# Internal Revenue Service | Taxpayer First Act > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A1837699a27f4090d ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text TAXPAYER FIRST ACT REPORT TO CONGRESS January 2021 Internal Revenue Service | Taxpayer First Act Publication 5426 (1-2021) Catalog Number 74637F Department of the Treasury Internal Revenue Service www.irs.gov 1 TABLE OF CONTENTS SECTION 1 SECTION 2 SECTION 3 SECTION 4 PROLOGUE 7 1.0 COMMISSIONER’S WELCOME 11 2.0 EXECUTIVE SUMMARY 14 3.0 OUR APPROACH 28 4.0 TAXPAYER EXPERIENCE STRATEGY 33 4.1 INTRODUCTION AND EXPLANATION OF STRATEGY 34 4.2 MEASURING SUCCESS 38 4.3 EXPANDED DIGITAL SERVICES 41 4.4 SEAMLESS EXPERIENCE 46 4.5 PROACTIVE OUTREACH AND EDUCATION 53 4.6 COMMUNITY OF PARTNERS 58 4.7 FOCUSED STRATEGIES FOR REACHING UNDERSERVED COMMUNITIES 63 ENTERPRISE DATA MANAGEMENT AND ADVANCED ANALYTICS 69 5.0 TRAINING STRATEGY 73 5.1 INTRODUCTION AND EXPLANATION OF STRATEGY 74 5.2 IRS UNIVERSITY 77 5.3 TAXPAYER-FIRST TRAINING 80 5.4 CONTINUOUS LEARNING FOR ALL EMPLOYEES 81 5.5 UTILIZING TECHNOLOGY 85 5.6 MEASURING SUCCESS 86 4.8 SECTION 5 2 TABLE OF CONTENTS SECTION 6 SECTION 7 SECTION 8 6.0 ORGANIZATIONAL REDESIGN STRATEGY 93 6.1 INTRODUCTION AND EXPLANATION OF STRATEGY 94 6.2 PROPOSED FUTURE ORGANIZATIONAL STRUCTURE AND DIVISIONS 96 6.3 COMMISSIONER DIRECT REPORTS 97 6.4 RELATIONSHIPS AND SERVICES DIVISION 105 6.5 COMPLIANCE DIVISION 110 6.6 ENTERPRISE CHANGE AND INNOVATION DIVISION 113 6.7 OPERATIONS MANAGEMENT DIVISION 116 6.8 INFORMATION TECHNOLOGY DIVISION 118 6.9 MEASURING SUCCESS AND ADDITIONAL CONSIDERATIONS 120 6.9.1 MEASURING SUCCESS 120 6.9.2 NON-STRUCTURAL COMPONENTS CRITICAL TO SUCCESS 124 7.0 KEY CONSIDERATIONS 128 7.1 INTERNAL REVENUE MANUAL GUIDANCE 130 7.2 CHANGE MANAGEMENT 131 7.3 COMMUNICATIONS PLAN 133 7.4 RESOURCE CONSIDERATIONS 134 8.0 IRS NEXT STEPS 137 3 TABLE OF CONTENTS SECTION 9 9.0 APPENDIX 140 9.1 METHODOLOGY OVERVIEW 141 9.1.1 ESTABLISHING THE TAXPAYER FIRST ACT OFFICE 141 9.1.2 RESEARCH AND INFORMATION GATHERING 141 9.2 STRATEGIC ALIGNMENT 144 9.3 STATUS OF THE 42 OPERATING DIVISION PROVISIONS 145 9.3.1 EXECUTING DIVISION PROVISIONS 147 9.4 COMMUNICATIONS AND OUTREACH 151 9.4.1 INTERNAL COMMUNICATIONS VEHICLES 151 9.4. INTERNAL OUTREACH ACTIVITIES 160 9.4.3 INTERNAL COMMUNICATIONS AND OUTREACH ACTIVITIES ANALYSIS 163 9.4.4 EXTERNAL COMMUNICATION VEHICLES 164 9.4.5 EXTERNAL OUTREACH ACTIVITIES 166 9.4.6 EXTERNAL COMMUNICATIONS AND OUTREACH ACTIVITIES ANALYSIS 174 9.5 COSTING METHODOLOGIES AND DETAILED COSTS 175 9.5.1 COSTING METHODOLOGIES 175 9.5.2 ESTIMATED COSTS 178 9.6 TAXPAYER EXPERIENCE ADDITIONAL INFORMATION 181 9.6.1 STRATEGIC GOAL: UNDERSTAND, INFORM AND EDUCATE TAXPAYERS 182 STRATEGIC GOAL: PROVIDE A SEAMLESS TAXPAYER EXPERIENCE 187 STRATEGIC GOAL: EMPOWER, EQUIP AND ENABLE WORKFORCE 192 ENABLERS 196 9.6.2 9.6.3 9.6.4 4 TABLE OF CONTENTS SECTION 9 9.6.5 INTERNAL REVENUE MANUAL ADDITIONAL INFORMATION 197 ORGANIZATIONAL REDESIGN ADDITIONAL INFORMATION 198 COMMISSIONER DIRECT REPORTS ALIGNMENT TO OVERSIGHT RECOMMENDATIONS 200 RELATIONSHIPS AND SERVICES DIVISION ALIGNMENT TO OVERSIGHT RECOMMENDATIONS 202 COMPLIANCE DIVISION ALIGNMENT TO OVERSIGHT RECOMMENDATIONS 203 ENTERPRISE CHANGE AND INNOVATION DIVISION ALIGNMENT TO OVERSIGHT RECOMMENDATIONS 204 OPERATIONS MANAGEMENT DIVISION ALIGNMENT TO OVERSIGHT RECOMMENDATIONS 205 INFORMATION TECHNOLOGY DIVISION ALIGNMENT TO OVERSIGHT RECOMMENDATIONS 205 9.7.7 CRIMINAL INVESTIGATION 206 9.7.8 CYBERSECURITY 210 9.7.9 POLICY AND LEGISLATION 214 9.7 9.7.1 9.7.2 9.7.3 9.7.4 9.7.5 9.7.6 9.7.10 EXTERNAL OVERSIGHT AND ADVISORY 215 9.7.11 GOVERNANCE 216 9.7.12 CURRENT TO FUTURE ORGANIZATIONAL STRUCTURE CROSSWALK 220 9.8 FUNDING ALIGNMENT 221 9.8.1 NEW APPROPRIATIONS STRUCTURE 221 9.8.2 ORGANIZATIONAL ALLOCATION OF FUNDING 223 5 TABLE OF CONTENTS SECTION 10 10.0 BIBLIOGRAPHY 224 10.1 OVERSIGHT REPORTS, TESTIMONIES AND RECOMMENDATIONS 224 10.2 CUSTOMER SATISFACTION SURVEY RESULTS 232 10.3 PUBLICATIONS, STUDIES, BRIEFINGS AND STATU ES 237 6 PROLOGUE PROLOGUE The Taxpayer First Act (TFA) was enacted on July 1st, 2019 with strong bipartisan support to reimagine and enhance the way we serve taxpayers, continue to enforce the tax laws in a fair and impartial manner, and train IRS employees to deliver a world-class customer experience. The Act consists of 45 provisions, including specific mandates to improve the taxpayer experience. There are three provisions requiring the development of the critical plans included in this report (Taxpayer Experience, Training, and Organizational Redesign). These plans lay out a vision to revolutionize tax administration in our country for the 253 million citizens who interact with the IRS annually, and ensure that the $3.6 trillion of federal revenue that the IRS collects annually will continue. This is an aspirational vision that builds on work that is already underway and provides an investment framework for evaluating IRS funding levels in future years. However, without the commitment of significant multi-year funding, the IRS cannot make the taxpayer improvements necessary to maintain trust and confidence in the federal government and its tax collection system. High-quality, personalized service is key to helping taxpayers understand and comply with their filing and reporting obligations, well-trained employees provide excellent taxpayer service, and a streamlined organizational structure makes it easier for taxpayers and employees to navigate the agency and get the help they need when they need it. Strong technology infrastructure is critical to delivering on this vision. The Integrated Modernization Business Plan, delivered in April 2019, was developed to establish the underlying infrastructure required to modernize the IRS. However, the initial funding requested for modernization only takes us so far. While the Integrated Modernization Business Plan lays the foundation for improving the taxpayer and employee experience, the Taxpayer First Act requires us to build upon this foundation to deliver the experience taxpayers expect. The IRS currently estimates that full implementation of the Taxpayer First Act plans and Integrated Modernization Business Plan would cost $4.1 billion over the five-year period from FY2021 – FY2025 broken into three broad categories: • • • TFA Legislatively Mandated Provisions: $550 million over five years to implement specific mandates outlined in the act, apart from the development and implementation of strategies TFA Strategy Development and Implementation: $1.6 billion over five years to develop and implement the Taxpayer Experience, Training and Organizational Redesign plans required by the TFA IRS Modernization Plan: $1.9 billion associated with achieving necessary modernization of IRS systems, cybersecurity and operations Additional costing details can be found in the Appendix 9.5.2. Internal Revenue Service | Taxpayer First Act 7 7 PROLOGUE In addition, in FY2020 the IRS spent $68 million on the implementation of TFA legislatively mandated provisions. FY2020 expenses were funded out of our original budget allocation as no funding was specifically appropriated to cover those needs. Our FY2021 budget submission requested funding of $106 million for implementation of the legislatively mandated provisions of the Taxpayer First Act and $300 million for the Modernization Plan. The TFA mandates included in the Act are aimed at strengthening taxpayer rights, modernizing the IRS and combating identity theft and fraud. The IRS estimates that full implementation of these requirements by FY2025 would cost an additional $444 million, roughly $111 million per year, above the amounts previously committed or requested. Some of the provisions that require significant additional investments include: • Provision 1001, Establishment of IRS Independent Office of Appeals: Renames the IRS Office of Appeals as the IRS Independent Office of Appeals and adds new rules that require the Independent Office of Appeals to make its referred case files available to: • Individuals with adjusted gross incomes of $400,000 or less for the tax year to which the dispute relates; • Entities with gross receipts of $5 million or less for the tax year to which the dispute relates. In addition, when the IRS or Chief Counsel has issued a notice of deficiency to a taxpayer and denies the taxpayer’s request for referral to the IRS Independent Office of Appeals, the IRS must now issue a notice to explain the reasons. It also needs to tell the taxpayer how to protest the denial. • Provision 2102, Internet Platform for 1099 Filings: Requires the IRS to develop an Internet portal by Jan. 1, 2023 that allows taxpayers to electronically file Forms 1099. The website will provide taxpayers with IRS resources and guidance, and allow them to prepare, file and distribute Forms 1099, and create and maintain tax records. • Provision 2005, Identity Protection Personal Identification Numbers: Requires the Secretary to establish a program to issue an Identity Protection (IP) PIN to any U.S. resident who requests one. Additionally, the Act requires the Secretary to expand the issuance of IP PINs every year and ensure nationwide availability within five years. • Provision 3101, Mandatory E-filing by Exempt Organizations: Extends the requirement to e-file to all tax-exempt organizations required to file statements or returns in the Form 990 series or Form 8872 (Political Organization Report of Contributions and Expenditures). The Act also requires that the IRS make the information provided on the forms available to the public in a machine-readable format as soon as possible. Internal Revenue Service | Taxpayer First Act 8 8 PROLOGUE The IRS stands ready to begin a new era in tax administration that is: • Taxpayer Focused: We should provide interactions that are efficient, informative, personalized and convenient. Taxpayers should have the information they need to understand and comply with their taxes. Key elements of this program include: • Expanded Digital Services: Simplifying the tax process with enhanced mobile and online experiences, digital filing and payment options, and online portals for tax professionals. • Seamless Experience: Enhancing self-service capabilities and IRS-assisted service capabilities, expanding access to the IRS by providing taxpayers with their preferred channel of service (website, telephone, in person, etc.) and integrating those channels to provide a seamless experience throughout the taxpayer lifecycle. • Proactive Outreach and Education: Providing clear and timely communications, improving how and when we provide information to taxpayers by using new technology, applying behavioral insights, expanding our social media strategy, and making use of our trusted partnerships. • Community of Partners: Building on our existing partnerships and developing new partnerships to create an interactive network of trusted partners across the tax community. • Focused Strategies for Reaching Underserved Communities: Establishing specific strategies to engage with underserved communities to address issues of communication, education, transparency, trust, and access to quality products and services, including providing customized education and outreach in the languages spoken by specific taxpayer groups. • Enterprise Data Management and Advanced Analytics: Developing a secure data management strategy that includes an agency-wide understanding of operational data and applying advanced analytics to better understand taxpayer needs to improve service and compliance. Internal Revenue Service | Taxpayer First Act 9 9 PROLOGUE • • Employee Focused: Our employees should be well-trained, adaptable, highly motivated and customer-focused. IRS employees would receive comprehensive and thorough training - both substantively (on the law and mechanics) and attitudinally (utilizing world-class customer experience techniques). Key elements of this program include: • Streamlining current training processes through the creation of a centralized educational organization, or “IRS University” to support the IRS mission. • Developing annual training on taxpayer rights and focusing employee training on early, fair, and efficient resolution of taxpayer disputes. • Ensuring consistent skill development and employee evaluations across the IRS. Delivered Efficiently: We are modernizing our organizational structure to better align operations with our mission, increase agency-wide collaboration, and deconstruct operational silos. Key elements of this program include: • Realigning the IRS’s organizational structure to increase consistency across compliance functions and taxpayer services. • Improving the leadership structure, reducing organizational redundancies and removing silos. • Providing solutions to best position the IRS to combat cybersecurity and other threats. Compliance with the statutory requirements of the TFA, including the full implementation of the strategies included in this report and the key TFA mandates, will fundamentally change the taxpayer experience. This would improve trust and confidence in the IRS which can result in improved compliance, reducing the tax gap and benefiting every taxpayer. But we must first improve our core technology infrastructure. To truly “Put Taxpayers First” and successfully implement the Taxpayer First Act, the IRS needs adequate funding. Investing in the IRS represents an investment in the future of the United States and the delivery of important services every American deserves. Internal Revenue Service | Taxpayer First Act 10 1 0 1.0 | COMMISSIONER’S WELCOME 1.0 COMMISSIONER’S WELCOME I am pleased to provide you with this report on the progress we have made to implement the Taxpayer First Act and our Taxpayer Experience, Training and Organizational Redesign Strategies. As the Commissioner of the Internal Revenue Service (IRS), I would like to thank the Congress for providing us with a great opportunity to reimagine the way the IRS does business. Signed into law on July 1, 2019, the TFA gives us the opportunity to shape our future and rethink the way we operate. In particular, the way we interact with taxpayers, the way that we train our employees, and the way we structure our organization are important foundations for our future success. This report lays out a vision to fundamentally change the way we operate, building upon our strengths, with additional focus on areas to improve the important service we provide to our great country. More than 20 years ago, the IRS Restructuring and Reform Act of 1998 led to significant changes, including increased taxpayer rights and our organizational design based on taxpayersegment focused operating divisions. While those changes served tax administration well, the world has evolved. The IRS must consider the increased role of technology in our lives, globalization, and our diverse and expanding taxpayer base. If enabled by adequate funding, TFA gives us a chance to transform the IRS into a true 21st century Agency. In this report, we explain our vision for the Taxpayer Experience, Training, and Organizational Redesign Strategies required by the TFA and our implementation progress to date. By integrating our three Strategies, we will train and empower IRS employees to deliver exceptional taxpayer service within an efficient organizational structure. Throughout the report, you will find a consistent theme of improved technology, seamless service, and access for all taxpayers. I hope you will share my excitement about our path to transform the IRS into a trusted, user-friendly, Internal Revenue Service | Taxpayer First Act 11 1 1.0 | COMMISSIONER’S WELCOME digital enterprise accessible to all taxpayers, regardless of location, occupation, educational level, or language proficiency. While some of our plans are aspirational, I want to emphasize that we are committed to tangible, lasting reform. Taxpayers will see improvements over the next 1-2 years as we more deliberately integrate and design services, and incrementally expand our capabilities. Our goal is for the IRS to evolve into an organization that anticipates their needs and proactively communicates easyto-understand information in the languages they prefer. Similarly, tax professionals should have access to the information they need and be empowered to collaborate with the IRS to further innovate and improve the taxpayer experience. We will continue to build upon our current use of data analytics to drive efficient decision making and implement changes. We are committed to ensuring that our programs and services are accessible to all our customers, fairly, and equitably, with emphasis on reaching traditionally underserved communities. We can accomplish all of this and more in partnership with the Congress, taxpayers, tax practitioners and other stakeholders. IRS employees are key stakeholders in this effort. During my tenure at the IRS, I have been constantly amazed at the talent and diligence of our employees, their desire to serve taxpayers and the pride they have as civil servants. Although we have faced a number of challenges in a short time, from the 35-day government shut-down in 2019 to the ongoing COVID-19 pandemic, our employees continue to collect the funds to support our nation and deliver payments to assist Americans. Through this spirit and the desire to do the right thing for taxpayers we serve, the IRS has developed what I believe are the strongest strategies to drive our agency into the future. Our TFA team worked diligently and collectively with the IRS leadership team over the past year to research, listen, learn and synthesize information from many sources. These sources include IRS employees, taxpayers, tax professionals, oversight partners and other external stakeholders. The amount of feedback collected is nothing short of phenomenal, and I am proud of the report Internal Revenue Service | Taxpayer First Act 12 1 2 1.0 | COMMISSIONER’S WELCOME we produced. That being said, the work is not yet done. It will take major effort, strategy and funding to execute the plans we have made. The listening does not stop with the information we have collected. We will implement continuous feedback loops to hear from taxpayers and our stakeholders. As you will read, the full report includes both near term operational plans and a long term aspirational vision. We recognize that it will take additional planning and funding to execute the plans outlined in these strategies. I trust that you will recognize the strength and vision in the strategies we present and provide the support the IRS requires to execute them in the coming years. I am also confident our efforts to be more transparent and transform the IRS will increase trust in the IRS, improve voluntary compliance and assist all taxpayers in meeting their tax obligations to provide crucial funding for our nation’s operations. The future of the IRS belongs to us. If we stand together, focused on our mission, there is no limit to what we can do. Thank you, Charles P. Rettig IRS Commissioner Internal Revenue Service | Taxpayer First Act 13 1 3 SECTION 2 SUMMARY Internal Revenue Service | Taxpayer First Act EXECUTIVE 14 2.0 | EXECUTIVE SUMMARY 2.0 EXECUTIVE SUMMARY The IRS operates at an unparalleled level of scale and complexity. We aim to provide America’s taxpayers top-quality service by helping them understand, enable them to voluntarily comply, and meet their tax responsibilities while enforcing the law with integrity and fairness to all. In FY2019, the IRS collected more than $3.56 trillion in gross taxes and issued almost 122 million refunds1 - all amounting to more than $452 billion in tax refunds. All of this is possible because of our workforce; the approximately 75,000 dedicated public servants that take pride in serving taxpayers and their country. This report describes how we can transform the IRS into a modern, efficient, and taxpayercentric centered agency. One that is easily accessible for all taxpayers, including traditionally underserved communities. The report outlines three strategies that build upon one another: Taxpayer Experience, Training and Organizational Redesign. Our Taxpayer Experience, Training, and Organizational Redesign Strategies will re-shape the IRS into a nimbler enterprise, readily capable of taking advantage of emerging technology. These strategies are built upon the exceptional work the IRS is already doing, but in many other ways, they are aspirational. We intend for the strategies described in this report to reimagine the taxpayer experience. Our strategies will guide our future strategic planning efforts and we will continue to coordinate across the agency to align on new initiatives. We will leverage the Taxpayer First Act strategies to inform our FY2022-2026 Strategic Plan. While the strategies are flexible enough to adjust to budget realities, delivering the type of experience American taxpayers expect and deserve will require funding. Scope of the Report With 45 provisions, the Taxpayer First Act reflects a wide-ranging effort to improve IRS operations. As described below, this report addresses the Act’s three most-sweeping provisions related to taxpayer service (Section 1101), employee training (Section 2402) and organizational structure (Section 1302).2 Each of these provisions mandates a report to the Congress. 1 IRS 2019 Data Book. Unless otherwise specified, all Section references herein are to the Taxpayer First Act of 2019, Pub. Law No. 116-25, 133 Stat. 981 (2019). See Appendix 9.3 for more information about the other TFA provisions, many of which have already been implemented. 2 Internal Revenue Service | Taxpayer First Act 15 1 5 2.0 | EXECUTIVE SUMMARY • Section 1101, Comprehensive Customer Service Strategy, requires the IRS to develop a comprehensive customer service strategy that includes best practices similar to those provided by private industry to meet taxpayers’ reasonable expectations, including expanded online services, telephone callback services and employee training. The provision also requires us to assess opportunities to co-locate services with other Federal agencies. Importantly, Section 1101 requires that we identify short-term (one to two years), mid-term (three to five years) and long-term (ten years) goals and to develop metrics for measuring our progress.3 • Section 2402, Comprehensive Training Strategy, directs the IRS to create a comprehensive training strategy to streamline and improve our current training processes, technology and funding. Under this provision, our strategy must include annual training on taxpayer rights with a focus on ensuring that employees can resolve taxpayer issues early, fairly and efficiently. Our strategy must also ensure consistent skill development and employee evaluations throughout the IRS. • Section 1302, Modernization of IRS Organizational Structure, mandates the IRS develop an organizational redesign strategy that prioritizes the taxpayer experience to ensure taxpayers can easily and readily receive the help they need. The strategy will also streamline the structure of the organization and best position the IRS to combat cybersecurity and other threats. Finally, Section 1302 requires us to specifically address whether the current IRS Criminal Investigation Division should report directly to the Commissioner. Rather than prescribing a particular outcome, Section 1302 gives the IRS the flexibility to determine what type of organizational structure would best serve taxpayers. We consolidated the reports required by Sections 1101, 2402 and 1302, because we believe our Taxpayer Experience, Training and Organizational Redesign Strategies are inextricably linked. Well-trained employees provide excellent taxpayer service, and a streamlined organizational structure makes it easier for taxpayers and employees to navigate the agency and get help when they need it. Our three strategies represent the IRS’s vision and bring the intent of the TFA to life. Implementation of the other 42 TFA provisions complements our three strategies. Together, they will bring a game-changing focus to the agency and our workforce. Throughout this report, we use the terms “taxpayer” and “customer” interchangeably. We also refer to the strategy developed under Section 1101 as our Taxpayer Experience Strategy, because the “experience” is the sum of all interactions and includes every touchpoint with a product or service. 3 Internal Revenue Service | Taxpayer First Act 16 2.0 | EXECUTIVE SUMMARY The Three Strategies To develop our strategies, we conducted in-depth research and devoted months to engaging with a wide array of stakeholders. We listened carefully with an emphasis on lessons learned and we strongly considered prior recommendations from our oversight partners.4 As a part of our development process, we developed three overarching goals: • Enhance the taxpayer experience • Enhance the employee experience • Improve operational efficiencies Our report further details the objectives and measures that we will use to meet these three goals. Taxpayer Experience Strategy The taxpayer experience goes beyond “customer service” to solve a problem. It encompasses all taxpayer transactions with the IRS across our service, compliance, and other program areas throughout their lifetime of interactions with the organization. In addition to helping individual and business taxpayers meet their responsibilities and providing services to the tax professionals who represent them, the IRS devotes significant resources to meeting the special needs of tax-exempt organizations, employee retirement plans and government entities in complying with tax laws. These entities, though exempt from federal income tax, rely on IRS services and represent a significant aspect of tax administration. 4 Section 3.0 and Section 9.4 provide detailed descriptions of our outreach and research. Internal Revenue Service | Taxpayer First Act 17 2.0 | EXECUTIVE SUMMARY With this in mind, we set out to develop a holistic strategy to meet the needs of all taxpayers and other entities that rely on the IRS for information and services. Reflecting both near-term and long-term goals, our Taxpayer Experience Strategy consists of six components: • Expanded Digital Services to provide self-service channels by building on existing online accounts and introducing online accounts for tax professionals and business taxpayers. • Seamless Experience to guide taxpayers to the resources and communication channels that will resolve their issues. • Proactive Outreach and Education to educate taxpayers by providing information at the time, in the language, and by the method they prefer through applying behavioral insights, using new technology, and continuing to use and expand upon our trusted partnerships. • Focused Strategies for Reaching Underserved Communities to consolidate programs that engage with these communities to address communication, education, transparency, trust, and other constraints some face in accessing information and services. • Community of Partners to establish, guide and facilitate a collaborative and interactive network of partnerships across and beyond tax administration – including the public, private and non-profit sectors – to share best practices and amplify our ability to reach taxpayers with the information they need. • Enterprise Data Management and Advanced Analytics to develop a data management strategy that includes an agency-wide understanding of the taxpayer experience, emerging needs and expectations, and operational data. We will develop capabilities that are scalable across all taxpayer segments – including individuals, domestic and international businesses, tax exempt organizations, governmental entities, as well as our private industry partners and other communities. In this report, we present estimated timelines (1-2, 3-5, and 10 years), high-level costing, and measures of success for each component. Implementing our Taxpayer Experience Strategy will give taxpayers the information they need to understand and comply with their taxes. Furthermore, taxpayers will know their feedback has been heard. As a result, taxpayers should have more confidence and trust in the IRS. Section 4 of this report provides a detailed description of the Taxpayer Experience Strategy. Internal Revenue Service | Taxpayer First Act 18 2.0 | EXECUTIVE SUMMARY Training Strategy With approximately 75,000 IRS employees assigned to over 500 offices across the nation, training has never been easy. Effective training and development improves employee productivity, overall job satisfaction and commitment. Additionally, it reduces employee turnover, decreases costly errors and increases overall quality of work. Our Training Strategy will strive to improve upon existing training and employee development efforts and our unified approach will enable training to be more relevant and holistic for employees. We will enhance training technology and integrate additional technological tools to improve the employee training experience. We will build on previous efforts to develop this Service-wide approach and include new taxpayer-service concepts into our curriculum. This strategy includes five components: • IRS University to serve as an innovative, centralized learning function to improve training and encourage collaboration across the organization. The University will build on and unify our training and development communities and will feature four academies (Taxpayer Service, Tax Administration, Information Technology (IT) and Operations Management, and Leadership) to organize training curricula around structured yet flexible career paths. • Taxpayer-First Training to equip all employees with a working knowledge of our Taxpayer Experience Strategy, Taxpayer Rights and organizational awareness through a standardized curriculum, while encouraging professionalism, effective communication and empathy. The IRS will also emphasize training on civility, inclusive behaviors, cultural competency, taxpayer rights and multi-language access. We will integrate new taxpayer-service concepts into current training to ensure employees are well equipped to solve taxpayer issues. • Continuous Learning for All Employees to build on our efforts to provide ongoing professional training for employees from the first day on the job throughout their entire career with the organization. A fully realized continuous learning environment will equip employees to perform their current role, develop higher levels of technical expertise along a career path and support the acquisition of portable skills to allow employees to change roles within the IRS. • Improving Technology to create accessible, high-quality and effective training programs to optimize the employee training experience. We will implement new technology to accommodate the administration, delivery and tracking of the training lifecycle. • Measuring Success to allow us to make necessary training adjustments and continuously improve our training capabilities. Internal Revenue Service | Taxpayer First Act 19 2.0 | EXECUTIVE SUMMARY Based on our research, we know that employees want to get the most out of their training. They respond well to experienced trainers who are confident in their field and adept in engaging in traditional and virtual classroom environments. IRS employees want training that is appropriately paced and allows time for practical application. Our comprehensive Training Strategy is intended to create an environment where employees receive timely training, have access to personal development resources and are equipped with the skills necessary to identify opportunities to enhance taxpayer service. As explained in this report, we aligned our Training Strategy with our Taxpayer Experience and Organizational Redesign Strategies to create a continuous learning environment for our employees. Section 5 of this report provides a detailed description of the Training Strategy. Organizational Redesign Strategy While our current organizational model was, and is, effective in many areas, we recognize that changing times call for new ways of doing business for taxpayers and IRS employees. As the first high-level restructuring plan in more than 20 years, our Organizational Redesign Strategy considers areas of success and opportunities for improvement. We will capitalize on our strengths and make structural changes where needed to better serve taxpayers. As mandated by Section 1302, the IRS built on previous strategic initiatives and insights, studied industry and global revenue agency trends and best practices, and assessed evolving taxpayer expectations. Through careful research of oversight recommendations, taxpayer insights and employee interviews, we identified efficiencies and eliminated redundancies, while ensuring leadership accountability for key components of the taxpayer experience and employee training. Our new organizational structure will increase agency-wide collaboration and deconstruct operational silos, thereby improving our ability to provide seamless service to our employees and taxpayers. By design, our new structure fully supports our Taxpayer Experience and Training Strategies. Internal Revenue Service | Taxpayer First Act This belongs to you; it belongs to your clients; it belongs to every person in the IRS workforce, and we want to get it right. — Charles Rettig, IRS Commissioner 20 2.0 | EXECUTIVE SUMMARY Our Organizational Redesign Strategy focuses on the following key areas: • Improve Integration of Strategic Planning and Initiative Prioritization at the Enterprise Level • Create a new Enterprise Change and Innovation Division that would serve as the IRS’s “strategic integrator”. This division would work with leadership across the agency to coordinate annual strategic planning and prioritization activities to streamline decision making and enable the agency to set and meet its short and long-term strategic goals. • The Enterprise Change and Innovation Division would pull together the Taxpayer Experience, Training, and Organizational Redesign Strategies described in this report as well as other work on strategic direction (e.g., The Modernization plan; the Enterprise Case Management and Digitalization strategies; and future-focused efforts being led by our Human Capital and Equity Diversity and Inclusion offices) to perpetuate an integrated, collaborative, agency level strategic direction. • Improve the Taxpayer Experience and Provide a Continued Emphasis on Taxpayer Rights • Create a new senior position for a Chief Taxpayer Experience Officer, who will seek to drive strategic direction for improving the taxpayer experience across the IRSincluding both service and compliance interactions. • Integrate taxpayer experience related strategies and initiatives with other agency priorities. • Provide an enterprise level holistic view of the taxpayer experience, identify opportunities in existing taxpayer-facing processes and drive continuous improvements in real time. • Combine and centralize taxpayer-facing program offices to streamline responses to taxpayer inquiries and increase coordination across the agency. • Integrate IRS services and communication channels to facilitate a more seamless and holistic taxpayer experience. • Create a smaller, taxpayer-focused Senior Leadership Team5 led by the Commissioner to ensure that taxpayer rights are foremost in our long-term planning activities. In the new organizational structure, the Senior Leadership Team will serve in place of the current Senior Executive Team. While the total number of direct reports to the Commissioner is increasing under this organizational structure, the Senior Leadership Team will be significantly reduced. 5 Internal Revenue Service | Taxpayer First Act 21 2.0 | EXECUTIVE SUMMARY • • • • Improve Operational Efficiencies • Consolidate previously segmented examination operations into one function to reduce internal duplication and fragmentation of activities and provide consistent outcomes for resolving taxpayer compliance issues. • Create a new Relationships and Services Division that operationalizes the taxpayer experience and: • Consolidates all toll-free telephone and taxpayer assistance center operations under one, “Assisted Services” organization. • Combines all outreach activities under one organization. • Combines all third-party partnership activities within one division. • Create a Data Office and an Enterprise Digitalization and Case Management Office that will improve our use of data to reduce manual processes and reliance on paper while improving compliance operations and taxpayer service initiatives. Increase Collaboration • Flatten and streamline the headquarters executive leadership structure to increase collaboration and continuity in decision making. • Provide the Commissioner with a more direct line of sight into operations and functions. Enhance Innovation • Establish a direct line from the Commissioner to the Information Technology Division to enhance critical focus on cutting-edge business processes and technology. • Continue our emphasis on innovation in existing offices that are already driving or enabling creative taxpayer approaches across the IRS, such as Procurement and Information Technology, to build an even more innovative culture throughout the organization. Continue to Improve Critical Operations Currently Serving Taxpayers Well • Focus on individualized service to combat identity theft through strong identity theft and victim assistance efforts. • Support the vital efforts of the Whistleblower Office. • Maintain an effective Criminal Investigation Office to drive an enforcement presence aligned to other compliance offices for continued coordination and emphasis. • Deliver filing season services by continuing the successful filing season Executive Steering Committee approach while gaining efficiencies through close coordination between our Information Technology Division and the new Relationships and Services Division. Internal Revenue Service | Taxpayer First Act 22 2.0 | EXECUTIVE SUMMARY Key Features and Benefits of the New Organizational Structure Figure 1: Notional Future IRS Organizational Structure The IRS Organizational Structure as of September 2020 can be found in Section 6.1. Under the new structure, shown in Figure 1, the Commissioner would be supported by a Deputy Commissioner, a Chief of Staff and ten direct reports. This team would work together to set the direction of the agency, empower the workforce, enhance innovation and improve the taxpayer experience. Internal Revenue Service | Taxpayer First Act 23 2.0 | EXECUTIVE SUMMARY The new Chief Taxpayer Experience Officer (CTXO) would drive strategic direction for improving the taxpayer experience across the IRS and would help ensure a consistent voice and experience across all taxpayer segments by developing agency-wide taxpayer experience guidelines and expectations. Collaborating with peers across the entire agency, the Chief Taxpayer Experience Officer would drive an enterprise-level holistic view of the taxpayer experience. Working closely with the Relationships and Services and Compliance Divisions which will be the originating source for most taxpayer interactions, and the Enterprise Change and Innovation Office (ECIO) - the “strategic integrator”, the Chief Taxpayer Experience Officer would drive continuous improvement across the service delivery operations. The Chief Taxpayer Experience Officer’s close collaboration with the ECIO would ensure that Taxpayer Experience Strategies align with overarching enterprise priorities and any key legislative initiatives. The Chief Taxpayer Experience Officer would also seek to drive consistency across many different areas, including working within the Relationships and Services Division, Compliance Division, IRS Independent Office of Appeals and Office of Chief Counsel to facilitate the use of new tools for communicating with taxpayers and their representatives. We envision the Chief Taxpayer Experience Officer as a subject matter expert with the ability to provide other organizational units with information on changing taxpayer expectations, industry trends and ways to apply customer service best practices within the framework of IRS operations and federal limitations. This enterprise-wide approach to the taxpayer experience will ensure that taxpayer-facing capabilities are developed and deployed in a way that is scalable and usable across all interactions and not for single purpose/single use/single program area. The Taxpayer Experience Office (TXO) will also identify opportunities in existing taxpayer-facing processes and drive continuous improvements in real time. This office would help to eliminate systemic breakdowns before they can have a negative impact on taxpayers. The new Relationships and Services Division would bring together all taxpayer-facing service activities, serving as the front door to the IRS for all taxpayers and stakeholders. This division would deliver services and information to America’s taxpayers through a variety of channels – including telephone, digital, correspondence, social media and face-to-face (both in-person and through virtual technology). While the Chief Taxpayer Experience Officer would be responsible for developing and continuously evolving the Taxpayer Experience Strategy, the Assistant Commissioner of Relationships and Services would work with the Chief Taxpayer Experience Officer and Enterprise Change and Innovation Division to execute on the vision of the Taxpayer Experience Strategy. With all taxpayer-facing service channels under a single umbrella, this structure would create one division responsible for end-to-end service delivery and relationship management, while sustaining the value of having some aspect of taxpayer segmentation and specialization within the program areas. This structure would integrate channels and facilitate easier navigation of the IRS enabling a more seamless experience for taxpayers and stakeholders. Internal Revenue Service | Taxpayer First Act 24 2.0 | EXECUTIVE SUMMARY The new Compliance Division would consolidate compliance functions across taxpayer segments into one division and establish an enterprise-level Chief Compliance Officer. This change would facilitate the development of a consolidated compliance strategy that considers emerging issues across all taxpayer segments and enables Exam and Collection leadership to identify cross-cutting behavioral trends. This coordination would reduce variability in compliance processes and, working with the Chief Taxpayer Experience Officer, provide a more consistent taxpayer experience across all taxpayer interactions. Ultimately, this consolidation aims to reduce duplicative activities related to strategic planning, issue identification, work plan development, case selection, performance monitoring, and research. Coupled with our Training Strategy, this structure would create more complete and connected career paths for IRS employees. The new Enterprise Change and Innovation Division would serve as a “strategic integrator,” responsible for planning and overseeing the implementation of enterprise-wide initiatives. The Assistant Commissioner of the Enterprise Change and Innovation Division would work with leadership across the agency to coordinate annual strategic planning and prioritization activities to streamline decision making and enable the agency to set and meet its short and long-term strategic goals. Most immediately, the Strategic Planning and Legislative Implementation Office (SPLIO) within this division would coordinate the implementation of the TFA strategies (Taxpayer Experience, Training, and Organizational Redesign) through program management, governance, change management and other tactical implementation functions. SPLIO would partner closely with the Taxpayer Experience Office and the Relationships and Services Division on implementing the Taxpayer Experience Strategy, and with the Human Capital Office on implementing the Training Strategy. As strategic integrator, this office would bring together these and other discrete strategies developed across the IRS into an enterprise integrated strategy which would be leveraged by IRS Senior Leadership to identify and drive prioritization of investments. While SPLIO would be responsible for implementing TFA legislation, it would have the capabilities in place to effectively transition to leading other significant legislative implementations or enterprise level strategic initiatives as they arise. This would enable the IRS to strategically address legislative changes, standardize execution and coordinate with the appropriate operating divisions. The Chief Data Officer will be part of the Enterprise Change and Innovation Division. Working closely with his or her peers across the agency, the Chief Data Officer will develop an enterprise-wide data strategy and oversee all activities related to data and data analytics. This data strategy will provide the IRS with a framework to assess, prioritize, and address data access and analytics needs across the IRS and to guide program and policy decisions. The Chief Data Officer will also incorporate new evidence building processes needed to make better decisions to meet the changing needs and expectations of taxpayers as well as ensure strategic planning business decisions are data driven and in line with documented organizational challenges and risks. The Chief Data Officer will be instrumental in the implementation of the Data Management and Advanced Analytics aspect of the Taxpayer Experience Strategy and Internal Revenue Service | Taxpayer First Act 25 2.0 | EXECUTIVE SUMMARY will support the Enterprise Case Management and Digitalization strategies. Improved data management and analytics will feed improvements to the Compliance and Relationships and Services divisions. The Operations Management Division will be a revitalized support structure that will help the agency address many of the challenges we face in today’s current tax administration environment. Their work will include a focus on delivering internal operations and facilitating delivery of taxpayer and external stakeholder facing programs. Operations Management links various functions throughout the organization, ensuring a smooth flow of information and ease of internal and workforce operations. This division will be comprised of many of the critical existing support functions within Operations Support’s current structure. The newly designed Operations Management Division will support critical day-to-day IRS operations, enabling other functions within the organization to increase their focus on taxpayer service. Operations Management will include the Diversity Office and the Risk Office. Due to their critical roles, the Diversity Office and Risk Offices will also have dotted line6 direct reporting relationships to the IRS Commissioner. The Assistant Commissioner Chief Information Officer will oversee the Information Technology Division and will regularly interface across the IRS to understand its technology needs. The Information Technology Division will be responsible for coordinating and leading focused initiatives on technology (e.g., Strategic Oversight, Enterprise Development, Cyber, Enterprise Operations, Computing Centers, User and Networks Service, Enterprise Architecture and Engineering, and Program Modernization) in order to better respond to taxpayer demand for innovative information technology solutions and online services. This division will be responsible for all IT services and will retain a similar operational structure to the existing IT Division, including the Cybersecurity Office. However, the Cybersecurity Office will be expanded to incorporate the various cybersecurity activities across the agency. By aligning the Information Technology Division as a direct report to the Commissioner, it better enables earlier awareness and more rapid response to critical emerging technology issues. This structure will also increase collaboration with peer direct reports to address enterprise priorities and better align with our modernization efforts. This report also addresses the alignment of structural changes with oversight recommendations and the positioning of the IRS Criminal Investigation Office. Additional Considerations for the Organizational Redesign Strategy The Organizational Redesign Strategy also addresses changes to our governance structure, appropriations allocation, policy and legislation, and working relationships with our oversight and advisory partners. By modernizing our structure to increase collaboration, combine similar operations and support our employees throughout their careers, we will transform For daily operations, offices with dotted line reporting to the Commissioner, will report to their leadership but will have direct access to provide regular updates and guidance to the Commissioner. These offices will also serve in advisory roles to the Senior Leadership Team. 6 Internal Revenue Service | Taxpayer First Act 26 2.0 | EXECUTIVE SUMMARY both the taxpayer experience and our internal operations. Knowing that a restructuring of this scale cannot be realized overnight, we will take a multi-year approach to implementing our Organizational Redesign Strategy. We are committed to short-term, mid-range and longer-term improvements; however, we note that significant and long-term changes depend on continuous investment as well as legislative and policy changes. We envision dedicating FY2021 to developing an Organizational Blueprint Report that includes a detailed roadmap and project plan for restructuring the organization. Our Organizational Blueprint Report will further define the role and structure of key offices in our future organizational structure as well as an updated operating model. Lastly, we envision using FY2021 to establish and fill key new positions (e.g. Chief Taxpayer Experience Officer) and make initial organizational changes. The divisions and offices outlined in this report may change as we continue to refine our organizational structure. Section 6 of this report provides a detailed description of the Organizational Redesign Strategy. Implementation of the Taxpayer Experience, Training and Organizational Redesign Strategies We designed our strategies to be flexible depending on fiscal realities. Our implementation plans prioritize the tools, training and structure we need to fit within the funding we receive. This report will also illustrate how the IRS is already implementing some aspects of each strategy. Section 7 of this report provides a detailed description of additional key considerations for the implementation of our proposed strategies. In particular, it summarizes the estimated notional costs over five years of $2. billion in order to put this plan in place. | WHAT WE HEARD | Reimagining our organizational structure to place key organizations and Senior Leadership Team members with direct alignment to the Commissioner will strengthen the IRS’s ability to drive agency priorities and executive accountability on future initiatives while administering the tax code. The internal policies we identified under the direction of former Commissioner Larry Gibbs (serving from 1986-1989) established that, “The Internal Revenue Service be a progressive organization...and will be so administered to provide vigorous and dedicated attention to making the Internal Revenue Service a truly forward thinking organization.” (Policy Statement 1-21). Our current policy statement and future activities underscore the relevance of this thinking even today. Internal Revenue Service | Taxpayer First Act 27 SECTION 3 APPROACH Internal Revenue Service | Taxpayer First Act OUR 28 3.0 | OUR APPROACH 3.0 OUR APPROACH The Commissioner assigned a team of executives to launch and lead a Taxpayer First Act Office (TFAO) shortly after the TFA became law. The TFAO sits within the Commissioner’s Office of Chief of Staff and coordinates agency-wide implementation of all TFA provisions. For the past year and a half, the TFAO has led the integration of TFA-related communications, program management and governance. With input from IRS senior leaders, employees and other stakeholders, the TFAO also spear-headed development of our Taxpayer Experience Strategy (Section 1101), Training Strategy (Section 2402) and Organizational Redesign Strategy (Section 1302). The TFAO executives identified emerging IRS leaders and additional staff to support this work. Program planning for the office included developing a vision statement, a set of guiding principles and a timeline. Vision Statement: Working collaboratively, the Taxpayer First Act Office will reimagine our organization to enable an agency-wide focus on providing a high-quality taxpayer experience for all. Guiding Principles: As we pursue our mission and vision with honesty and integrity, we will: • • • • Coordinate and integrate. Listen, learn and then design. Build excitement through regular and transparent communications. Embrace accountability through results. Internal Revenue Service | Taxpayer First Act 29 2 9 3.0 | OUR APPROACH The listen, learn and then design principle was particularly powerful in guiding our work: • Listen: We approached this effort without preconceived notions of what our stakeholders expect from the IRS. We dedicated the first four months to conducting listening sessions across the country and around the globe, engaging a wide variety of stakeholders inside and outside of our organization.7 • Learn: Across all three strategies we reviewed extensive documentation including existing research studies, customer satisfaction results, business data, peer agency best practices and private sector industry best practices. • Design: We committed to designing a comprehensive Taxpayer Experience Strategy, Training Strategy and Organizational Redesign Strategy that would best position the agency to put taxpayers first. We based our design on what we learned from our listening sessions, research and feedback. Putting taxpayers first requires understanding taxpayer perspectives as well as the perspectives of members of the tax community, such as tax professionals and tax software developers. We gathered feedback from a wide range of stakeholders to develop comprehensive strategies. Our outreach included town halls, focus groups, internal and external interviews and forums with stakeholders across tax administration. We held more than 150 events to collect feedback, recommendations, solutions and to better understand common areas of concern. We established electronic mailboxes to receive input directly from employees, taxpayers and other stakeholders. We analyzed more than 1,000 pieces of correspondence through these inboxes. In addition, we communicated directly with internal and external stakeholders to answer questions related to the Taxpayer First Act. Internally, we engaged employees, management and senior executives from across the agency. Externally, we engaged a wide range of stakeholders to ensure we obtained a comprehensive view of taxpayers’ unique needs. This included taxpayers; partners; self-employed individuals; small, large and international businesses, tax exempt entities; advisory groups; industry groups; oversight organizations and other government agencies. We also coordinated periodically with the Office of Management and Budget (OMB), the Department of Treasury and the Congress throughout the development process. We will maintain open lines of communication with our oversight partners as we continue to implement the strategies outlined in this report. 7 See Section 9.4 for full list of stakeholders who provided feedback. Internal Revenue Service | Taxpayer First Act 30 3 0 3.0 | OUR APPROACH As part of our research and analysis, we examined numerous research studies, third-party research articles, industry best practices, as well as results from 61 different customer satisfaction surveys. Additionally, we considered recommendations from oversight reports, including the U.S. Government Accountability Office (GAO), the U.S. Treasury Inspector General for Tax Administration (TIGTA) and the National Taxpayer Advocate (NTA) and related case studies. Throughout the process, we ensured our strategies aligned with and supported the Taxpayer Bill of Rights. Based on what we learned, we identified key insights and opportunities that serve as the foundation for our strategies. This comprehensive approach allowed us to develop the Taxpayer Experience Strategy, Training Strategy and Organizational Redesign Strategy based on the needs and concerns of our stakeholders. Internal Revenue Service | Taxpayer First Act In developing its Taxpayer Experience Strategy and Organizational Redesign Plans, the TFAO has been listening to a wide array of internal and external stakeholders including tax professionals, IRS leadership, IRS employees, and the National Treasury Employees Union. — National Taxpayer Advocate 31 3 1 3.0 | OUR APPROACH Figure 2: TFAO Methodology For details about our methodology, engagement activities and research, please refer to the Methodology Section 9.1. Internal Revenue Service | Taxpayer First Act 32 3 2 SECTION 4 TAXPAYER EXPERIENCE STRATEGY Internal Revenue Service | Taxpayer First Act 33 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.1 INTRODUCTION AND EXPLANATION OF STRATEGY The taxpayer experience is the cornerstone of our mission. A positive experience increases trust in government and promotes voluntary tax compliance. During listening sessions, we learned that taxpayers and other stakeholders appreciate the service IRS employees provide, but they want more consistency and access to a wider range of services. Through interactions with online retailers, banks and other businesses, the public has come to expect top-notch service, technological solutions and personalized communications from organizations. Similarly, taxpayers expect the IRS to provide convenient access to easy-to-understand information when they need it. We must modernize our service and compliance models to meet taxpayer expectations. We have developed a strategy in which interactions with the IRS are efficient, informative, personalized and convenient. We are putting taxpayers first while ensuring fairness and compliance with the tax law. ” Internal Revenue Service | Taxpayer First Act 34 3 4 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.1 STRATEGY OVERVIEW To transform how we operate, we reimagined the taxpayer experience across six areas of focus: Expanded Digital Services to improve online experience for all taxpayers and authorized tax professionals. This includes enhancing the IRS’s online accounts for individual taxpayers and expanding this service to tax professionals and businesses. Research shows that promoting the use of self-service channels along with the use of plain language has increased voluntary compliance and decreased phone calls. Seamless Experience to provide taxpayers with their preferred channel of service (website, telephone, in person, etc.) and integrate those channels to seamlessly guide them to the help they need throughout the taxpayer lifecycle. IRS employees should be trained and empowered to resolve issues in a timely manner and will guide taxpayers to resources or to another IRS employee as appropriate. By increasing organizational awareness, integrating channels, reducing wait times and streamlining taxpayer service we increase the likelihood of taxpayer’s issues being resolved, which research shows improves compliance.8 Proactive Outreach and Education to improve how and when we provide information to taxpayers by using new technology, applying behavioral insights, expanding our social media strategy and making use of our trusted partnerships. We should communicate with (and be open to receiving communication from) taxpayers at times that are convenient to them, in a multitude of languages, and by the method they prefer. Educating taxpayers will serve to increase taxpayer confidence in meeting their tax obligations and decrease the likelihood that they will encounter compliance issues or need to contact the IRS. Accelerated outreach allows taxpayers to resolve issues and balances before the penalties and interest make these balances too large for taxpayers to effectively manage. We heard from external stakeholders – and our own employees – that it is hard to navigate the IRS. Tax administration is too broad and complex for us to ever train our employees to handle every issue that could come up, so we must focus on increasing their organizational awareness and equipping them with the tools to shepherd taxpayers to resolution. — James Clifford, TFAO Executive 8 The 2019 Comprehensive Taxpayer Attitude Survey found, on average, that taxpayers are willing to wait approximately 15 minutes on hold when using the phone. Internal Revenue Service | Taxpayer First Act 35 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.1 STRATEGY OVERVIEW Community of Partners to build on our existing relationships and develop new partnerships to create an integrated delivery network of trusted partners across the tax community. Trusted partnerships will encourage the sharing of perspectives and best practices and provide a forum to discuss innovative ideas and approaches for working with a diverse range of customer segments. The Community of Partners will support the Focused Strategies for Reaching Underserved Communities. Leveraging partnerships with those who already have established relationships and networks in hard to reach communities can amplify our messaging by providing IRS content via a trusted voice in communities. This approach already delivers benefits. For example, each year the IRS leverages partnerships with Volunteer Income Tax Assistance organizations whose programs and volunteers prepare 3.6 million returns for taxpayers with the support of only about 400 IRS employees. Focused Strategies for Reaching Underserved Communities to build on existing successes and establish specific strategies to engage with underserved communities to address issues of communication, education, transparency, trust, and access to quality products and services. We understand that some segments of the taxpayer population face unique obstacles to getting access to the information and services needed to comply with their tax obligations. To address the needs of these communities, the IRS should provide customized education and outreach in the languages spoken by specific taxpayer groups. As shown by the Earned Income Tax Credit (EITC) Underserved Outreach Project,9 developing specific strategies for underserved communities is crucial to increasing their participation. This project identified individuals who were likely eligible to claim the EITC but did not file returns. The 2014 study showed that individuals who received outreach through the mail increased filing rates for current and prioryear returns by roughly 0.5% to 1%. The study resulted in 53,000 additional filers with $180 million in additional refunds. 9 Inattention and Tax Benefits: Third-Party Reporting and IRS Outreach to Low-Income Nonfilers Research Project – conducted by Research, Analysis & Statistics Division in IRS Office of Research. Internal Revenue Service | Taxpayer First Act 36 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.1 STRATEGY OVERVIEW Enterprise Data Management and Advanced Analytics to develop a secure data management strategy that includes an agency-wide understanding of administrative data, the ability to integrate operational, employee, and customer feedback data, and analyze that data to pinpoint specific improvements to reduce costs and improve the taxpayer experience. In addition, new technology applied in a responsible and ethical manner, such as chat bot tools powered by artificial intelligence (AI), can enable ongoing, real-time learning from taxpayer needs and ultimate compliance actions, further improving both the taxpayer experience and delivery of our mission. Applying advanced analytics will help us better understand taxpayer behavior to determine the most meaningful offerings to support the taxpayer experience. This strategy is not a series of discrete approaches, but rather integrated strategies that build on each other to create the best holistic Every IRS employee is a experience for the greatest number of taxpayers. customer service officer. When woven together, and supported by the Training and Organizational Redesign Strategies, Every interaction is important. the Taxpayer Experience Strategy creates a comprehensive taxpayer experience in which —Charles Rettig, Commissioner interactions with the IRS are efficient, informative, personalized and convenient. The results of this strategy will ensure our stakeholders know that their feedback was heard and valued, increasing trust between the IRS and taxpayers. The five-year cost of the Taxpayer Experience Strategy is estimated at approximately $1.2B. Details can be found in Section 9.5.2.1. The following Sections describe each component of the strategy in detail. For each, we present the capabilities that will provide value to taxpayers, high-level costs, measures of success and an estimated timeline for phased implementation over one to two, three to five and ten years. Where applicable, we also share examples of how we are already using some capabilities to improve the taxpayer experience. For instance, IRS efforts to adapt to and address the COVID-19 emergency provide a real-time opportunity to test and evaluate some aspects of our Taxpayer Experience Strategy. See the Appendix 9.6, for more information about the strategic goals and underlying objectives that provide the framework for our Taxpayer Experience Strategy, including alignment with other IRS strategies, such as the Integrated Modernization Business Plan. Internal Revenue Service | Taxpayer First Act 37 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.2 MEASURING SUCCESS To measure the success of the Taxpayer Experience Strategy, we developed a tiered framework. By gathering and analyzing data associated with these measures, the IRS will be able to evaluate the progress of this strategy and assess the degree of success in offering new or enhanced capabilities. We also identified three measures that collectively assess the degree of success of implementing the Taxpayer Experience Strategy as a whole. The Taxpayer Experience Strategy measures are built on a tiered step framework in Figure 3, which includes “Access” measures, “Adoption” measures, and “Impact” measures. Figure 3: Taxpayer Experience Tiered Step Framework Internal Revenue Service | Taxpayer First Act 38 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.2 MEASURING SUCCESS At its highest level, this framework will help assess how the Taxpayer Experience Strategy impacts voluntary compliance. However, given the time it takes to accurately measure voluntary compliance, the framework relies on intermediary outcome measures like trust and confidence and taxpayer satisfaction as a proxy for improving voluntary compliance. Measures will be reported annually and will include baselines, targets (as appropriate)10 – or projections, and sources, for a given fiscal year. Some of these measures are new to the IRS, and for those we lay out a timetable for designing, testing and baselining them. This framework will allow us to track the effectiveness of the strategy in real-time – are we having the intended impact? Are taxpayers adopting the options we invest in? What drivers are most important to our taxpayers’ experiences? Does the way we’re implementing our strategy need to be adjusted? This robust suite of measures will inform our decision-making, and the Sections that follow each include measures to help us answer these questions. While we have aligned measures to each component of the strategy, we also developed three measures (see below) that will help us determine the success of the Taxpayer Experience Strategy as a whole. TIER WHAT WE ARE TRYING MEASURE / INDICATOR The IRS is an investment that will pay back. Investing in better customer service will result in better compliance. —John Koskinen, Former IRS Commissioner BASELINE TARGET / PROJECTION 70% (FY2019) Increase to 72% by FY2022 77% (FY2019) Increase to 79% by FY2022 73% (FY2019) Increase to 75% by FY2022 TO MEASURE Impact / Outcome Increase trust and confidence Comprehensive Taxpayer among taxpayers interacting Attitude Survey (CTAS): I with the IRS trust the IRS to help me understand my tax obligations CTAS: The percentage of Impact / Outcome Satisfaction with IRS taxpayers satisfied with their interactions personal interactions with the IRS Taxpayer Experience Survey Impact / Outcome Time to resolve your issue (TES): How satisfied were you with the IRS with the time it took to resolve your issue? In some cases, it is more effective to simply monitor a measure rather than set targets that could encourage unintentional behaviors or results. For example, while it is useful to track the usage of a call back feature, we would not want to set a target to increase the use of that feature since that would be a direct result from increased wait times. 10 Internal Revenue Service | Taxpayer First Act 39 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.2 MEASURING SUCCESS The 2018 President’s Management Agenda lays out a long-term vision for modernizing the Federal Government in key areas that will improve the ability to deliver mission outcomes, provide excellent service, and effectively steward taxpayer dollars on behalf of the American people. The Taxpayer Experience Strategy aims to align to the recent Presidential Management Agenda by enhancing customer service, establishing new relationships with our diverse set of partners, expanding existing digital capabilities, and developing new taxpayer experience tools and technology that compares to or exceed that of other Federal agencies and private industry. The suite of taxpayer experience measures will continue to evolve as the Taxpayer Experience Strategy progresses and our performance management process matures. We will continue to refine these measures and identify new measures that will best inform our efforts to continually improve and enhance the taxpayer experience. To a significant degree, our future work on measuring the taxpayer experience will be informed by repeating the listening and learning campaigns employed as part of our work to develop the Taxpayer Experience Strategy and through, the Continuous Feedback Loops and Community of Partners we deploy as part of this strategy. Internal Revenue Service | Taxpayer First Act 40 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.3 EXPANDED DIGITAL SERVICES We will expand digital services through secure online accounts and other paperless initiatives. Our goal is to empower taxpayers to resolve certain issues themselves before contacting the IRS. To do this, we must make sure taxpayers have the digital tools they need. Many taxpayers will be familiar and comfortable with this type of interaction due to similar services provided by banks and other private sector organizations. However, we continue to recognize the need to have some non-digital options, such as phone and paper, to be available for accessibility. IRS online accounts are a digital portal for taxpayers to securely access their tax information, make changes to their personal information, and communicate with the IRS online. As part of our Taxpayer Experience Strategy, we will improve the secure online accounts currently available for individual taxpayers and make similar online accounts available for businesses and tax professionals. The IRS will continue to apply the highest security standards to online accounts to protect taxpayer information, but we will also continue to make some self-service digital tools, such as online payments, available to taxpayers unable to meet identification verification and authentication requirements. Whether through a computer, tablet, or mobile phone, access to online accounts and digital self-service tools will provide a more convenient and efficient taxpayer experience. Customer feedback data across government has already showed increased satisfaction rates with Federal online services when users are logged into a personalized account. The following key capabilities form the basis of Expanded Digital Services— • Expand Individual Online Accounts: • Secure Two-Way Messaging: Give taxpayers the ability to communicate with IRS employees through their online accounts. • Taxpayer View History: Allow taxpayers to see information about their tax histories (such as refunds, payments received, amounts owed, returns filed, etc.) through their online accounts to ensure transparency and accessibility of records. • Change Account Information (“Self-Correct Entity”): Allow taxpayers to update contact information and other key details. • Digital Notifications: Generate customized taxpayer notices and letters accessible through online accounts. Taxpayers will be able to opt in to receive personalized notifications about changes to their tax situation, payment reminders and status updates on refunds or audits. This capability also supports Proactive Outreach and Education. Internal Revenue Service | Taxpayer First Act 41 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.3 EXPANDED DIGITAL SERVICES • Business Online Account: Provide online accounts and services for businesses. • Tax Professional Online Accounts: Provide online accounts for tax professionals, which allows eligible representatives to access client information and services. • Expand Payment Options: Provide taxpayers, businesses and tax professionals the ability to make payments through all channels including telephone, online accounts, mobile apps and walk-in assistance. Electronic funds transfer (EFT) and credit and debit cards interactions will remain available as well. • Secure Document Exchange: Allow taxpayers, businesses, tax professionals and IRS employees to securely upload and access documents in a centralized repository. • Digital Signatures: Allow authenticated individual taxpayers and representatives to submit electronic signatures via online accounts. The IRS has already implemented several electronic tools and paperless initiatives. For example, when the IRS began to scale back operations in March 2020 due to the COVID-19 pandemic, critical work could not continue without a way to securely and virtually communicate with taxpayers. The IRS Information Technology Division quickly provided secure email capabilities with an attachment feature that enabled taxpayer services and compliance case activities to continue. By the first week of April, the IRS procured and expanded licenses to support up to 6,000 IRS users, while simultaneously implementing enhanced security and operational requirements. In addition, the IRS Non-Filers’ online tool, developed to support taxpayers during the COVID-19 pandemic, remains available to help taxpayers sign up for Economic Impact Payments (EIP). Image of Free Tax Help page on IRS2Go app While we work to enhance existing tools and take additional steps toward an electronic environment, we understand that security must remain the foundation of our efforts. The IRS established an integrated Enterprise Case Management (ECM) and Digitalization function to take steps toward integrating these tools. Through the Secure Access Digital Identity Initiative,11 we continue to improve identity verification and authentication to reduce fraud and identity theft. In our efforts to ensure taxpayer information is protected, we must employ stringent security standards. However, data shows that not all taxpayers can pass these stringent standards and this may limit access to IRS online accounts for some taxpayers. The IRS established the Secure Access Digital Identity initiative to satisfy digital identity guidelines released by the National Institute of Standards and Technology. These guidelines apply to all federal agencies implementing digital identity services. 11 Internal Revenue Service | Taxpayer First Act 42 EXPANDED DIGITAL SERVICES The following page outlines the goals, objectives, taxpayer benefits, tax professional benefits, timeline, costs and measures associated with Expanded Digital Services. GOALS Understand, Inform and Educate Taxpayers; Provide a Seamless Experience VALUE FOR THE TAXPAYER Convenient, simple and secure way to access tax information, make changes to accounts, make payments from any device and communicate with the IRS that will significantly increase the functionality of existing self-service channels Personalized notifications about changes to tax situation, refund status and reminders, audit status and payments through Online Account Secure upload and sharing of files with the IRS Enhancements to existing IRS online accounts for individual taxpayers OBJECTIVES Provide Clear and Timely Communications New online accounts for tax professionals and businesses VALUE FOR TAX PROFESSIONALS Increase Access and Promote Transparency Establish and maintain authorized relationships with clients through the Online Account Simplify the Tax Process Secure access to clients account information and notices and perform other account services and representational duties through their Online Account Less time establishing the taxpayer’s authorization to act on their behalf Internal Revenue Service | Taxpayer First Act 43 Expanded Digital Services Timeline and Measures Secure Two-Way Messaging FY2021-2022 FY2023-2025 FY2026-2030 1-2 years 3-5 years 10 years • Establish secure one-way messaging through their online account • Establish secure two-way messaging through their online account • Expand available types and methods of secure two-way communications through their online account • View payment history • Integrate refund tracking • Enhance integrated refund tracking • Issue resolution tracking • Provide additional third-party options for making payments • Provide the ability to link bank account • Opt-in subscription for notifications • Display online payment agreement eligibility messaging • Display payment agreement status • Provide the ability to create or revise a payment agreement in online account • Enable the ability to update account information, including Address, Phone Number, etc.) • Secure document exchange • Deliver ability to view case status • Increase the functionality of online account • Expand secure document exchange capabilities • Digital notices w/ opt-in subscription for notifications • Taxpayer Digital Communications Outbound Notifications (TDC-ON) initial solution for certain notices • Tax Pro Online Account: Notifications for “Waiting for signature” or “Has been signed” statuses • Expanded TDC-ON • Expanded TDC-ON Taxpayer View History Change Account Information Digital Notifications Business Online Account • Establish business online account Tax Professional Online Account • Establish Digital Authorization (Form 8821) with eSignature • Power of Attorney (Form 2848) with eSignature Internal Revenue Service | Taxpayer First Act • Add Authorization and POA/ Fully Digital CAF • Update/Remove Authorization and POA • Expedited Access to taxpayer transcripts • Notifications for waiting for signature or has been signed • List of Clients with Access to Online Account • View payment and notice history • View case status • Practitioner Premium Access • Expanded Tax Pro Account • Enhanced digital communication tools with IRS • Access to taxpayer online account • Expanded notifications • Document exchange • Expanded practitioner premium access 44 Expanded Digital Services Timeline and Measures FY2021-2022 FY2023-2025 FY2026-2030 1-2 years 3-5 years 10 years Expand Payment Options • Establish ability to link bank account • Establish third party Access to additional payment vendors • Provide additional third-party options for making payments • Expand ability to link bank account • Expose APIs to third parties • Expanded Payment Options for all taxpayer segments • Large and small business secure messaging/file sharing • Secure document exchange • Tax Professional secure document exchange • Introduce base functionality for Digital Signatures • Establish Digital Authorization (Form 8821) with eSignature • Power of Attorney (Form 2848) with eSignature • Expand digital signatures to more forms • Allow digital signatures for the full universe of forms Secure Document Exchange Digital Signatures STRATEGIC GOAL Provide a Seamless Taxpayer Experience OBJECTIVE TIER WHAT WE ARE TRYING TO MEASURE Access Provide taxpayers with additional digital options for interacting with the IRS Percent of taxpayer interaction types that have a digital alternative 39% or 18 interaction types13 75% or 35 interaction types by FY2024 Increase use of digital selfhelp tools through Online Accounts Number of taxpayers with an active secure online profile 6.51M14 Increase by 5% annually though FY2024 Increase use of self-help tools Percent of taxpayer interactions accomplished through self-help tools (Enterprise Self Assistance Participation Rate (ESAPR)) 79%15, 16 82% FY2021 and FY2022 Adoption Increase Access and Promote Transparency MEASURE/ INDICATOR Volume of interactions completed through self-help options Impact BASELINE12 Volume: 581,374,970 FY2019 503,177,386 FY201816 Taxpayer burden reduction (Hours saved) 12 Baselines are as of the beginning FY2019 unless otherwise noted. 13 IRS Integrated Modernization Business Plan FY2019 Key Insights Report. 14 Source: IRS Integrated Modernization Business Plan FY2019 Key Insights Report. 15 Source: IRS Integrated Modernization Business Plan FY2019 Key Insights Report. 16 Source: Enterprise Self Assistance Participation Rate. Internal Revenue Service | Taxpayer First Act Time savings will need to be designed, developed and tested TARGET/ PROJECTION Test measures in FY2021; Baseline in FY2022; Set target/ projection for FY2023 45 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.4 SEAMLESS EXPERIENCE To augment expanded digital services, we will create a seamless experience that helps taxpayers solve problems and comply with their tax obligations. We will integrate digital tools with other service channels (e.g., toll-free telephone assistance and walk-in assistance) into a seamless experience to resolve issues efficiently and further improve the taxpayer experience. Taxpayers expect and routinely encounter similar “omni-channel”17 approaches with services like online banking and shopping. Using our omni-channel model, taxpayers will have the flexibility to communicate with the IRS and resolve issues via their preferred method and transition seamlessly to another resource or channel. The seamless experience will reduce telephone wait times and help resolve issues more quickly and efficiently. As part of the Seamless Experience, we will equip IRS employees across service and compliance functions to better navigate the IRS and to identify resources to solve taxpayer issues outside the scope of their training and expertise. The following key capabilities are the foundation of our Seamless Experience— • Expand Automated Callback: Allows taxpayers to provide their telephone number and opt for an IRS employee to call them back instead of waiting on hold. • Wait Time Transparency: Provides taxpayers estimated wait times to inform their decision on whether to remain on hold, opt for a call back or seek information on IRS.gov. • Concierge Navigation Support: Gives taxpayer-facing IRS employees the ability to provide taxpayers with the information they need or personally connect them with a subject matter expert who can assist. Each employee will receive calls and handle contacts based on the nature of the issue identified in the web chat, through topic-based routing on the phone or during casework contacts. The employee will resolve all issues within the scope of their training and expertise. If the initial employee cannot provide the assistance the taxpayer is looking for, the employee will smoothly transition the taxpayer to a subject matter expert with the knowledge and authority to handle the type of taxpayer assistance required. • 360-Degree View of Taxpayer Accounts: Provides IRS employees with a global view of each taxpayer account and gives them access to taxpayer records in real-time, including interaction history, appointment schedules, etc. This will be available through an ECM system. Omni-channel can be defined as providing a set of seamlessly integrated channels that cater to customer preferences and actively steers them toward the most efficient resolution. 17 Internal Revenue Service | Taxpayer First Act 46 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.4 SEAMLESS EXPERIENCE • Artificial Intelligence (AI)-Powered Informational Web Chat (Virtual Assistance): Allows for an AI-powered chat bot to attempt to answer questions or direct the taxpayer to helpful information on IRS.gov or to their online account based on a taxpayer’s browsing preferences on IRS.gov. Chat bots will also be able to connect taxpayers to an IRS assistor for a web chat or voice call. The chatbot will improve over time as the knowledge base expands and more taxpayer experience feedback becomes available. If the chatbot cannot resolve a taxpayer’s issue, contact routing will guide the taxpayer to live support from an IRS employee. • AI-Powered Digital Appointments: Allows taxpayers to speak with an assistor or schedule an appointment if the chatbot is unable to resolve a taxpayer’s issue. Taxpayers will also be able to schedule AI-Powered appointments with employees in other IRS organizations, like exam and collection. The chatbot will be able to determine if an assistor is needed and either “introduce” the caller to an assistor or schedule an appointment with an employee for a later time. The appointment could be with a service or compliance employee and can be in-person, telephonic, or via secure video chat. • AI-Powered Employee Assistant: Supports IRS employees when answering taxpayers’ questions with an AI-powered knowledge base that will make suggestions based on a taxpayer’s experience, questions or pages visited on IRS.gov. These capabilities integrate ongoing work within the IRS by creating a stronger, more strategic approach to putting taxpayers first. The IRS is already testing assistor-based chat and AIpowered chatbots, and we are improving our callback services. What began as a customer callback solution to support the internally facing service desk has been expanded to include a taxpayer-facing solution. Both callback deployments have met with considerable success with the service being used more than 700,000 times by taxpayers and 85,000 times by IRS employees. We estimate, in the first calendar quarter of 2020, taxpayers saved 77,000 hours per month waiting in queue. Additionally, the IRS recently integrated personalized payment plan messaging into online accounts. Once a taxpayer’s identity has been authenticated, that authentication will carry with them through the next steps in the process, saving time for both the taxpayer and the IRS. Notably, when transferring, the assistor will remain engaged with the taxpayer until assured the subject matter expert has picked up the inquiry. Handoffs between employees will be collaborative, and information will carry forward with the taxpayer. If a subject matter expert is unavailable, the IRS assistor will schedule a callback or an appointment, so taxpayers get the help they need. Internal Revenue Service | Taxpayer First Act 47 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.4 SEAMLESS EXPERIENCE We will train employees to answer questions, resolve issues, and identify additional resources within this omni-channel approach.18 In most instances, IRS assistors will provide initial live support through web chat with the ability to offer audio or video calls if preferred. As part of our Training Strategy, employees’ skills will increase over time enabling them to resolve more issues at the first point of contact. The strategy will be implemented incrementally over time as funding, staff and technology become available. To facilitate a more seamless experience for the taxpayer, the IRS will modernize the employee experience through Knowledge Bases, an organized source of information to assist employees with taxpayer inquires. In addition, a database of frequently asked questions and automated tools will further improve and streamline the employee experience. All employees who have contact with taxpayers will have access to an AI-powered Assistant that will be trained to aid them in meeting the needs of the taxpayer. If the taxpayer issue is complex in nature, the employee - as part of our new concierge navigation model - will be equipped with navigational support tools and organizational awareness training to identify a subject matter expert who can resolve the issue. We recognize that to fully implement the Seamless Experience we must invest in new technology. For example, the IRS needs an Enterprise Case Management system to give employees a single source for real-time access to a 360-degree view of a taxpayer’s history. Our current case management environment is comprised of multiple systems that often cannot communicate with each other. ECM will allow authorized IRS employees to see a taxpayer’s full account, filing history, relevant case data and prior communications to resolve cases more quickly allowing employees to resolve more inquiries in a single contact and better facilitate handoffs. For instance, a revenue agent working with a taxpayer on a compliance issue will be able to guide the taxpayer to another function for support on an account issue. 18 See Section 5.0 for additional details on the Training Strategy. Internal Revenue Service | Taxpayer First Act 48 4.0| TAXPAYER EXPERIENCE STRATEGY 4.4 SEAMLESS EXPERIENCE The IRS receives more than seven million pieces of paper correspondence per year. There is significant opportunity to increase efficiencies and improve the taxpayer The current structure confines experience by increasing the ability for work within specific BODs and limits taxpayers to submit that correspondence inter-BOD interactions of employees that digitally and enabling the IRS to convert incoming paper to digital format. The would more efficiently address problems to IRS vision is to create new and enhance improve taxpayer experience. existing digital-first channels for taxpayers to —National Treasury Employees Union correspond with the IRS, alongside enhanced digitalization capabilities to convert residual paper into a digital format. This approach will meet taxpayers in their preferred domain, which is increasingly online and on their phones. We will still provide paper options for those who may need them as well as enable the use of advanced technologies such as robotics process automation and AI to speed back office functions, promote self-service and improve the taxpayer experience. Getting paper into digital format will also enhance the employees’ 360-degree view discussed above. In sum, the Seamless Experience is key to our holistic approach to the taxpayer experience across both service and compliance interactions. IRS employees will be empowered and equipped with innovative tools to efficiently navigate across IRS operations and access Knowledge Bases to deliver seamless experience meeting the needs of taxpayers. This enhanced experience will lead to greater transparency, reduced burden and foster voluntary compliance. Internal Revenue Service | Taxpayer First Act 49 SEAMLESS EXPERIENCE The following page outlines the goals, objectives, taxpayer benefits, timeline, costs and measures associated with Seamless Experience. GOALS Provide a Seamless Taxpayer Experience; Empower, Equip and Enable Workforce OBJECTIVES Increase Access and Promote Transparency Simplify the Tax Process Equip Employees with Tools Necessary to Provide Excellent Taxpayer Service Internal Revenue Service | Taxpayer First Act VALUE FOR THE TAXPAYER Issues resolved swiftly, easily and conveniently Efficient and definitive interactions with the IRS making journey for assistance as painless as possible Information from the very first engagement with the IRS will be transferred seamlessly to the next assistor, negating the need for the taxpayer to repeat information A well-trained and better equipped IRS staff able to listen to concerns and be more responsive to any taxpayer issue raised Less time waiting on the phone with the expanded use of appointment and call back technology 50 Seamless Experience Timeline and Measures FY2021-2022 FY2023-2025 FY2026-2030 1-2 years 3-5 years 10 years • Expand telephone customer callback to additional telephone lines • Deploy expanded toll-free portal • Introduce callback by appointment • Increase number of applications that offer callback options • Add callback to Spanish applications • Enhance all callback solutions • Establish wait time communication methods • Enhance wait time communication methods • Enhance wait time communication methods • Establish robotics and Artificial Intelligence for initial taxpayer interface • Test concierge concept on limited basis • Rollout training employees on the concierge concept • Expand concierge concept capabilities and better equip IRS employees to guide taxpayers through the system • Increase resolution frequency by escalating complex issues to a Subject Matter Expert • Introduce AI-assisted chat-bot for appointments • Introduce AI-assisted employee knowledge search • Introduce Natural Language Processing by AI • Provide “click to contact” for Live Assistor Connection from digital interaction • Continue to enhance upon concierge routing and processing • Design a long-term strategy to deliver Enterprise Case Management (ECM) solution • Procure ECM Solution • Deliver initial case management capabilities • Enhance ECM solution for efficient and seamless view of all taxpayer actions, accounts and cases • Incrementally increase case management systems included in ECM to build toward a 360-degree view of Taxpayer Account by IRS Employee • Deploy omni-channel model to 360 degree view of taxpayer records in real time • tax filings • interaction history • appointment schedule, etc. • Deploy AI powered chat-bot (virtual assistance) to answer taxpayer questions or direct taxpayers to the information on the IRS.gov • Deliver capabilities to seamlessly transfer inquiries from IRS.gov to live IRS assistor for a web chat and / or a voice call • Expand AI powered information web chat to include advanced virtual assistance technologies • Expand IRS knowledge base for international taxpayers • Enhance AI web chat capabilities based on taxpayer feedback and evolving industry practices Expand Automated Callback Wait Time Transparency Concierge Navigation Support 360 Degree View of Taxpayer Accounts AI-Powered Informational Web Chat (Virtual Assistance) Internal Revenue Service | Taxpayer First Act 51 Seamless Experience Timeline and Measures FY2021-2022 FY2023-2025 FY2026-2030 1-2 years 3-5 years 6-10 years • Test chat-bot creation of appointments • Deploy and enhance AI powered chat-bot appointments • When the issue is not resolved during chatbot interaction, chatbot should be able to “introduce” the taxpayer to an assistor or schedule an appointment • Enhance chat-bot appointments • Establish and test AI-based Knowledge Base search for IRS assistors • Deliver training and Resolution Guide to IRS assistors • AI natural language support • Expand AI knowledge base • Improve the clarity of the IRMs focusing on the taxpayer’s journey • Enhance AI Support and issue de-escalation process increasing resolution frequency AI-powered Digital Appointments AI-Powered Employee Assistant STRATEGIC GOAL OBJECTIVE TIER Access Provide a Seamless Taxpayer Experience Increase Access and Promote Transparency Adoption Impact WHAT WE ARE TRYING TO MEASURE Access to an IRS Assistor when needed Access to an IRS Assistor when needed Taxpayer Satisfaction MEASURE/INDICATOR Enterprise LOS* Calls answered BASELINE19 56.63% LOS in FY201920 25.8M Assistor calls answered in FY201921 A-11 Survey Question: I am satisfied with the service I received from the IRS Develop and test measures in FY2021; Baseline in FY2022, and set target/projection for FY202322 TARGET/ PROJECTION Test FY2021; baseline FY2022; target/ projection FY2023 Develop and test measures in FY2021; Baseline in FY2022, and set target/projection for FY2023 Develop and test measures in FY2021; Baseline in FY2022, and set target/projection for FY2023 * Currently the enterprise LOS measure does not include all telephone lines, additional lines will be added in FY2021 19 Baselines are as of the beginning FY19 unless otherwise noted. 20 2019 Internal Revenue Service: Data Book. 21 2019 Internal Revenue Service: Data Book. 22 This question is not currently asked on all telephone lines. Internal Revenue Service | Taxpayer First Act 52 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.5 PROACTIVE OUTREACH AND EDUCATION Improving outreach is critical to our Taxpayer Experience Strategy. We want all taxpayers to understand how to comply with their tax obligations and access our services. With Proactive Outreach and Education, the IRS will use various means to reach taxpayers at the right time through the right format. We will deliver information and personalized messages to taxpayers using social media, simplified correspondence translated into multiple languages, customized digital options and community outreach through trusted partners. Information may be generated based on issue campaigns, errors the IRS identifies, emerging trends, and other insights gathered from our continuous feedback loop. Our success depends, in part, on expanding trusted partnerships with external stakeholders (Community of Partners) as well as amplifying efforts to reach underserved communities (Focused Strategies for Underserved Communities), which we discuss more in the next two Sections of this report. Community outreach, virtual seminars, partnerships, and engagements with schools, can assist the IRS in helping taxpayers to access services and resolve issues. Ultimately, educating taxpayers will increase taxpayer confidence in our organization, enable them to meet their tax obligations, and enable us to better anticipate and respond to taxpayer needs. The following capabilities are key to Proactive Outreach and Education— • Personalized Tax Updates: Through online accounts, allow taxpayers to opt in to receive personalized notifications about changes to their tax situation, filing reminders or status updates for refunds, audits, and payments. Further developing online accounts, increasing digital correspondence and providing more electronic reminders and notices will help ensure taxpayers have up-to-date information to comply with their tax obligations. • Social Media Strategy: Use multiple social media platforms to share IRS news and educational updates that are customized based on demographics and other taxpayer behavioral information. Social media will be used to engage taxpayers, guide them to the appropriate channel for service and communicate in a voice and style consistent with the respective platform. As our social media strategy evolves, we plan to incorporate two-way communication to resolve inquires. • Simplified Notices and Correspondence: Analyze and use data to identify necessary language translations for our notices and correspondence. Use data to improve the effectiveness of our communications in various taxpayer segments. Internal Revenue Service | Taxpayer First Act 53 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.5 PROACTIVE OUTREACH AND EDUCATION • Plain Language Communications: Redesign notices and standardize correspondence across the agency to simplify the format, educate and provide information to taxpayers in a manner that is easy to read and eliminate unnecessary legal language. Provide clear information and plain instructions to the taxpayers about why they are receiving the communication from us, and what actions they need to take. This may also include instructions for using online accounts for more detailed account information. Currently, the IRS has an extensive, multipronged communications strategy focused | WHAT WE HEARD | on print and social media, stakeholder LEP taxpayers are significantly more relationships, virtual communications and likely to be aware of IRS information on reaching underserved taxpayers. To reach Limited English Proficiency (LEP) communities, social media platforms and to have looked the IRS has developed Twitter, Facebook, and for tax information there compared to YouTube accounts entirely in Spanish and taxpayers overall. additionally, select posts on Twitter, Facebook, — 2017 Taxpayer Experience Survey LinkedIn and Instagram have been translated into five additional languages (Vietnamese, Korean, Russian, Chinese23 and Haitian Creole). Furthermore, there is also a YouTube channel in American Sign Language. We will build on these efforts and use continuous feedback and analytics to monitor the effectiveness of our communications and services and to determine the best methods, messengers, and forums to communicate and resolve taxpayer issues early and efficiently. The IRS will develop a Social Media Strategy to share content, updates, and respond in a voice and style consistent with the respective platforms and will use technology proactively to collaborate with different organizations. Through social media, we can facilitate early issue resolution, including increasing awareness of IRS service options and promoting convenient self-service digital tools. The IRS demonstrated this approach with expanded social media work during delivery of the Economic Impact Payments. Expanding our social media presence will also allow our external partners, such as other government agencies, members of the Congress, and Low-Income Tax Clinics to better serve their constituents by easily linking to critical IRS messages. Later in this report, as part of our Focused Strategies for Reaching Underserved Communities, we further explain how we will use social media and other outreach practices to communicate with underserved taxpayers and address specific community needs. 23 Traditional and Simplified. Internal Revenue Service | Taxpayer First Act 54 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.5 PROACTIVE OUTREACH AND EDUCATION Historically, communicating tax information effectively through standardized correspondence and notices has presented challenges. With the passage of the Plain Writing Act in 2010, the IRS began reviewing and streamlining our correspondence process to restyle and coordinate notices, expedite approvals, simplify language and improve taxpayer responses. We have already taken steps to improve taxpayer correspondence by convening a Correspondence Summit and developing a Taxpayer Correspondence Strategy to define challenges and identify opportunities for improvement. Our research suggests that placement of information, color, font, type and spatial design affects the readers’ ability to understand and respond to key information in notices and letters. Using evidenced-based approaches, we will design easy-to-understand correspondence to help taxpayers meet their tax obligations. With Proactive Outreach and Education, the IRS can get the right information to the right taxpayer at the time they need it. Internal Revenue Service | Taxpayer First Act 55 PROACTIVE OUTREACH AND EDUCATION The following page outlines the goals, objectives, taxpayer benefits, timeline, costs and measures associated with Proactive Outreach and Education. GOALS Understand, Inform and Educate Taxpayers; Provide a Seamless Experience VALUE FOR THE TAXPAYER Efficient and effective communications Quicker access to information and resolution of issues Plain language information and communications through a variety of channels and methods in a variety of languages OBJECTIVES Provide Clear and Timely Communications Understand Taxpayer Needs Better understanding of tax obligations for communities and underserved populations Increased availability and accessibility for underserved taxpayers and community members Personalized notifications about changes Build Trusting Relationships and Partnerships to tax situations to assist them in meeting Simplify the Tax Process More trusting relationship with IRS Internal Revenue Service | Taxpayer First Act their tax obligations and goals 56 Proactive Outreach and Education Timeline and Measures Personalized Tax Updates FY2021-2022 FY2023-2025 FY2026-2030 1-2 years 3-5 years 10 years • Provide taxpayers with information to open online accounts • Provide personalized notifications about changes to their tax situation, filing reminders or status updates for refunds, audits, and payments • Leverage tax data to notify taxpayers about specific campaigns or upcoming changes impacting them • Deliver information and education through additional social media platforms based on topics specific to taxpayer demographics or businesses • Capture data and analytic points for social media demographics information • Expand social media platforms to attract additional viewers • Analyze data to determine language translations needed for specific notices and letters • Translate notices and letters based on data analytics for specific taxpayers for whom English is not their primary language • Expand updates to two-way communication. Social Media Strategy Simplify and Improve Notices and Correspondence Plain Language Communications • Use evidenced-based approaches to design easy-tounderstand correspondence to help taxpayers meet their tax obligations e.g. research suggests that placement of information, color, font, type, and spatial design impacts the readers’ ability to understand and respond to key information in notices and letters STRATEGIC GOAL OBJECTIVE Understand, Inform and Educate the Taxpayer Provide Clear and Timely Communications 24 TIER Impact WHAT WE ARE TRYING TO MEASURE MEASURE/ INDICATOR BASELINE24 TARGET/ PROJECTION Effectiveness of communications Conduct 3 - 5 studies to assess how improved and increased social media presence impact taxpayer behavior Develop and test measures in FY2021, baseline in FY2022, and set target/ projection for FY2023 Develop and test measures in FY2021; Baseline in FY2022, and set target/ projection for FY2023 Baselines are as of the beginning of FY19 unless otherwise noted. Internal Revenue Service | Taxpayer First Act 57 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.6 COMMUNITY OF PARTNERS The IRS has many longstanding and successful partnerships with external stakeholders including tax professional associations, community-based organizations, other government agencies, and advisory and industry groups in addition to our cross-functional collaboration supporting bureaus across Treasury. As we build upon existing relationships and seek new partners, we are creating a sustainable Community of Partners to explore innovative ways to improve service and lessen taxpayer burden. Expanding our partnerships will help us reach underserved communities, which is discussed further in the next Section of this report. Our Community of Partners will focus on the following key capabilities— • Building and Expanding Trusted Stakeholder Network: Use existing partnerships and develop new ones to improve information-sharing between organizations and collaborate on solving common problems. • Leveraging Community Outreach Best Practices: Work with our partners to benefit from their experience in developing community partnerships, such as joining with other agencies to learn how they access hard-to-reach communities. • Co-Locating Federal Government Services: Partner with other federal agencies to allow the IRS to provide co-located services (for example, post offices, U.S. embassies, etc.). These partnerships could apply to both service and compliance interactions. • Expanding Community Presence: Cultivate trusted relationships with local leaders, community centers, cultural and faith communities and organizations and chambers of commerce to help us provide outreach, education and other services. This collaboration will also help us better reach populations that may be underserved or under-represented. • Data Sharing Opportunities: Ensure secure and authorized information-sharing with federal and state agencies, Security Summit25 participants, and other third parties within the boundaries of the established law to allow us to incorporate new sources of information from a secure network to drive enforcement decisions, combat identify theft and improve the taxpayer experience. Our Security Summit Initiative is a unique partnership between the IRS, state revenue departments and private-sector tax industry leaders. It is the first public-private partnership of its kind with the goal of putting new and innovative safeguards in place to protect taxpayer information and the integrity of the Federal and state tax systems. 25 Internal Revenue Service | Taxpayer First Act 58 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.6 COMMUNITY OF PARTNERS This approach to partnerships proved effective during the implementation of recent legislation, including the Tax Cuts and Jobs Act, Public Law No. 115-97. In these instances, the IRS facilitated forums with external groups to obtain valuable input from a cross-section of stakeholders. These helpful sessions demonstrated the benefits of institutionalizing the concept of a Community of Partners. The agency must continue to build its trusted partner network in new and creative ways, enhancing the power of bringing individuals or groups to the table to solve a common problem. —IRS Employee This past spring and summer, the IRS conducted a sweeping outreach and education campaign. In April 2020, the IRS met with 175 representatives from 25 government agencies about Economic Impact Payments established by the Coronavirus Aid, Relief and Economic Security (CARES) Act, Public Law No. 116-136. During this meeting, the IRS discussed payment procedures and how to reach specific audiences in need. Stakeholder participants included the Treasury Financial Literacy and Education Commission, the Department of Health and Human Services, and the Department of Housing and Urban Development. The Consumer Financial Protection Bureau shared information about scams and identity theft. The IRS also shared information about Economic Impact Payments with an additional 34 federal agencies, 35 state governments, 27 local governments and with over 200 public service agencies, including 324 Indian tribal leaders from around the country. These efforts continued throughout 2020, with IRS outreach efforts expanding, building on a network of thousands of partners across the country, inside and outside of the tax community. Agency efforts included working with state and local governments, Congressional offices, as well as many local nonprofit groups and social service agencies. Many citizens with no tax filing requirement were eligible to receive an Economic Impact Payment by using the IRS.gov Non-Filers’ tool and we engaged our partnership network to assist us with reaching these individuals. For example, the IRS worked with more than 350 local and national organizations to share information about Economic Impact Payments specifically focused on those experiencing homelessness as well as seniors and veterans. These efforts were supplemented with proactive campaigns in traditional and social media as well as specially designed toolkits for use by IRS partners. The CARES Act passed on March 27. Within 14 days taxpayers started seeing Economic Impact Payments in their bank accounts. By the end of July, IRS delivered approximately 160 million payments totaling nearly $270 billion. Internal Revenue Service | Taxpayer First Act 59 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.6 COMMUNITY OF PARTNERS Following are a few additional examples of this approach: • • • • Co-location with Social Security Administration (SSA) offices: Since January 2017, the IRS and the SSA have worked together to jointly provide taxpayers access to information and assistance. The co-location of IRS employees in SSA offices began with four SSA locations hosting IRS employees. IRS currently has Taxpayer Assistance Centers (TAC) employees in six SSA offices. IRS employees provide TAC services from SSA sites, including face-to-face meetings with taxpayers using the appointment system. The IRS and SSA also collaborate on anti-fraud initiatives. SSA and IRS held multiple meetings in the past year to discuss anti-fraud best practices. Leaders from both agencies partnered to devise a plan to determine the best way to exchange data and best practices. The IRS will continue to expand this service channel as part of our Taxpayer Experience Strategy. Community outreach best practices with the Department of Education (ED): The IRS partnered with the ED White House Initiative on Historically Black Colleges and Universities (HBCUs) to expand our Volunteer Income Tax Assistance program on HBCU campuses and in some cases, the surrounding communities. Through this program, volunteers prepare thousands of tax returns each year. Expanded community presence through the Department of Veterans Affairs (VA): The IRS has partnered with the VA since 2002 to provide outreach and free tax preparation at VA centers. Our shared goal is to ensure all veterans can easily access our services. The IRS currently has six sites at VA locations. Security Summit with States and Private Sector: The Security Summit is an unprecedented partnership that includes the IRS, states and the private sector. Between 2015 and 2019, the number of taxpayers reporting they were victims of identity theft fell 80%. The IRS protected a combined $26 billion in fraudulent refunds by stopping confirmed identity theft returns. As we got better at blocking returns from entering our systems, the number of confirmed identity theft returns declined to the point where in 2019 it was 68% below 2015. These amplified efforts will bring together partners from across the tax community and the Federal Government to improve access to our services, reach diverse communities and drive innovative ways to improve the taxpayer experience. Internal Revenue Service | Taxpayer First Act 60 COMMUNITY OF PARTNERS The following page outlines the goals, objectives, taxpayer benefits, timeline, costs and measures associated with Community of Partners. GOALS VALUE FOR THE TAXPAYER Understand, Inform and Educate Taxpayers; Provide a Seamless Taxpayer Experience Improved relationship between agency, partners, stakeholders and taxpayers OBJECTIVES Increased ability to file complete and accurate return Build Trusting Relationships and Partnerships Expanded access to information Enhanced and improved filing experience Increased ability to voluntarily comply with tax laws Expanded service channels and partners Provide Clear and imely ommunication Customized interaction assistance Simplify the Tax Process Decreased taxpayer burden Understand Taxpayer Needs Internal Revenue Service | Taxpayer First Act 61 Community of Partners Timeline and Measures Build and Expanding Trusted Stakeholder Network Leverage Community Outreach Best Practices FY2021-2022 FY2023-2025 1-2 years 3-5 years FY2026-2030 10 years • Begin network design • Establish agency/stakeholder relationships • Develop/implement strategic plan • Baseline critical taxpayer needs in relevant taxpayer groups and underserved communities • Design outreach programs and align key partners/stakeholders to assist relevant taxpayer groups and underserved communities • Implement outreach programs and events in key taxpayer groups and underserved communities • Begin annual reassessment of services provided in relation to needs in key taxpayer groups and underserved communities • Continue building andredefining programs to better serve key taxpayer groups and underserved communities • Establish agency/partner working groups to create colocation parameters and ideals • Implementation of service offerings in co-located government services • Continue expansion of colocated services • Establish agency/partner working groups to reach previously underserved taxpayers • Implementation of programs and services in underserved taxpayer populations • Continue building and expanding efforts across additional underserved taxpayer populations • Expand data sharing opportunities with other state/ federal agencies, and other third parties • Establish strong Community of Partners with state/federal agencies, and other third parties where data sharing is governed and formalized • Continue expansion work with other federal/state agencies, and third parties to build Application Programming Interfaces (APIs) where possible Co-Located Government Services Expand Community Presence Data Sharing Opportunities STRATEGIC GOAL OBJECTIVE TIER Access Understand, Inform and Educate Build Trusting Relationships Adoption Impact 26 WHAT WE ARE TRYING TO MEASURE Total number of new agency collaborations with partners and stakeholders MEASURE/ INDICATOR Number of new partnership forums conducted each year Level of participation in partnership forums Participation in partnership forums Increase in taxpayer satisfaction with IRS Level of satisfaction with service received through partnerships BASELINE26 TARGET/ PROJECTION Develop and test measure in FY2021, baseline in FY2022, and set target/ projection for FY2023 Develop and test measure in FY2021, baseline in FY2022, and set target/ projection for FY2023 Develop and test measure in FY2021, baseline in FY2022, and set target/ projection for FY2023 Develop and test measure in FY2021, baseline in FY2022, and set target/ projection for FY2023 Develop and test measure in FY2021, baseline in FY2022, and set target/ projection for FY2023 Develop and test measure in FY2021, baseline in FY2022, and set target/ projection for FY2023 Our Baselines are as of the beginning of the FY2019 unless otherwise noted. Internal Revenue Service | Taxpayer First Act 62 4.0 | TAXPAYER EXPERIENCE STRATEGY 4.7 FOCUSED STRATEGIES FOR REACHING UNDERSERVED COMMUNITIES Our focused program for underserved communities will unify existing IRS efforts and involve our Community of Partners to further address issues of communication, education, transparency, trust, and limited access to high-quality products and services, including lack of access to digital resources. We need a focused approach as some segments of the taxpayer populat [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A1837699a27f4090d. Public record. Not legal advice.