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IRS Pandemic Response Challenge: How Does Your Firm Compare?

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What You Need to Know

  • The number of telephone assistants increased to 9,606 by September, from 237 in March.
  • In November 2020, 27% of IRS taxpayer assistance centers were still closed.
  • In June 2020, the IRS had a backlog of 11.9 million pieces of unopened mail.

An Internal Revenue Service watchdog agency has published data that insurers, insurance agencies and other private-sector organizations can use to analyze how well they handled the COVID-19 pandemic.

Officials at the Treasury Inspector General for Tax Administration (TIGTA) give pandemic response benchmarking data in a report on the effects of the pandemic on IRS customer service operations.

Like many insurance issuers and insurance marketing operations, the IRS was using brick-and-mortar offices as well as call centers and a website.

Similar to private-sector organizations, the IRS had to revamp its operations to meet pandemic-related social distancing rules. Unlike most private-sector organizations, the IRS has pandemic response and impact statistics that are available on the web.

How Operations Changed

In February 2020, the IRS was serving taxpayers through 237 office-based telephone assistants and 358 brick-and-mortar taxpayer assistance centers, according to TIGTA.

In March, when social distancing rules rolled in, the IRS closed all of the taxpayer assistance centers. It also had to shut down 81 of its 87 toll-free telephone lines because all of its call center locations were closed, TIGTA officials report.

The IRS tried to compensate by increasing the number of telephone assistors and having the telephone assistors work from home.  The IRS had 4,062 telephone assistors working from home in May 2020, and 9,606 working from home in September 2020.

In one case, a contractor was supposed to have 500 work-ready call center agents available on May 15. It did not actually have all of the agents ready until June 5. The contractor also had trouble getting enough of the right equipment together to provide good call quality.

In November, about 27% of the IRS taxpayer assistance centers were still closed.

When the IRS began increasing use of telephone assistors, it faced some of the same kinds of setup challenges that private-sector organizations faced.

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“To enable a telephone assistor to telework, the IRS had to obtain the necessary equipment and train employees,” according to TIGTA. “Employees were also encouraged to complete training and sign telework agreements. The IRS indicated that training can typically be completed in less than a day. However, procuring the necessary equipment and scheduling time for employees to pick up the equipment while being socially distanced was a challenge.”

The IRS also faced another challenge familiar to financial services professionals: a need for contract-free signature options. It temporarily has been allowing the use of digital signatures on some forms that cannot be filed electronically, TIGTA officials write.

Still another challenge the IRS has faced, which may be familiar to some insurers and financial professionals, is reliance on physical fax machines.

In July 2020, the IRS taxpayer assistance centers had about 520 fax machines. The IRS turned off the fax machines while the assistance centers were closed. The IRS set up an Enterprise Digitalization and Case Management Office to shift the IRS to more use of electronic fax systems, which let users receive fax documents through computers, and to modernize the remaining paper processes.

Performance Impact Indicators

TIGTA officials report that all of the pandemic-related disruption did affect IRS performance.

Call Response Time: IRS telephone assistors took an average of 18 minutes to answer phones in September 2020, or about 64% longer than they took a year earlier.

In-Person Help: Because of IRS taxpayer assistance center closings, and moves to require appointments at the centers that reopened, the number of people served through the centers fell 57% in 2020, to 1 million.

Mail: The IRS also had trouble keeping up with mail. It built up a backlog of 1.03 million pieces of unopened mail while the taxpayer assistance centers were closed, and that backlog increased to 11.9 million in June 2020. As of Nov. 14, 2020, the IRS still had a backlog of about 3 million pieces of taxpayer assistance center mail.

(Photo: Allison Bell/ALM)