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IRS Employee Standards Considered Damaging to Taxpayers

September 9th

As a means of maintaining a high standard of performance and work ethic among its employees, the Internal Revenue Service conducts a rigorous set of performance measures. However, recent studies conducted by the National Taxpayer Advocate have found these measures to be damaging to the welfare of American taxpayers.

By placing undue emphasis on cycle time, IRS standards encourage employees to take action quickly, often to the detriment of good, thorough work. Often IRS incentives to produce work quickly can result in inaccurate results or delays to the final resolution of issues, leaving taxpayers with inaccurate audits or erroneous IRS penalty impositions.

Conversely, while the IRS monitors carefully the return on its enforcement activities, it does not keep track of any taxpayer service activities. Under Congressional budget regulations, funding is given to IRS activities which show a return on investment of greater than 1:1.

Since the IRS monitors returns on enforcement but not services, funding is disproportionately distributed to IRS enforcement activities.

Direct Impact on Taxpayers

Such evaluation policies can have an immensely harmful impact on taxpayers who must interact with IRS enforcement agents during disputes over unpaid taxes or audits. It is particularly common for these problems to manifest in the form of unrealistic deadlines.

Such short deadlines consistently result in erroneous or prematurely assigned deficiencies, as in many cases the lack of compliance was simply due to too little time in which to collect appropriate documentation. They also become problematic in negotiations concerning installment agreements or offers in compromise, when short deadlines result in excessive collection actions against taxpayer assets such as tax liens.

These issues mean that taxpayers are more often forced to file appeals on issues that might very well have been resolved initially, had the original deadlines been more realistic. These appeals waste time and money, not just for taxpayers, but for the IRS that could be distributing its resources more wisely.

 
 
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