The U.S. Government Accountability Office on Tuesday released a report stating that the Internal Revenue Service is not measuring how its customer service investments affect taxpayer satisfaction.
The IRS offers assistance through its website, telephones, correspondence and in-person centers. According to the GAO, improving these services could increase tax compliance and reduce the burden on taxpayers. Measuring these benefits could help the IRS make budget decisions that result in better services.
The Inflation Reduction Act of 2022 provided the IRS with funding to improve tax administration operations, including ways to help taxpayers comply with requirements. The act also included a provision for the GAO to oversee the distribution and use of those funds.
In 2024, the IRS called for a reexamination of how taxpayer services and other actions affect revenue, the report says. The agency has since begun a research effort to inform investment decisions based on costs and revenues. However, IRS officials told the GAO they have no plans for this research to study information on additional benefits, like the burden on taxpayers or their satisfaction, though they could in the future.
The GAO stated that measuring these benefits is difficult. The challenges include securing enough skilled staff and funds to develop methodologies and data for long-term measurement.
The report noted that IRS documents in 2007 and 2008 called for more analysis of revenue and compliance benefits to support investment decisions, but the agency did not provide documented results. The GAO did identify five past IRS studies on how services affected compliance or satisfaction. A 2013 study, for example, found that a lack of satisfaction with services may contribute to noncompliance.
The GAO also found 12 studies measuring taxpayer service benefits in the national tax administrations of other countries, which all cited a positive association. Studies in Belgium and Germany found that customer-oriented approaches were associated with lower compliance costs for business taxpayers, according to the report.