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October 29, 2009
Li-Yun Chien
TIGTA-PAO@tigta.treas.gov
(202) 622-6500

TIGTA Finds Taxpayer Advocate Service Needs to Make Better Use of Resources

The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its audit report of the Taxpayer Advocate Service's (TAS) administration of the Taxpayer Advocacy Panel (the Panel). The Panel was established in 2002 to listen to taxpayer concerns, identify grass roots issues and make recommendations to improve customer service and overall tax administration.

The objective of this review was to determine whether the Panel is operating in accordance with its charter and whether the Panel and TAS are utilizing resources efficiently to promote improvements in Internal Revenue Service customer service. TIGTA found that the TAS, which provides staff that perform administrative support and technical-related duties for the Panel, needs to ensure effective use of its resources by providing a balance between the cost of administration and staff used to support the Panel, the large size of the Panel (currently composed of approximately 100 members), and the Panel's ability to help improve service to taxpayers. In addition, the National Taxpayer Advocate (NTA) should ensure that TAS spends its resources efficiently and that the Panel is at an optimal size.

TIGTA recommended that the NTA take the following actions: revise the staff time tracking system to evaluate whether resources are used efficiently; reevaluate the Panel's structure and size to ensure a balance between TAS staff and budgetary resources; and reevaluate the roles of TAS staff to ensure that the Panel functions independently. Also, TIGTA recommended that the NTA: revise the charter to reflect the roles of Panel members; validate data in the Panel database and correct erroneous entries; follow up with the IRS on the recommendations the Panel provided that are planned for future implementation; establish guidance for conducting tax compliance checks of Panel members; and verify that licensed tax practitioners serving on the Panel are in good standing with the IRS.

In response, the NTA agreed in full with seven recommendations and in part with one recommendation. The NTA did not fully agree to reevaluate the Panel's size to determine the optimal structure of the Panel's membership, indicating that there is no compelling data that the current structure is flawed, and that it would not be cost-effective to make any changes. In addition, the NTA noted that any changes to the Panel require approval by the Secretary of the Treasury and the IRS Commissioner. TIGTA disagreed with NTA's assertions, saying it is important to evaluate the program to identify any potential changes that could reduce costs and improve efficiency, especially because no new studies have been performed since the Panel was established in 2002.