Summary: During the 1997 tax filing season, the Internal Revenue Service (IRS) substantially improved its performance in two areas of importance to taxpayers. First, telephone accessibility increased from 20 to 51 percent during 1997. IRS was able to answer more telephone calls because it assigned more staff to do so and changed its procedures for answering questions on more complex tax matters. Second, the number of tax returns filed by alternative methods increased by 25 percent, with returns filed by telephone rising 65 percent. In another major change during the 1997 filing season, IRS began treating missing or incorrect Social Security numbers on returns as math errors rather than as issues that, in the past, had to be resolved through a lengthy notice process. According to IRS, the agency protected about $1.46 billion in revenue through the disallowance of claimed credits or dependent exemptions in 1997. One issue that continues to concern GAO is the cost-effectiveness of IRS' use of lockboxes to process Form 1040 tax payments. Additional information that GAO obtained this year calls into question a key assumption that IRS and the Treasury Department's Financial Management Service have used to calculate the interest cost savings associated with the use of lockboxes.
