December 01, 1993
IRS Consolidates Customer Service & Tax Processing
The Internal Revenue Service will consolidate customer service and returns processing
operations as part of its plan to reinvent the way it does business. The reinvention,
scheduled to be completed by the year 2001, will enable the IRS to deliver better service
to taxpayers and improve the voluntary compliance rate.
IRS will consolidate 70 existing telephone contact sites into 23 customer service
centers that will provide one-stop service for taxpayers on issues that do not require
face-to-face personal contact. Ten of the customer service centers will be located in
areas where the IRS presently operates a processing center. The others will be established
at some of the current district office locations. Customer service representatives at
these sites will have on-line access to all tax information needed to resolve the vast
majority of the issues about which taxpayers contact the IRS today.
There will be five submission processing centers where taxpayers will file their paper
tax returns. These centers will use new technologies--character recognition and imaging,
in particular--to more accurately and efficiently process tax return data.
Consolidating customer service and tax return processing will result in savings of over
$250 million over 10 years. In addition, productivity improvements will free up staffing
that IRS will be able to reinvest in front-line service and compliance improvement
activities to raise the voluntary compliance rate from 82 percent to 90 percent. Each
percent of voluntary compliance equals $7 billion in federal revenue collections.
Role of Customer Service Sites
Telephone contact will be the primary way that IRS and taxpayers will communicate with
each other for issues not requiring face-to-face contact. IRS' goal is to resolve issues
95% of the time at the first contact with taxpayers.
Taxpayers will be able to call a customer service center to get information about the
tax law, order tax forms, ask questions about their tax accounts, as well as make needed
adjustments to their accounts and pay back taxes.
The amount of contact that currently takes place between taxpayers and the IRS is
staggering--about 100 million pieces of correspondence and over 70 million phone calls.
Because different telephone sites handle different issues, taxpayers often must make
several contacts, instead of just one, to take care of an IRS-related issue. Currently,
only 60% of taxpayers get through to the IRS on their first call.
How Customer Service Sites Will Operate
IRS has determined that providing one-stop service to taxpayers using sophisticated
data and telecommunications systems would be accomplished more effectively with fewer
sites. The 23 customer service sites will be located in:
Andover, Mass. Dallas, Texas Ogden, Utah
Atlanta, Ga. Denver, Colo. Philadelphia, Pa.
Austin, Texas Fresno, Calif. Pittsburgh, Pa.
Baltimore, Md. Indianapolis, Ind. Portland, Ore.
Brookhaven, N.Y. Jacksonville, Fla. Richmond, Va.
Buffalo, N.Y. Kansas City, Mo. St. Louis, Mo.
Cincinnati, Ohio Memphis, Tenn. Seattle, Wash.
Cleveland, Ohio Nashville, Tenn.
Data communication lines will link customer service sites to tax data bases located in
IRS computing centers so that complete information needed to resolve issues with taxpayers
will be readily accessible when taxpayers call. Interactive voice response applications
will handle about 45% of all taxpayer call. Taxpayers with issues which cannot be resolved
through interactive voice response capabilities will be connected to customer service
representatives who will have on-line access to taxpayers' current and past accounts, the
capability to analyze accounts and take actions, and more detailed tax law information.
Customer service representatives will also initiate telephone calls to resolve tax
issues. These contacts will include information needed to complete tax return processing.
IRS will also be able to contact taxpayers earlier to resolve nonfiling and nonpayment
cases. Accounts receivable currently total about $27 billion and an estimated 10 million
individuals and business have not filed required tax returns.
In 1994, IRS will test consolidated customer service centers in the Fresno Service
Center, Nashville District and two other sites to be determined. Site preparation will
begin in other locations with the installation of automated call distributors and
interactive voice response units. Specific site schedules are not yet final; as the
operating concepts are fully tested and sites are prepared, including extensive training
for employees, the centers will be phased in through the mid-1990s.
Role of Submission Processing Sites
Although as many as 80 million taxpayers will file electronically by the year 2001,
significant amounts of paper will continue to be sent to the IRS. Electronically filed
returns will be sent directly to the three previously announced IRS computing centers.
Paper filings will go to five submission processing centers that will convert the
paper-based data to electronic data for processing. The five submission processing sites
will be located in Austin, Tex.; Cincinnati, Ohio; Kansas City, Mo.; Memphis, Tenn. and
Ogden, Utah. These locations are current IRS service center locations.
The submission processing centers will transmit electronically captured data to
computing centers for entry into taxpayer accounts, compliance analysis and inclusion in
on-line data bases. Submission processing centers also will store electronic images of tax
The future system differs markedly from current processing operations. The ten service
centers receive about 200 million tax returns a year from individuals and businesses. This
paper goes through an extensive handling in a pipeline operation where it is sorted,
checked for accuracy and prepared for manual direct data entry. The current system
produces errors and delays that frequently require the service centers to contact
Enhanced character recognition technology for processing single-side paper documents
will be piloted in the Cincinnati Service Center in 1994. Imaging technology for
processing more complex multi-page documents will be piloted in the Austin Service Center
All five submission processing centers are scheduled to have the new processing
technology by 1997, with full implementation for all types of returns by the year 2000,
IRS is currently looking to revise tax forms to simpler answer sheet formats that will
enhance taxpayer accuracy and ease of processing.
How Customer Service and Submission Processing Sites Were
In 1992 IRS conducted in-depth studies to determine the number and locations of the
future customer service and submission processing centers. For the customer service center
analysis, IRS considered the 44 locations of the current 70 telephone sites. For the
submission processing centers, the current 10 service center locations were considered.
IRS performed a cost analysis of labor, telecommunications and space. Productivity of
the current operations was also considered, as well as recruitment potential for each area
and the impact that changes would have on workforce diversity.
Role of District Offices
IRS district offices, which collectively have over 600 field offices under their
direction, will continue to help taxpayers who require face-to-face assistance, conduct
tax return examinations, work collection cases that cannot be resolved through billing or
telephone contacts and conduct civil and criminal compliance investigations.
Compliance work performed in the districts will increasingly focus on market segment
analysis and a wide range of solutions to compliance problems. These solutions may include
revising a rule or impractical procedure, or providing information and taxpayer education,
in addition to more targeted use of traditional enforcement personnel.
Retraining, Redeployment and Reinvestment
As the IRS restructuring progresses, most jobs will be changed in some manner. Some
current job categories may not be needed due to consolidating the new ways of doing
business in toll-free call sites, computing centers and processing centers. In other
cases, new job categories will have to be developed.
IRS has committed to the smoothest possible transition and has developed human resource
policies to do so. Affected employees will be offered redeployment to comparable positions
and retrained for their new jobs. IRS management has been working with the National
Treasury Employees Union to develop specific guidelines about how the retraining and
redeployment policies will work.
Previous | Next
1993 IRS News Releases | News Releases Main | Home