April 05, 1999
Filing Season Heralds More
Changes at IRS
WASHINGTON - The Internal Revenue Service has taken a number of
important steps during this year�s filing season to improve taxpayer
service, but more work remains in the years ahead to finish the agency�s
transformation into a customer-oriented organization, IRS Commissioner
Charles O. Rossotti said Monday.
�We have achieved a great deal of success this year, but we have a long
road in front of us,� Rossotti said. �Modernizing the IRS will require
fundamental changes in almost every aspect of the agency. The process
will take years, but it is essential for the IRS to achieve a higher
level of performance to meet the needs of taxpayers and the nation.�
Rossotti outlined his vision for the IRS during a gathering of members
of Washington�s Regional Reporters Association. With the April 15 tax
deadline just 10 days away, Rossotti said the IRS has shown progress in
several areas this year:
Taxpayers continue using electronic filing at a record pace. Computer
e-filing of tax returns � either by tax preparers or those using home
computers � is 23 percent ahead of last year.
Electronic filing and the new $400 child tax credit have helped
encourage more taxpayers to send in their returns early this year.
Returns are nearly 3 percent ahead of last year�s pace. Despite the
early influx of tax returns, overall IRS processing remains slightly
ahead of last year.
As part of the IRS�s emphasis on service, taxpayers can now reach the
toll-free IRS help line (1-800-829-1040) 24 hours a day, seven days a
Taxpayers have used various IRS services � telephones, the IRS web site
and in-person assistance � tens of millions of times this year. The
IRS�s �Digital Daily� web site at www.irs.ustreas.gov has received more
than 500 million hits since Jan. 1 � more than 150 percent ahead of last
�We need to build on the successes of this year�s filing season to help
us prepare for the next steps of the IRS reorganization,� Rossotti said.
�Simply put, we have a lot of work to do in the years ahead.�
Several long-term changes are in the works that will fundamentally alter
the way the IRS does business.
Following passage of last year�s landmark IRS Restructuring and Reform
Act, the entire agency is reorganizing. Starting later this year, the
IRS will begin shifting from being geographically based in 33 local
district offices to a customer-based structure built around four major
groups of taxpayers:
The Wage and Investment Income Operating Division will cover 88 million
tax filers. This category includes all 1040 filers.
The Small Business & Self-Employed Operating Division will cover 40
The Large and Mid-Size Business Operating Division will cover 170,000
The Tax Exempt Operating Division will cover about 1.5 million filers.
The IRS also has embarked on a massive computer modernization effort to
replace systems dating to the 1960s with state-of-the-art technology
that can improve service and add new security features.
�To improve service, the IRS needs to break out of its technological
time warp,� Rossotti said.
The IRS is working with a consortium of private companies in a computer
modernization effort that�s expected to touch on every facet of the
agency. The project, called the Prime contract, is expected to last
The combination of changes reflect the new IRS mission statement to
�provide America�s taxpayers top quality service by helping them
understand and meet their tax responsibilities and by applying the tax
law with integrity and fairness to all.�
�The IRS has the opportunity to rise to a new and much higher level of
performance,� Rossotti said. �If we are successful, millions of American
taxpayers will benefit for years to come. They will have a tax agency
serving them the way they expect to be served.�
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