oversight

Tax Administration: IRS' Abatement Process in Selected Locations

Published by the Government Accountability Office on 1999-07-02.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                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
GAO                United States
                   General Accounting Office
                   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
                                                                      1
                   penalty and interest assessments by July 22, 1999. 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
                                                                                            2
                   returns or answer taxpayer inquiries, that makes the abatement decision.
                   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.
                   1
                   As 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).
                   2
                       For this report, “work group” is a generic term for branches and other offices.




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             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
                                                           3
             taxes owed when they file their tax returns. IRS may assess additional
             taxes owed, as well as penalty and interest amounts, through an
                                    4
             enforcement program. Taxpayers also may file an amended return or

             3
                 IRS records the assessment as the amount of tax reported on these filed returns.
             4
              Before 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.




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  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
                              5
  either IRS or the taxpayer. 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
  5
      IRS does not track the amounts abated because of IRS errors or taxpayer errors.




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              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
                                                                     6
              process was appropriate and adequately controlled; 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

              6
              We 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.




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                 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




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                          IRS supervisors. Determining the costs and benefits of collecting such data
                          on the abatement process was beyond the scope of this report.

Taxpayers and IRS Staff   The two service centers and two district offices we visited did not track
                          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
                                                                      7
                          generated by an IRS enforcement program. 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
                                                   8
                          ask IRS for an abatement. 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.



                          7
                           Section 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.
                          8
                           Before 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.




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Various IRS Work Groups                 Various IRS work groups at the two service centers and two district offices
                                        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
                                                         9
                                        by IRS officials.

Table 1: Examples of Abatements Made
in the Kansas City and Fresno Service                                                Examples of abatements at two service centers
Centers, as of April 1999               Work group                                 Kansas City             Fresno
                                        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
                                        a
                                         Returns filed by IRS on the basis of information returns that reported income paid to a taxpayer who
                                        did not file a tax return.
                                        b
                                            Category A claims involve issues that are complex or sensitive, or prone to noncompliance.
                                        c
                                        Audit reconsiderations occur when taxpayers ask IRS to reconsider assessments made in prior
                                        audits.
                                        d
                                            In Kansas City, this work is done through the Examination Branch.
                                        e
                                            Kansas City’s underreporter cases are handled at the Austin or Ogden Service Centers.
                                        f
                                        Erroneous substitute for returns involve those sent to taxpayers who had filed their returns before
                                        receiving the SFR filed by IRS.
                                        g
                                            In Fresno, this work is done as part of the Collection Branch.
                                        h
                                         Although 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.



                                        9
                                         Each 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.




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                                           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
in the Kansas-Missouri and Northern                                          Examples of abatements at two district offices
California District Offices, as of April   Division                 Kansas-Missouri                 Northern California
1999                                       Collection               Various uncollectibles, such as Various uncollectibles, such as
                                                                    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
                                           a
                                            Audit 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
                                                        10
                                           abatements. 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

                                           10
                                              The 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.




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                          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.

Both Lower and Higher     Various types and grades of IRS staff, ranging from clerks to mid-level
                          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-
                                                                                  11
                          9 in one service center and GS-4 to GS-12 in the other. 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-
                             12
                          13. 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
                                                                                               13
                          visited did not differ very much in who made abatement decisions.

Various Tools Can Guide   According to information provided by officials at both service centers and
                          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.



                          11
                             The 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.
                          12
                           Excluding locality or other special pay adjustments, the 1999 pay for GS-5 to GS-13 ranges from about
                          $21,000 to about $70,000.
                          13
                           Even 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.




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• 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
                                                        14
  proposed decisions by staff to abate assessments. 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.

  14
     According 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.




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IRS Review Programs Do     The two service centers and two district offices each have a separate staff
                           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.



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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



Letter                                                                                                 1


Appendix I                                                                                            16
                         Kansas City Groups That Make Abatements                                      16
Abatement Processes      Staffing                                                                     20
at the Kansas City       Abatement Training                                                           21
                         Supervisory and Quality Reviews                                              22
Service Center
Appendix II                                                                                           25
                         Fresno Groups That Make Abatements                                           25
Abatement Processes      Staffing                                                                     30
at the Fresno Service    Abatement Training                                                           30
                         Supervisory Review                                                           31
Center                   Quality Review                                                               32


Appendix III                                                                                          33
                         Kansas-Missouri Groups That Make Abatements                                  33
Abatement Processes      Staffing                                                                     35
at the Kansas-Missouri   Abatement Training                                                           36
                         Supervisory Review                                                           37
District Office          Quality Review                                                               38


Appendix IV                                                                                           39
                         Northern California Groups That Make Abatements                              39
Abatement Processes      Staffing                                                                     42
at the Northern          Abatement Training                                                           42
                         Supervisory Review                                                           43
California District      Quality Review                                                               44
Office
Appendix V                                                                                            45

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             1
                       Center. 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.




                       1
                        An 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
                                                                                               a
Compliance                   Collection Branch                     Substitute for return (SFR)
                                                                                                       b
                             Examination Branch                    Claims, including category A claims, SFR, and audit
                                                                                     c
                                                                   reconsiderations
                                                                                           d
Customer Service             Automated Collection Systems Branch Erroneous SFR cases, 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)
                                          a
                                           IRS 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.
                                          b
                                              Category A claims involve issues that are complex, sensitive, or prone to noncompliance.
                                          c
                                          Audit reconsiderations occur when taxpayers ask IRS to reconsider assessments made in past
                                          audits.
                                          d
                                           Erroneous 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.

Compliance Division                       According to IRS officials, the Compliance Division has two branches that
                                          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
                                                         2
                               select the case for audit. 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.

Customer Service Division      The Customer Service Division has the following branches that can make
                               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


                               2
                               In 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




Taxpayer Advocate’s Office   The Taxpayer Advocate’s Office was created to help taxpayers who have
                             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
                                                     a             b                         c
                Examination                       49            13                       96                  0      12   170
Customer        Automated Collection
Service         Systems                          174              0                         0                0       0   174
                                                                                                              d
                Adjustments                         0             0                         0             264        0   264
                                                                                                              e
                Customer Service                    0             0                         0             108        0   108
                Taxpayer Relations                58              0                         0                0       0    58
                                                     f             g
Processing      Document Perfection               64           266                          0                0       0   330
      h
Total                                            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.
                                          a
                                              Nonpeak staff of 45
                                          b
                                              Nonpeak staff of 11.
                                          c
                                              Nonpeak staff of 70.
                                          d
                                              Nonpeak staff of 108.
                                          e
                                              Nonpeak staff of 99.
                                          f
                                          Nonpeak staff of 31.
                                          g
                                              Nonpeak staff of 0.
                                          h
                                              Does 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.

Collection Branch                         Before working on a program they have not worked before (such as SFR
                                          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.

Examination Branch                        Staff doing abatements are to receive training on the basic types of
                                          adjustments associated with the income tax laws. They also are to receive
                                          on-the-job instruction as they do audits.

Automated Collection                      New customer service representatives are to receive about 3 months of
                                          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.

Adjustments/                Training is to cover the abatement of tax and penalties in some form.
                            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.

Customer Service Branch     Before taking phone calls in which the taxpayer is asking for penalty
                            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.

Taxpayer Relations Branch   All staff working abatement cases are to receive training on
                            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.

Document Perfection         New hires are to receive a 10-day class on the Form 1040. Staff that have
                            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,
                                                                       3
the closed cases for review were to be selected using random sampling.

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.


3
 The 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
                                                                         1
                     who file returns but understate their tax liability.
                                                                                                                               2
                     Different IRS work groups make abatements at the Fresno Service Center.
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.




                     1
                      In 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.
                     2
                      An 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
                                                                                                    a
Compliance                 Examination Branch                                 Audit reconsideration and audits
                           Criminal Investigation Branch                      Overstated income from false W-2s (Statement of Earnings)
                                                                                                  b                                          c
                           Joint Compliance Branch                            Category A claims and interest claims, substitute for return,
                                                                              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)
                                          a
                                          Audit reconsideration occurs when taxpayers ask IRS to reconsider assessments made in past
                                          audits.
                                          b
                                              Category A claims involve issues that are complex, sensitive, or prone to noncompliance.
                                          c
                                           IRS 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.

Compliance Division                       The Compliance Division has four branches that can make abatements, as
                                          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
                                                                           3
                                for wage earners with income under $10,000, and trust fund recovery




                                3
                                 By 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




                                    4
                            cases. 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.

Customer Service Division   The Customer Service Division has the following branches that can make
                            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

                            4
                             Trust 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.

Quality Assurance and          The following branches in the Quality Assurance and Management Support
                               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.

Taxpayer Advocate’s Office     The Taxpayer Advocate’s Office reports to the Executive Office of Service
                               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
                                                                       a
Compliance              Examination                                333                  0            0               0 333
                        Criminal Investigation                       56                 0            0               0   56
                        Joint Compliance                            124               20             0               0 144
                                                                       b
                        Underreporter                              206                  0            0               0 206
Customer Service        Customer Service                              0                 0            0            354 354
                        Adjustments                                   0                 0            0            365 365
                        Collections                                 316                 0            0               0 316
                                                                                                      c
Quality Assurance and Accounting                                    176                 0         104                0 280
Management Support Quality and Management Support                  175
                                                                       d
                                                                                        0            0               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.
                                          a
                                              Nonpeak staff of 258
                                          b
                                              Nonpeak staff of 136.
                                          c
                                              Nonpeak staff of 265.
                                          d
                                              Nonpeak 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.

Examination Branch                        Tax examiners assistants are to receive 40 hours of initial classroom
                                          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.

Criminal Investigation       Newly hired staff are to receive 2 weeks of training followed by 2-4 months
                             of on-the-job training. All staff are to attend a 2-week refresher class each
Branch                       year.

Joint Compliance Branch      Joint Compliance staff are to receive classroom and on-the-job training
                             that covers various topics, such as the guidance and instructions in the
                             Internal Revenue Manual, the processes for making adjustments, and the
                             tax law.

Underreporter Branch         Branch staff are to receive annual training on phases of the underreporter
                             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.

Customer Service,            These staff are to receive roughly the same training, which is to include
                             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.

Accounting Branch            All Accounting Branch training is to be on-the-job training. New staff are to
                             have a coach who assists them through each of the steps involved in
                             adjusting accounts.

Quality and Management       Staff in the Output Review Section are to receive 2 weeks of classroom
                             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.

Taxpayer Advocate’s Office   Staff must have 2-3 years of experience dealing with adjustments,
                             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
                                                                      5
                 generally require supervisory review and approval. 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
                                                                   6
                 reviewed at the Brookhaven (NY) Service Center.




                 5
                  We are not disclosing the requirements or criteria for making these abatement decisions because of
                 their sensitivity.
                 6
                     We 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.
                                                                                                                                 1
                                           Different work groups within the district make abatements. 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
Abatements                                 Investigation, whose primary workload involves investigating fraudulent or
                                           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
Kansas-Missouri District Office            Division or office        Type of abatement
                                                                                                                     a
                                           Collection Division       Discharged bankruptcies, offers-in-compromise, trust fund
                                                                                       b
                                                                     recovery penalties
                                                                                          c
                                           Customer Service Division Federal tax deposits, taxpayer inquiries about assessments
                                                                                            d
                                           Examination Division      Audit reconsiderations, claims
                                           Office of Taxpayer        Collection hardships and Problem Resolution Program
                                                                           e
                                           Advocate                  (PRP)
                                           a
                                           By agreeing to an offer-in-compromise with a taxpayer, IRS accepts a lower dollar amount to settle a
                                           balance due.
                                           b
                                           IRS 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.
                                           c
                                               IRS is to abate penalties erroneously assessed for failing to properly deposit federal taxes.
                                           d
                                           Audit reconsiderations occur when taxpayers ask IRS to reconsider assessments made in past
                                           audits.
                                           e
                                               Staff 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).

                                           1
                                            An 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.

Collection Division           The Collection Division is responsible for the collection of taxes from
                              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,
                                                                          2
                              trust fund recovery cases, and bankruptcy. 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.

Customer Service Division     The Customer Service Division takes taxpayers’ calls and correspondence
                              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

                              2
                               For 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.

Examination Division         The Examination Division is responsible for auditing individual and
                             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.

Taxpayer Advocate’s Office   The Taxpayer Advocate’s Office is to assist taxpayers through the Problem
                             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
                                                                                       a         b
Staff type and grade                                    Collection Customer Service Examination Taxpayer Advocate Total
                                                                    c
Revenue officer (GS-7 to GS-12)                                 149                 0          0                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
                                                                                                                  d
PRP analyst (GS-9 to GS-12)                                       0                 0          0                9     9
Total                                                          175                513        460                9 1,157
                                        a
                                            Excludes 8 tax law specialists who advise staff that make abatements.
                                        b
                                            Excludes 5 lawyers who advise staff that make abatements.
                                        c
                                            Includes revenue officer aides who do research for revenue officers.
                                        d
                                            Excludes a taxpayer advocate and 2 management assistants.
                                        Source: IRS officials.


                                        These staff have various duties, as discussed below.

Collection Division                     Revenue officers work various types of delinquent accounts and
                                        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 Division               Customer service representatives provide service to taxpayers who have
                                        contacted IRS via correspondence, telephone, or visits. They help prepare
                                        returns and answer questions regarding tax law, IRS procedures, and
                                        individual accounts.

Examination Division                    Revenue agents and tax auditors audit various types of tax returns, such as
                                        income tax returns.

Taxpayer Advocate’s Office              Staff monitor cases sent to the divisions to ensure that they are resolved
                                        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.

Collection Division                     Revenue officers are to receive three phases of classroom training and on-
                                        the-job training after each phase. Afterward, they are to be assigned a




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                             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 Division    Customer service representatives are to receive three phases of tax law
                             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.

Examination Division         Staff making abatements in the division are to receive many hours of
                             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).

Taxpayer Advocate’s Office   PRP analysts are to receive some specialized training. However, an
                             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
                                                                               3
                 randomly drawn from all types of cases closed in a division. 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.




                 3
                     Our 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
                                                                        1
Abatements                              through one or more branches. The Taxpayer Advocate’s Office can also
                                        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
Northern California District Office     Division or office                             Type of abatement
                                        Collection Division                            Penalties for reasonable cause for not paying tax
                                                                                       debts or filing required tax returns, trust fund
                                                                                                            a
                                                                                       recovery penalties, discharged bankruptcies
                                        Customer Service Division                      Various penalties for reasonable cause
                                                                                                                                   b
                                        Examination Division                           Audit refunds and audit reconsideration, category
                                                                                                                     c
                                                                                       A claims and interest claims
                                        Office of Taxpayer Advocate                    Issues certain taxpayers have had difficulty getting
                                                                                       resolved, penalties for reasonable cause
                                        a
                                        IRS 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.
                                        b
                                        Audit reconsiderations occur when taxpayers ask IRS to reconsider assessments made through past
                                        audits.
                                        c
                                            Category 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.

Collection Division                     The Collection Division is responsible for processing cases involving tax
                                        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

                                        1
                                         An 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
                                                                                      2
                            contained in the Internal Revenue Manual, chapter 21. 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.

Customer Service Division   Abatements in the Customer Service Division result from requests by
                            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.

Examination Division        Abatements in the Examination Division originate as claim referrals from
                            the service centers, reconsideration of assessments from prior audits,
                            requests for interest reduction, and tax reductions identified during audits.

                            2
                            Because 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.

Taxpayer Advocate’s Office   The Taxpayer Advocate’s Office is responsible for helping taxpayers
                             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
                      a
Staff type and grade                                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)                                       0                0                          0                        5      5
Total                                                     247              221                        519                         7    994
                                         a
                                          Staff 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.

Collection Division                      Training targeted at abatements is limited. According to district officials,
                                         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.

Customer Service Division                Staff making abatements in the division are to receive the basic training
                                         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




Examination Division         Staff making abatements are to receive classroom and on-the-job training.
                             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.

Taxpayer Advocate’s Office   Staff working the cases are to receive classroom training. Initially, they are
                             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.

Collection Division          According to district officials, supervisors’ reviews are to be conducted
                             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




Customer Service Division      District officials said that supervisors are to review five closed cases each
                               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.

Examination Division           According to district officials, supervisors are to review a sample of closed
                               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.

Taxpayer Advocate’s Office     District officials told us that supervisors are to review all staff decisions.
                               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
                                                                                     3
                               drawn from all types of cases closed in a division. 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.

                               3
                                   Our 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
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