well as
    examples of the type of abatements made by each. 1In this
    Information Reporting Program, IRS computers match information
    reported by third parties, such as banks and employers, to
    information reported on tax returns. If this match indicates that
    a taxpayer did not report all income or file a tax return, staff
    at the service center are to contact the taxpayer to resolve the
    discrepancy. 2An abatement occurs when IRS reduces the assessment
    of tax, penalty, or interest against taxpayers for various reasons
    (e.g., an incorrect assessment or taxpayer had a reasonable cause
    for not complying with filing or payment requirements). An
    abatement may be initiated by a request from a taxpayer, by a
    taxpayer in response to IRS actions, or solely by IRS. For
    example, a taxpayer may file an amended return to claim changes to
    the original return. Factors such as the type, complexity, and
    source of the abatement determine which IRS group makes the
    abatement. Page 25
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix II Abatement Processes at the Fresno Service Center Table
    II.1: Examples of Abatements at Fresno Service Center Division or
    office          Work group
    Type of abatement Compliance                  Examination Branch
    Audit reconsiderationa and audits Criminal Investigation Branch
    Overstated income from false W-2s (Statement of Earnings) Joint
    Compliance Branch                           Category A claimsb and
    interest claims, substitute for return,c offer-in-compromise,
    audit reconsideration Underreporter Branch
    Responses to IRS underreporter notices Customer Service
    Customer Service Branch                           Taxpayer
    inquiries about assessments Adjustments Branch
    Claims on amended returns filed by taxpayers Collection Branch
    Substitute for return Quality Assurance and       Accounting
    Branch                                 Credits on masterfile
    accounts Management Support          Quality and Management
    Support Branch             Various types of abatements based on
    reviews of notices sent to taxpayers Taxpayer Advocate Office
    Problem Resolution Program and Taxpayer Various types of taxpayer
    claims that meet set criteria (e.g., Advocate
    problems not satisfactorily handled by other IRS groups) aAudit
    reconsideration occurs when taxpayers ask IRS to reconsider
    assessments made in past audits. bCategory A claims involve issues
    that are complex, sensitive, or prone to noncompliance. cIRS files
    a substitute for return when a taxpayer has not filed a tax return
    but IRS receives third-party information that shows enough income
    to file a tax return. Source: Information provided by IRS
    officials. In the following, we briefly describe the types of
    abatements made at each of the work groups. We also identify the
    case workload at each group for all types of adjustments,
    including abatements, to a taxpayer's account. However, none of
    these groups had data on the portion of the workload that involved
    abatements. The Compliance Division has four branches that can
    make abatements, as Compliance Division
    summarized below. Examination Branch                          The
    Examination Branch is responsible for conducting correspondence
    audits at the service center. Abatements can occur when taxpayers
    ask IRS to reconsider (or reaudit) assessments made in past
    audits. According to IRS officials, in these audits, the taxpayer
    typically finds documentation that counters the additional
    assessments. If IRS accepts the taxpayer's documentation, the
    additional assessments are to be abated. The Examination Branch
    may also make various types of abatements in cases referred by the
    Criminal Investigation Branch or by the National Office. The
    branch also may abate assessments arising from the computer
    matching that IRS does to identify math and other errors. During
    fiscal year 1998, the branch processed nearly 132,000 cases.
    Additionally, it processed about 285,000 amended returns (1040X).
    Page 26                           GAO/GGD-99-98 IRS' Abatement
    Process in Selected Locations Appendix II Abatement Processes at
    the Fresno Service Center Examination officials did not track
    which cases had abatements; however, branch officials said that
    the branch abates few assessments. Criminal Investigation Branch
    The Criminal Investigation Branch is responsible for investigating
    all kinds of criminal activity related to the tax system. A
    typical abatement case involves a taxpayer filing a false Form W-
    2, Statement of Earnings, claiming excessive income and withheld
    tax. In these cases, the taxpayer claims excessive income in order
    to claim an excessive earned income credit (EIC). The taxpayer
    claims but never pays the excessive withheld tax in order to get a
    tax refund. Upon identifying these fraudulent schemes, the branch
    is to abate the excess tax liability that was claimed (but not
    paid) and to stop the erroneous refund or collect the overpaid EIC
    and refund. Joint Compliance Branch          The Joint Compliance
    Branch has three sections that process abatement cases.
    Classification and Research. This section processes category A
    claims referred from the Adjustments Branch as well as interest
    abatement cases. Category A consists of claims and amended returns
    that are more complex, sensitive, or prone to noncompliance than
    other claims. Selected category A claims are referred to field
    offices for further examination and possible abatement decisions.
    The abatement decisions for nonselected category A claims are made
    in Joint Compliance. During fiscal year 1998, about 18,300
    category A claims were processed, and about 2,000 were sent to
    field offices. The section also processed about 400 claims for
    interest abatement. Automated Substitute for Return. This section
    processes abatements for the amounts overassessed on a substitute
    for return (SFR). These abatements are necessary when the taxpayer
    files a delinquent return that reports a lower tax liability than
    that assessed on the substitute return prepared by IRS. During
    fiscal year 1998, the section chief estimated that the branch had
    made between 500 and 1,000 such abatements at Fresno.
    Miscellaneous Balance Due. This section processes offers-in-
    compromise for wage earners with income under $10,000,3 and trust
    fund recovery 3By agreeing to an offer-in-compromise with a
    taxpayer, IRS accepts a lower dollar amount to settle a balance
    due. FSC is planning a prototype for making offer-in-compromise
    abatements for wage earners and schedule C and F returns of up to
    $50,000. Page 27
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix II Abatement Processes at the Fresno Service Center
    cases.4 Branch officials did not track how much of the workload
    involved abatements. Underreporter Branch         The
    Underreporter Branch is to process cases involving the amount of
    income reported on tax returns. These cases are generated in IRS'
    Martinsburg Computing Center by comparing income amounts reported
    on information returns and on the tax return. Overall, the typical
    case involves a taxpayer underreporting income on the tax return.
    However, in the typical abatement case, the taxpayer overstates
    some type of income on the tax return, thus overstating the tax
    liability. To get this overstated tax liability abated, the
    taxpayer must file an amended return. The Underreporter Branch at
    FSC processed about 11,400 cases that potentially required
    abatements. Branch officials, however, did not track how many
    actual abatements were made. The Customer Service Division has the
    following branches that can make Customer Service Division
    abatements. None of the branches had information on the number of
    abatements made. Customer Service Branch      The Customer Service
    Branch receives taxpayer inquiries about assessments by phone or
    correspondence. These inquiries are usually in response to notices
    or correspondence sent by IRS about various types of possible
    errors on a tax return. An abatement may occur when a taxpayer
    requests that IRS abate a failure-to-file penalty due to
    reasonable cause. Adjustments Branch           The Adjustments
    Branch also may process abatements initiated through telephone
    contacts with taxpayers about their assessments. Further, the
    branch is responsible for processing claims on amended returns.
    However, as noted earlier, category A claims are to be referred to
    the Joint Compliance Branch and some non category A claims may be
    handled by the Examination Branch. Collection Branch
    The Collection Branch is responsible for call sites at which
    abatements may arise when taxpayers telephone IRS staff about
    various types of assessments. Branch officials said the primary
    source of abatements is the SFR program, in which taxpayers have
    received a substitute return and IRS has taken action to collect
    the tax shown on it. If the taxpayer then files a return showing a
    lower tax that is accepted by IRS, the branch is to abate the
    difference between the tax amounts assessed on the substitute
    4Trust fund recovery involves the abatement of trust fund
    penalties assessed against one or more taxpayers when the balance
    due to the Social Security Trust Fund is received from one of
    these taxpayers (usually an officer of the business that owed
    trust fund taxes). Page 28
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix II Abatement Processes at the Fresno Service Center
    return and taxpayer's return. During fiscal year 1998, the branch
    had about 383,000 phone contacts and 2.8 million pieces of
    correspondence. However, the branch did not track the number of
    contacts that involved abatements. The following branches in the
    Quality Assurance and Management Support Quality Assurance and
    Division process abatements. Management Support Division
    Accounting Branch                 Accounts Services is the only
    section that makes abatement decisions in the Accounting Branch.
    Its workload is generated by the Martinsburg Computing Center and
    consists of tax returns with unsettled credit balances. These
    credit balances may have resulted from SFRs, audits, math errors,
    and other transactions. During fiscal year 1998, Accounts Services
    processed nearly 113,000 adjustment cases, but it did not track
    how many involved abatements. Quality and Management
    The Quality and Management Support Branch is responsible for
    measuring Support Branch                    the quality of actions
    in other branches by reviewing closed cases. Its Output Review
    Section is to review notices to be sent to taxpayers and is to
    make abatements if errors are found. Errors that are found in
    other quality reviews are to be referred to the initiating branch
    for correction. During fiscal year 1998, the Output Review Section
    reviewed about 37,000 individual notices and nearly 24,000
    business notices. IRS officials did not have information on how
    many of these reviews involved abatements. The Taxpayer Advocate's
    Office reports to the Executive Office of Service Taxpayer
    Advocate's Office Center Operations that, in turn, reports to the
    National Taxpayer Advocate. The office is responsible for the
    Problem Resolution Program, which is to help those who meet
    certain criteria, such as taxpayers that have any contact *
    indicating that IRS' systems have not resolved the taxpayer's
    problems, *  indicating that the taxpayer has not received an IRS
    response by the date promised, or *  involving the same issue at
    least 30 days after an initial inquiry or complaint, or 60 days
    for an original or amended return. During fiscal year 1998,
    Fresno's Taxpayer Advocate's Office closed over 20,000 cases, but
    it did not track how many of them included abatements. Page 29
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix II Abatement Processes at the Fresno Service Center
    Staffing for some work groups varies with the time of year and the
    Staffing                                         function of the
    group. During peak periods (usually during the months that
    taxpayers are filing returns), staffing levels may temporarily
    increase, and the staff may sometimes be used for work other than
    making adjustments, such as answering taxpayer inquiries about the
    tax law or filing requirements. Table II.2 shows the peak staffing
    level by the type and grade (GS) level of staff who make abatement
    decisions for those work groups that make most of the abatements,
    according to IRS officials. Table II.2: Peak Staffing Levels at
    Fresno by Type of Staff and Grade Level, April 1999 Tax examiner
    Revenue agent/                    Account Customer service
    assistant           tax auditor       technicians
    representative Division or office     Work group
    (GS-6 to GS-7) (GS-9 to GS-12) (GS-4 to GS-7)
    (GS-6 to GS-9) Total Compliance             Examination
    333a                     00
    0 333 Criminal Investigation                                 56
    0                   0                       0     56 Joint
    Compliance                                      124
    20                   0                       0    144
    Underreporter                                        206b
    00                                          0 206 Customer Service
    Customer Service                                         0
    0                   0                     354    354 Adjustments
    0                    0                   0                     365
    365 Collections                                           316
    0                   0                       0    316 Quality
    Assurance and Accounting
    176                     0               104c
    0    280 Management Support Quality and Management Support
    175d                     00
    0 175 Taxpayer Advocate's    Problem Resolution and Taxpayer
    Office                 Advocate
    73                     0                   0
    0     73 Total
    1,459                    20                104
    719 2,302 Note: Branches with a consistent level of staffing will
    not have a nonpeak staffing level. aNonpeak staff of 258 bNonpeak
    staff of 136. cNonpeak staff of 265. dNonpeak staff of 135.
    Source: IRS officials. For the most part, those making abatements
    were tax examiner assistants and customer service representatives.
    These staff had varying duties, including reviewing notices and
    interest computations, responding to customer inquiries,
    processing correspondence, reviewing tax returns to detect fraud,
    and resolving taxpayer problems. In general, training to be given
    in the work groups that made abatements Abatement Training
    did not focus on abatements. Rather, the training focused on the
    range of duties for the various types of staff. Based on our
    discussions at Fresno, the following briefly describes the
    training to be provided. Tax examiners assistants are to receive
    40 hours of initial classroom Examination Branch
    training, plus 40 hours of on-the-job training; 80 hours of
    classroom Page 30                             GAO/GGD-99-98 IRS'
    Abatement Process in Selected Locations Appendix II Abatement
    Processes at the Fresno Service Center training on basic income
    tax; 80 hours of classroom training, plus 120 hours of on-the-job
    training on amended returns; 40 hours of classroom training on
    EIC, plus 40 hours of on-the-job training; and 40 hours of
    classroom training as a refresher each year. Newly hired staff are
    to receive 2 weeks of training followed by 2-4 months Criminal
    Investigation             of on-the-job training. All staff are to
    attend a 2-week refresher class each Branch
    year. Joint Compliance staff are to receive classroom and on-the-
    job training Joint Compliance Branch            that covers
    various topics, such as the guidance and instructions in the
    Internal Revenue Manual, the processes for making adjustments, and
    the tax law. Branch staff are to receive annual training on phases
    of the underreporter Underreporter Branch               programs
    being worked for a tax year. This training is to include screening
    cases, writing responses, reviewing statutes, and learning other
    core skills. Staff making interest abatements also are to attend
    bimonthly meetings. These staff are to receive roughly the same
    training, which is to include Customer Service,
    120 hours of classroom training, primarily in refund and EIC
    issues. After Adjustment, and Collection         several months of
    on-the-job training, they are to receive an additional 120
    Branches                           hours of training on more
    complex issues, such as how to handle balance- due accounts,
    installment agreements, and return delinquencies. All Accounting
    Branch training is to be on-the-job training. New staff are to
    Accounting Branch                  have a coach who assists them
    through each of the steps involved in adjusting accounts. Staff in
    the Output Review Section are to receive 2 weeks of classroom
    Quality and Management             training on the Notice Review
    Processing System and on-line notice Support Branch
    review. They also are to receive 4-6 weeks of on-the-job training.
    Staff must have 2-3 years of experience dealing with adjustments,
    Taxpayer Advocate's Office customer service, or collection before
    being selected for the staff. Once selected, staff are to receive
    classroom training for PRP caseworkers, including PRP quality
    standards. The branches at the Fresno Service Center had two types
    of supervisory Supervisory Review                 review of
    abatement decisions made by staff. One is to occur before the
    decision is made and one after the decision. Regardless of the
    type of review, FSC officials did not collect data on the number
    of reviews done Page 31                     GAO/GGD-99-98 IRS'
    Abatement Process in Selected Locations Appendix II Abatement
    Processes at the Fresno Service Center by supervisors or the
    percentage of abatement decisions that were reviewed. According to
    FSC officials, supervisory review and approval of abatement
    decisions before they are finalized is required for a few types of
    abatements. For example, abatement decisions involving
    comparatively larger dollar amounts or certain types of penalty or
    interest abatements generally require supervisory review and
    approval.5 Also, FSC officials said that supervisors in each
    branch are to review a random sample of closed cases for each
    employee each month. These reviews are generally to be conducted
    to evaluate employee performance. Each branch gave supervisors the
    discretion to determine the percentage of abatement decisions to
    review. For example, the supervisors we talked to in at least one
    branch said they were likely to consider the past experience and
    performance of the staff member as well as the complexity and size
    of their caseload. Fresno Service Center has a quality review
    program that is designed to Quality Review    ensure that
    abatement decisions are reviewed for quality by analysts outside
    the function making the abatement decision.  These analysts at the
    service center are to review a sample of cases closed in each of
    the branches. The purpose is to measure adherence to specific
    quality standards. For example, each branch is subject to quality
    reviews for a random sample of closed cases by the Program
    Analysis Section. Also, the Output Review Section in the Quality
    and Management Support Branch is to review a random sample of
    notices in each branch monthly. Finally, a random sample of cases
    closed by the Taxpayer Advocate's Office is to be reviewed at the
    Brookhaven (NY) Service Center.6 5We are not disclosing the
    requirements or criteria for making these abatement decisions
    because of their sensitivity. 6We did not analyze the samples to
    verify whether they were, in fact, randomly drawn. Page 32
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix III Abatement Processes at the Kansas-Missouri District
    Office The Kansas-Missouri District Office (KMDO) is located in
    St. Louis and has satellite offices across its two-state area. The
    district is responsible for auditing a variety of individual and
    business tax returns and for responding to taxpayer inquiries. It
    is also responsible for compliance programs that use third-party
    information to identify taxpayers who do not file tax returns or
    who understate their tax liability on filed returns. Different
    work groups within the district make abatements.1 Of the five
    Kansas-Missouri                             divisions in KMDO,
    four make abatement decisions, usually through one or Groups That
    Make                            more branches. The division not
    making abatements is Criminal Investigation, whose primary
    workload involves investigating fraudulent or Abatements
    illegal activities. Each division or office responsible for making
    abatements is shown in table III.1, which also lists examples of
    the type of abatements. Table III.1: Examples of Abatements at
    Division or office                               Type of abatement
    Kansas-Missouri District Office             Collection Division
    Discharged bankruptcies, offers-in-compromise,a trust fund
    recovery penaltiesb Customer Service Division Federal tax
    deposits,c taxpayer inquiries about assessments Examination
    Division                             Audit reconsiderations,d
    claims Office of Taxpayer                               Collection
    hardships and Problem Resolution Program Advocate
    (PRP)e aBy agreeing to an offer-in-compromise with a taxpayer, IRS
    accepts a lower dollar amount to settle a balance due. bIRS makes
    concurrent assessments against more than one officer or
    shareholder of a business that has not paid withheld employment
    taxes. Once the taxes are paid, the other assessments are abated.
    cIRS is to abate penalties erroneously assessed for failing to
    properly deposit federal taxes. dAudit reconsiderations occur when
    taxpayers ask IRS to reconsider assessments made in past audits.
    eStaff from the divisions resolve many PRP cases. Source:
    Information provided by IRS officials. Several factors affect
    which group makes the abatement decision, including the following.
*  Type of case. Cases can vary by type of taxes (such as gift or
    excise), type of taxpayers (such as large corporation), and type
    of transactions (such as bankruptcy). 1An abatement occurs when
    IRS reduces the assessment of tax, penalty, or interest against
    taxpayers for various reasons (e.g., an incorrect assessment or
    taxpayer had a reasonable cause for not complying with filing or
    payment requirements). An abatement may be initiated by a request
    from a taxpayer, by a taxpayer in response to IRS actions, or
    solely by IRS. For example, a taxpayer may file an amended return
    to claim changes to the original return. Factors such as the type,
    complexity, and source of the abatement determine which IRS group
    makes the abatement. Page 33
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix III Abatement Processes at the Kansas-Missouri District
    Office *  Division function. The normal workload of the work group
    affects which group makes a specific abatement decision.  For
    example, the Collection Division would make abatements in working
    cases, such as bankruptcy cases. Customer Service Division
    abatements could come from responding to taxpayer inquiries, such
    as those involving federal tax deposits. *  Status of taxpayer
    account. For example, if a taxpayer is being audited by the
    district office and files an amended return or claim for refund
    with the service center, this return or claim is forwarded to the
    appropriate Examination group conducting the audit. Summarized
    below are the responsibilities of each division and office, its
    workload, and examples of abatements. The Collection Division is
    responsible for the collection of taxes from Collection Division
    businesses and individuals who have an outstanding balance due or
    who have not filed required tax returns. In fiscal year 1998, the
    Collection Division closed about 14,300 cases, but Division
    officials could not identify how many cases involved abatements
    because they were not separately tracked. Abatements in the
    division involve issues such as offers-in-compromise, trust fund
    recovery cases, and bankruptcy.2  According to Collection
    officials, the most common abatements come from discharged
    bankruptcies, in which IRS makes abatements at the direction of a
    court. Offer-in-compromise cases involve an agreement by IRS to
    accept a taxpayer's offer to settle an outstanding assessment for
    less than the total due. In trust fund recovery cases, IRS has
    made assessments against officers or shareholders of a business
    that has not properly deposited its employment taxes and then is
    to abate the residual assessments after the tax liability has been
    paid. The Customer Service Division takes taxpayers' calls and
    correspondence Customer Service Division      regarding inquiries
    about issues such as assessments. Taxpayer correspondence is
    forwarded to the IRS district office nearest the taxpayer for
    handling. During February 1998 through January 1999, the division
    closed nearly 17,000 cases. Customer Service officials said they
    did not track how many cases involved abatements. According to
    division officials, the most common type of abatement results from
    penalty assessments in failure-to-deposit cases. For IRS to abate
    this 2For these types of cases, IRS abates the aggregated balance
    due; it does not break out the specific types of tax, penalty, or
    interest assessments. Page 34
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix III Abatement Processes at the Kansas-Missouri District
    Office penalty, the taxpayer must demonstrate a reasonable cause
    for not making the required tax deposits by the due date. If IRS
    agrees that the reason is valid, the penalty is to be abated. The
    Examination Division is responsible for auditing individual and
    Examination Division              business tax returns selected by
    scoring criteria that identify returns with the greatest potential
    tax noncompliance. During fiscal year 1998, the Examination
    Division closed almost 19,000 cases. An Examination official said
    that the division has not tracked the number of cases that
    involved abatements, but that the division abates few assessments.
    This is because audits tend to focus on returns with potentially
    higher noncompliance, which is more likely to lead to additional
    taxes being assessed rather than assessed taxes being abated.
    According to Examination officials, abatements come largely from
    claims involving audit reconsiderations that the service center
    sends to the district for review before being accepted. The
    Special Programs Section in Examination works the claim and can
    decide to accept or audit the claim. Audit reconsideration cases
    result when taxpayers ask IRS to revisit a prior audit that
    assessed additional taxes. The taxpayer believes that the taxes
    should not have been assessed. If the taxpayer provides support
    for that belief and IRS agrees, any excess tax amount is to be
    abated. The Taxpayer Advocate's Office is to assist taxpayers
    through the Problem Taxpayer Advocate's Office Resolution Program
    (PRP) and other activities after other IRS contacts have not
    resolved the taxpayer's concerns or when taxpayers ask for help.
    During a recent 6-month period, an Advocate official said that the
    office worked about 230 cases but did not know the number
    involving abatements because they were not separately tracked.
    According to the Advocate official, the office routinely sends
    cases to a group in the Customer Service Division staffed with
    employees from other divisions. There, the case is to be worked by
    a division employee and monitored by the Advocate's Office to see
    that it is closed properly and timely. District officials said
    that most abatement decisions are made by Staffing
    authorized staff in the Collection and Customer Service Divisions.
    Also, a few abatements are made by staff in the Examination
    Division and Taxpayer Advocate's Office. Table III.2 summarizes
    the type and number of staff that make abatement decisions in the
    district, according to IRS officials. Page 35
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix III Abatement Processes at the Kansas-Missouri District
    Office Table III.2: Staffing Levels at Kansas-Missouri by Type of
    Staff and Grade Level, April 1999 Staff type and grade
    Collection Customer Servicea Examinationb Taxpayer Advocate Total
    Revenue officer (GS-7 to GS-12)
    149 c                00                                  0 149 Tax
    examiner assistant (GS-5 to GS-9)
    17                 0               24                  0        41
    Customer/taxpayer service representative (GS-5 to GS-8)
    8                480                0                  0       488
    Customer/taxpayer service specialist (GS-6 to GS-11)
    1                 33                0                  0        34
    Revenue agent (GS-9 to GS-13)
    0                  0              394                  0       394
    Tax auditor (GS-9)
    0                  0               42                  0        42
    PRP analyst (GS-9 to GS-12)
    0                  0                0                   9 d     9
    Total
    175                 513              460                  9 1,157
    aExcludes 8 tax law specialists who advise staff that make
    abatements. bExcludes 5 lawyers who advise staff that make
    abatements. cIncludes revenue officer aides who do research for
    revenue officers. dExcludes a taxpayer advocate and 2 management
    assistants. Source: IRS officials. These staff have various
    duties, as discussed below. Revenue officers work various types of
    delinquent accounts and Collection Division
    investigations in the office and field. Also, they may work on
    specific programs, such as trust fund recovery penalties and lien
    withdrawals. Attorneys and district counsel assist with complex
    issues, such as bankruptcy. Revenue officer aides assist revenue
    officers by performing courthouse research and other duties.
    Customer service representatives provide service to taxpayers who
    have Customer Service Division                   contacted IRS via
    correspondence, telephone, or visits. They help prepare returns
    and answer questions regarding tax law, IRS procedures, and
    individual accounts. Revenue agents and tax auditors audit various
    types of tax returns, such as Examination Division
    income tax returns. Staff monitor cases sent to the divisions to
    ensure that they are resolved Taxpayer Advocate's Office promptly
    and appropriately. In general, training to be given in the
    divisions and offices that made Abatement Training
    abatements did not focus on abatements; rather, it focused on the
    range of duties for the various types of staff. The following
    briefly describes the training to be provided. Revenue officers
    are to receive three phases of classroom training and on-
    Collection Division                         the-job training after
    each phase. Afterward, they are to be assigned a Page 36
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix III Abatement Processes at the Kansas-Missouri District
    Office mentor to provide additional on-the-job training. Revenue
    officer aides receive no formal classroom training. All their
    training is on-the-job. Employees dealing with bankruptcy cases
    are to receive training on bankruptcy issues, including 1 year of
    on-the-job training. IRS officials said employees handling the
    other types of abatements, such as offer-in- compromise and trust
    fund recovery cases, usually come from other IRS functions at
    which they have already received training to handle these issues.
    Customer service representatives are to receive three phases of
    tax law Customer Service Division          classroom training and
    four additional phases of accounts-related classroom training.
    These courses include installment agreements; credit transfers;
    refund releases; tax adjustments; and penalty abatements. All
    classroom training is to be supplemented with on-the-job training.
    Staff making abatements in the division are to receive many hours
    of Examination Division               classroom and on-the-job
    training, which varies by the type of staff. This training mostly
    addresses tax law and auditing topics, such as claims and audit
    reconsiderations. Revenue agents in specialty fields are to
    receive special training (e.g., a 3-week excise tax course). PRP
    analysts are to receive some specialized training. However, an
    Taxpayer Advocate's Office Advocate official explained that its
    office has recruited staff from other IRS divisions that should
    already have been trained in collection and audit issues that the
    office addresses. At the district, except for one division, the
    staff making the abatement Supervisory Review
    decision is usually the same staff that enters information about
    the decision into the taxpayer accounts on the computer. The
    exception is the Examination Division, where the staff making the
    decision do not have access for computer entry. Two types of
    supervisory review can affect abatement decisions made by staff.
    One occurs before the decision is made and one occurs after the
    decision. Neither of these types of review focus on abatements;
    rather, they cover all types of adjustments. As a result, KMDO did
    not have data on the percentage of abatement decisions that were
    reviewed. First, supervisors may review proposed decisions to
    approve them before they are finalized. KMDO did not have similar
    requirements for these reviews across the divisions. However,
    Collection officials told us that their supervisors are to review
    all cases. Examination officials said they Page 37
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix III Abatement Processes at the Kansas-Missouri District
    Office have no requirement except that supervisors are responsible
    for the quality of the cases closed in their groups. Second, KMDO
    officials said that supervisors are supposed to review a random
    sample of closed cases for each employee each month. These reviews
    are generally conducted for performance evaluation, and the
    requirements differ across the divisions. For example, Customer
    Service officials told us that their supervisors are to review at
    least 25 percent of the cases closed by each employee. Each
    division is subject to reviews by a quality measurement system.
    Quality Review    Under this system, district office reviewers are
    to check the quality of work in closed cases against specific
    quality standards. These standards differ for each division. The
    closed cases selected for review are to be randomly drawn from all
    types of cases closed in a division.3 KMDO did not have data on
    how many quality reviews addressed abatement decisions because
    abatement cases were not reviewed separately. In the Collection
    Division, for example, a sample of nine closed cases per branch is
    to be pulled for a nationally centralized review under the
    Collection Quality Measurement System. Similarly, in the Customer
    Service Division, Quality Assurance reviewers are required to do a
    closed case review on paper transactions. The sampling plan for
    each review period is developed in the National Office. At the
    time of our work, for example, the Quality Assurance Office was
    slated to review every 107th closed case. Examination also has
    closed cases reviewed under a national quality measurement system.
    The Taxpayer Advocate Office's review only covers those relatively
    few cases that are not referred to and closed at another division.
    3Our objectives did not include testing whether IRS used random
    sampling as described. Page 38
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix IV Abatement Processes at the Northern California
    District Office The Northern California District Office is located
    in Oakland and is responsible for Northern California from the
    Oregon border to just south of San Francisco. The district office
    has six operating divisions: Collection, Customer Northern
    California                      Service, Criminal Investigation,
    Research and Analysis, Examination, and Groups That Make
    Quality Assurance. Staff in three of the divisions can make
    abatements through one or more branches.1 The Taxpayer Advocate's
    Office can also Abatements                               make
    abatements, but Advocate officials said their office makes few
    abatements because most of their cases are referred to the other
    divisions or the service center for the actual decision. Table
    IV.1 shows the divisions or offices that make abatements as well
    as examples of the type of abatements made by each. Table IV.1:
    Examples of Abatements at    Division or office
    Type of abatement Northern California District Office
    Collection Division
    Penalties for reasonable cause for not paying tax debts or filing
    required tax returns, trust fund recovery penalties,a discharged
    bankruptcies Customer Service Division
    Various penalties for reasonable cause Examination Division
    Audit refunds and audit reconsideration,b category A claims and
    interest claimsc Office of Taxpayer Advocate
    Issues certain taxpayers have had difficulty getting resolved,
    penalties for reasonable cause aIRS makes concurrent assessments
    against more than one officer or shareholder of a business that
    has not paid withheld employment taxes. Once the taxes are paid,
    the other assessments are abated. bAudit reconsiderations occur
    when taxpayers ask IRS to reconsider assessments made through past
    audits. cCategory A claims involve issues that are complex,
    sensitive, or prone to noncompliance. Source: Information provided
    by IRS officials. In the following, we briefly describe the types
    of abatements made at each division or office. We also identify
    the caseload for all types of adjustments, including abatements,
    to taxpayers' accounts. None of the divisions had data on the
    portion of the caseload that involved abatements. The Collection
    Division is responsible for processing cases involving tax
    Collection Division                      delinquency accounts and
    tax delinquency investigations. In the former, a tax liability has
    been assessed but not paid; in the latter, IRS is trying to 1An
    abatement occurs when IRS reduces the assessment of tax, penalty,
    or interest against taxpayers for various reasons (e.g., an
    incorrect assessment or taxpayer had a reasonable cause for not
    complying with filing or payment requirements). An abatement may
    be initiated by a request from a taxpayer, by a taxpayer in
    response to IRS actions, or solely by IRS. For example, a taxpayer
    may file an amended return to claim changes to the original
    return. Factors such as the type, complexity, and source of the
    abatement determine which IRS group makes the abatement Page 39
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix IV Abatement Processes at the Northern California
    District Office obtain an unfiled tax return to determine whether
    a tax liability exists. The division may abate penalties for these
    cases. The division receives these cases from the service center
    and has field branches whose staff can make abatement decisions.
    During fiscal year 1998, the division processed about 13,600
    cases, but it did not track how many of them were abatements.
    According to district officials, in a typical Collection Division
    case, a revenue officer contacts a taxpayer who has not fully paid
    a tax liability. The taxpayer requests that the failure-to-pay
    penalty be abated and provides evidence of reasonable cause. The
    officer is to review the information provided by the taxpayer and
    make a decision on whether to abate the failure-to-pay penalty.
    The criteria for Collection abatements are contained in the
    Internal Revenue Manual, chapter 21.2 Evidence required to make
    the abatement includes statements or documents from the taxpayer
    supporting the reasonable cause claim. Information about the
    abatement decision is to be maintained in case files at the
    service center. Abatements in the Customer Service Division result
    from requests by Customer Service Division    taxpayers to abate
    certain types of penalties for reasonable cause. Customer service
    representatives are to collect evidence from the taxpayer on the
    reasonable cause and make the abatement decision. Documentation on
    these decisions is to be maintained in the case file at the
    service center. Officials from Customer Service could not provide
    caseload data on these or other types of case decisions for fiscal
    year 1998. According to district officials, these penalty
    abatement cases typically involve penalties for failure to file a
    required tax return on time or failure to pay assessments on time.
    The criteria for Customer Service abatements are also contained in
    the Internal Revenue Manual, chapter 21. The Customer Service
    Division refers some abatement cases to other IRS functions for
    processing. Taxpayer contacts concerning claims or requesting
    audit reconsideration can be referred to the district's
    Examination Division or to the service center. Requests for
    abatement of very large dollar penalties and of assessments to be
    paid under installment agreements can be referred to the
    Collection Division for processing. Abatements in the Examination
    Division originate as claim referrals from Examination Division
    the service centers, reconsideration of assessments from prior
    audits, requests for interest reduction, and tax reductions
    identified during audits. 2Because these criteria are considered
    to be sensitive information, we are not disclosing them in any
    detail throughout this appendix. Page 40
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix IV Abatement Processes at the Northern California
    District Office Examination staff also are to process abatements
    referred to them from the district's taxpayer advocate. The
    Examination Division might refer cases to other divisions or IRS
    offices either because the taxpayer moved or because the taxpayer
    has a representative who lives elsewhere. During fiscal year 1998,
    the division closed about 44,200 cases, but the percentage that
    involved abatements was not tracked. According to district
    officials, a typical Examination abatement case is one in which
    the taxpayer requests that the findings of a prior audit be
    reconsidered. Examination staff are to review the issues and make
    a decision on whether to abate the amount being questioned.
    Abatements are also considered to be common for category A claims,
    which are usually referred from the service center and consist of
    claims and amended returns that are sensitive, prone to
    noncompliance, or more complex than other claims. The criteria for
    Examination abatements are contained in the Internal Revenue
    Manual, chapter 21. Evidence required for Examination abatements
    typically includes information from audit files, tax returns, or
    other documentation provided by the taxpayer that is to be
    maintained in the case file. The Taxpayer Advocate's Office is
    responsible for helping taxpayers Taxpayer Advocate's Office
    resolve tax-related problems. The office should receive cases that
    meet certain criteria, such as repetitive IRS contacts over a
    short time period or taxpayer problems that have not been resolved
    through regular channels for a long period of time. Advocate
    officials told us that they refer most cases to divisions, service
    centers, and other districts. For example, cases might be referred
    to the Examination and Collection Divisions, which have
    caseworkers to handle these cases. Primarily for geographic
    reasons, some cases are referred to other districts-that is, to
    move the case closer to where the taxpayer is located and the
    actions are being taken. Generally, the workload does not vary
    much throughout the year and consists primarily of processing
    taxpayer requests for reduction or elimination of penalties. This
    workload totaled about 4,000 cases in fiscal year 1998, but the
    percentage that involved abatements was not tracked. Advocate
    officials said their office makes the final decision on a small
    number of abatements. Page 41                      GAO/GGD-99-98
    IRS' Abatement Process in Selected Locations Appendix IV Abatement
    Processes at the Northern California District Office According to
    Advocate officials, a typical case would involve abating a
    failure-to-file penalty when a taxpayer had reasonable cause for
    not filing by the required due date. A taxpayer may initiate this
    action by providing information on why the penalty should be
    abated (e.g., taxpayer was hospitalized). The criteria for
    abatements are in the Internal Revenue Manual, chapter 21.
    Evidence required to make the abatement includes statements from
    the taxpayer on the reasonable cause claim. This evidence is to be
    kept in the case file. According to IRS officials, district office
    staffing does not vary much Staffing
    seasonally because the workload remains fairly constant. Table
    IV.2 summarizes the type and level of staff that make abatement
    decisions in the district, according to IRS officials. Table IV.2:
    Staffing Levels by Type of Staff and Grade Level, May 1999 Staff
    type and gradea                                  Collection
    Customer Service           Examination         Taxpayer Advocate
    Total Revenue officer (GS-7 to GS-12)
    227                           0                    0
    0    227 Tax examiner assistant (GS-5 to GS-9)
    20                          8                    0
    2     30 Customer service representative (G-5 to GS-9)
    0                       213                     0
    0    213 Revenue agent (GS-9 to GS-13)
    0                          0                 411
    0    411 Tax auditor (GS-9 to GS-12)
    0                          0                 108
    0    108 PRP specialist (GS-11)
    00 0 5 5 Total
    247                        221                  519
    7    994 aStaff at the highest grade levels usually fill
    supervisory positions. Source: IRS officials. In general, training
    to be given in the divisions and offices that made Abatement
    Training                          abatements did not focus on
    abatements. Rather, the training focused on the range of duties
    for the various types of staff. The following briefly describes
    the training to be provided. Training targeted at abatements is
    limited. According to district officials, Collection Division
    the only training directed at abatements was a class on processing
    Form 3870, Request for Adjustment. Otherwise, the staff making
    abatement decisions are to receive training in three phases,
    consisting of over 300 classroom hours. This training is to cover
    the collection process, including abatements, adjustments, forms,
    and reasonable cause for abatements. Other training is to be
    provided on-the-job. Staff making abatements in the division are
    to receive the basic training Customer Service Division
    module, which includes case processing, telephone routing,
    customer service core skills, disclosure policies, and telephone
    training. Other training modules provide more specialized and
    advanced courses, such as computing and adjusting penalties and
    determining penalty relief. Page 42
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix IV Abatement Processes at the Northern California
    District Office Staff making abatements are to receive classroom
    and on-the-job training. Examination Division              This
    training mostly addresses the tax law and auditing. None of the
    training focused on abatements. As of April 1999, the staff had
    not yet been trained on the new process for audit reconsideration
    in which the requests for reconsideration are to be submitted
    directly to the service center and subsequently referred to
    Examination for action. Staff working the cases are to receive
    classroom training. Initially, they are Taxpayer Advocate's Office
    to receive 16 hours of PRP caseworker training and on-the-job
    training for making adjustments on the computer system. The PRP
    caseworker- training course was being updated, and additional
    classroom training for PRP specialists and analysts is to be
    added. Staff that make abatement decisions usually are not the
    same staff that Supervisory Review                enter
    information about decisions into taxpayers' computerized accounts.
    According to district officials, this improves internal control.
    Exceptions are the Taxpayer Advocate's Office and Customer Service
    Division, where the same individual makes the decision and enters
    the information. Two types of supervisory review can affect
    abatement decisions made by staff. One occurs before the decision
    is made and one occurs after the decision. Regardless of the type
    of review, district officials did not collect data on either the
    number of reviews done by supervisors or the percentage of
    abatement decisions that were reviewed. First, supervisors may
    review decisions before they are made for purposes of approval.
    The requirements for such a review differed according to various
    division officials. For example, supervisors in the Taxpayer
    Advocate's Office and Collection Division are to review all
    requests for abatement and those in Customer Service are to review
    large-dollar abatements. The other divisions did not require
    supervisors to review and approve abatement decisions before they
    became final. Second, district officials said that supervisors are
    to review a random sample of closed cases for each employee each
    month. These reviews are generally conducted for performance
    evaluation, and the requirements differ across the district.
    Following is a summary of supervisory review requirements for each
    division and office. According to district officials, supervisors'
    reviews are to be conducted Collection Division
    using the Collection Management Information System. Supervisors
    are to look for appropriate documentation and data. IRS does not
    maintain data on the number or percent of cases reviewed. Page 43
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix IV Abatement Processes at the Northern California
    District Office District officials said that supervisors are to
    review five closed cases each Customer Service Division
    month for each employee to evaluate performance for the critical
    elements in the job description. Supervisors also are to make
    additional random reviews to ensure quality. According to district
    officials, supervisors are to review a sample of closed
    Examination Division              cases for employee evaluations.
    The division has no specific criteria for the number of cases to
    be reviewed. Supervisors may choose to review a higher or lower
    number of closed cases depending on the auditor's skill level and
    experience and the supervisor's workload. District officials told
    us that supervisors are to review all staff decisions. Taxpayer
    Advocate's Office Reviews are to be used for both quality control
    and staff evaluations. Reviewers at the district office review
    closed cases in the divisions to Quality Review
    check the quality of the work against specific quality standards.
    These standards differed for each division, but in general, the
    standards focused on communication, timeliness, and accuracy.
    District officials said that the cases selected for review are to
    be randomly drawn from all types of cases closed in a division.3
    Because abatement cases are not reviewed separately, district
    officials did not have data on how many quality reviews addressed
    abatement decisions. Specifically, district officials provided the
    following information about the review of closed cases in each
    division or office by independent reviewers. *  The Quality
    Assurance Division reviews a monthly sample of closed cases from
    the Taxpayer Advocate's Office. According to district officials,
    Quality Assurance reviews 16 cases plus 100 percent of the cases
    initiated from IRS' periodic problem solving days. *  The
    Collection Division reviewed between 5 and 10 percent of the
    closed cases-about 1,300 reviewed cases in fiscal year 1998-as
    part of the Collection Quality Measurement System. *  The Customer
    Service Division's Automated Compliance Section reviewed 439 cases
    during fiscal year 1998. *  Examination Division cases underwent
    Quality Assurance review against the Examination Quality
    Standards. In fiscal year 1998, 506 closed audit cases were
    reviewed as part of this Examination Quality Measurement System.
    3Our objectives did not include testing whether IRS used random
    sampling as described. Page 44
    GAO/GGD-99-98 IRS' Abatement Process in Selected Locations
    Appendix V GAO Contacts and Staff Acknowledgments Tom Short (202)
    512-9110 GAO Contacts       Royce Baker (913) 384-3222
    Acknowledgments    In addition to those named above, Lawrence
    Dandridge, Rodney Hobbs, Stephen Pruitt, Louis Roberts, Elizabeth
    Scullin, and Kathleen Seymour made key contributions to this
    report. Page 45                 GAO/GGD-99-98 IRS' Abatement
    Process in Selected Locations Page 46    GAO/GGD-99-98 IRS'
    Abatement Process in Selected Locations Page 47    GAO/GGD-99-98
    IRS' Abatement Process in Selected Locations Page 48    GAO/GGD-
    99-98 IRS' Abatement Process in Selected Locations Ordering
    Information The first copy of each GAO report and testimony is
    free. Additional copies are $2 each. Orders should be sent to the
    following address, accompanied by a check or money order made out
    to the Superintendent of Documents, when necessary. VISA and
    MasterCard credit cards are accepted, also. Orders for 100 or more
    copies to be mailed to a single address are discounted 25 percent.
    Order by mail: U.S. General Accounting Office P.O. Box 37050
    Washington, DC 20013 or visit: Room 1100 700 4th St. NW (corner of
    4th and G Sts. NW) U.S. General Accounting Office Washington, DC
    Orders may also be placed by calling (202) 512-6000 or by using
    fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO
    issues a list of newly available reports and testimony. To receive
    facsimile copies of the daily list or any list from the past 30
    days, please call (202) 512-6000 using a touch-tone phone. A
    recorded menu will provide information on how to obtain these
    lists. For information on how to access GAO reports on the
    INTERNET, send e-mail message with "info" in the body to:
    [email protected] or visit GAO's World Wide Web Home Page at:
    http://www.gao.gov United States General Accounting Office
    Bulk Rate Washington, D.C. 20548-0001     Postage & Fees Paid GAO
    Permit No. G100 Official Business Penalty for Private Use $300
    Address Correction Requested (268873)

*** End of document. ***