Appendix C

Methodology

 

Congress created the National Commission on Restructuring the IRS to review the present practices of the IRS, and recommend how to modernize and improve the efficiency and productivity of the IRS while improving taxpayer services. In addition, Congress asked the Commission to examine whether the IRS could be replaced with a quasi-governmental agency, and whether the IRS could perform other collection, information, and financial service functions for the federal government.

Given the scale of this task, the Commission outlined six core areas for its review. Over the past twelve months, the Commission reviewed: (1) taxpayer services, including quality programs, resource allocation, taxpayer inquiries and accounts management, and the role of the Taxpayer Advocate; (2) the management and governance structure of the IRS, including the role of the Commissioner and appropriate oversight structures; (3) the current hiring, training, and evaluation practices of the IRS, and steps that could be taken to ensure that a high caliber workforce is in place; (4) the IRS technology programs, including the use of technology to improve business operations, the systems development and oversight processes, potential methods for making return filing paperless, and safeguards to ensure taxpayer privacy; (5) financial management issues, including the annual audit and budget processes, as well as accounts receivable and the tax gap; and finally, (6) the effects on tax administration of complexity in the law and the constant changing of the Internal Revenue Code.

The Commission took a qualitative approach, spending the majority of its time listening to American taxpayers and experts on the IRS and the tax system. The Commission held twelve days of public hearings to take testimony from public and private sector experts, academia, and citizens’ groups. In addition, the Commission held three town meetings outside of Washington, in Cincinnati, Des Moines, and Omaha. The Commission also heard from thousands of individuals who accessed the Commission’s internet site, and hundreds of others who corresponded with the staff.

In conducting its review, the Commission sought to involve all relevant stakeholders to develop a thorough understanding of the current state of the IRS. In particular, the Commission worked with the IRS and Treasury to ensure that its recommendations would be based on a full understanding of the organization. We held hundreds of hours of private task force meetings with experts and witnesses to review IRS operations, management, governance, and oversight. In addition, the Commission interviewed more than 500 individuals, including both current and former IRS employees and managers, congressional committee members and staff, executive branch officials, and public sector advisors.

As part of its work plan, the Commission interviewed many senior managers in the IRS today, and many who have recently left government service. The Commission hired a consultant who interviewed over 300 IRS field employees, from all levels and functions, in an effort to learn what barriers they face in trying to effectively perform their jobs and deliver on the mission of the IRS.

The Commission began its fact finding efforts by studying the history and organization of the IRS. It examined prior studies of the IRS, including the report of the 1924 Senate Select Committee on the Bureau of Internal Revenue, S. Rep. No. 27, 69th Cong., 1st Sess. (1926), and the 1953 report of the Ways and Means Committee’s subcommittee on Administration of the Internal Revenue Laws, 83rd Cong., 1st Sess. (Subcommittee print). The former study led to the creation of the Joint Committee on Internal Revenue Taxation; the latter report was written contemporaneously with the IRS reorganization (which was commenced by the Truman administration in 1952), which attempted to decentralize and depoliticize the IRS.

In addition to studying prior reviews of the IRS, the Commission reviewed thousands of other reports and documents on various aspects of the IRS, many of which were prepared by the IRS and the GAO.

Following are listings of the Commission’s hearings and witnesses who provided testimony, individuals who spoke with the Commission or staff, and groups and consultants who provided services and research on various issues. Copies of formal testimony and many other Commission documents are available on the Commission’s internet site at http://www.house.gov/natcommirs/main.htm.