I referenced the movie Groundhog Day in an earlier post about Appeals employees and the inability of those employees to judge litigating hazards because they rarely, if ever, go to court or follow through with the evidentiary issues presented in their cases. Because they do not get appropriate feedback on their decisions, they relive decisions over and over thinking that they must have made the correct decision the last time they faced the problem. The reference to Groundhog Day in this context reflects my interpretation of this phenomenon as one in which the Appeals Officers, like Bill Murray in the movie, repeat the same actions over and over and coming to an awareness of the problem takes a long time because of inadequate feedback. I bring the movie up again 18 months later to argue for a change in culture at the IRS broadly to create a basis for its employees to see the impact of their decisions in order for the information about the impact to inform their judgment in later cases. Trying to change the culture on a subject like this no doubt comes from the same hubris that compels me and other attorneys to file motions for reconsideration; however, the topic deserves another shot so I apologize to those of you who read my earlier discussion on which I base these comments. In today’s post I write more broadly about providing feedback than just about Appeals Officers. This does not mean I think that things have changed in Appeals since I wrote on this before but simply that the concept of feedback could apply across many parts of the IRS (and many other organizations as well).read more...
One advantage that practitioners have in looking at problems involving tax procedure is that in many instances, though certainly not all, the practitioner will represent the client through the entire process of working with the IRS to resolve a problem. The practitioner will work with the client in the audit, in the appeal, in Tax Court and in collection until the matter comes to an end or, sometimes, until the client comes to the end of their resources. While not every practitioner will follow every controversy case from beginning to end, at the IRS the system certainly does not allow the employees to follow the case from beginning to end. Each employee encountered along the way of the life of a controversy case has a discreet function that may have no, or little, relationship to the function of the other employees engaged in the process. As a consequence, the employee working on a segment of the case often has little knowledge of how the decisions they make impact the case as a whole. That is unfortunate.
I think the IRS needs to build into its training and employee evaluation some component that provides the employee with feedback about the downstream actions taken on the cases on which they have worked in order to allow the employees to learn from what happens after they touch a case. In making this suggestion, I realize that it could be expensive and that only a small percentage of cases go into litigation or go further downstream from the initial employees working the case. Yet, even though it would cost time and money to establish such a system and even though a high percentage of cases would not result in a change from the position taken at the examination stage, I still think that the benefits to the system outweigh the costs.
On the examination side of this equation, it is interesting to look back to the way the IRS handled cases before the era in which the vast majority of exams occurred through correspondence. At that time each IRS district had a Review Staff. As the examining agents issued their reports, the Review Staff would actually review what the agents had done, fix any problems with the work and provide feedback to the agents. IRS employees working in the Review Staffs were generally not the most beloved by the revenue agents because they caught their mistakes; however, the function of a good review staff, or on the Collection side a good Advisory Unit, was not only to say “Gotcha” but to train the IRS employees who interacted with taxpayers and their representatives.
By moving to Correspondence Examination Units and Automated Collection Sites the IRS gained great efficiencies in the number of cases it could handle per employee but lost almost entirely the benefits of two centers of knowledge and feedback to employees. Treasury Inspector General for Tax Administration (TIGTA) fills a portion of the gap on a broader scale by doing reviews of the IRS in a manner and scope that did not exist 30 years ago but how many IRS employees do you think have ever read a TIGTA report and reflected on how it should impact their interaction with taxpayers and representatives. The Taxpayer Advocate Service collects data on systemic problems through its SAMS system where IRS employees as a group have a misunderstanding of how things should work. The SAMS system and the TIGTA reports, however, provide no information that would assist in training a specific employee about a mistake they have made (once or many times.) The IRS needs some function that looks at the decisions made by individual employees and how those decisions play out downstream so that it can provide meaningful feedback to those employees and their managers in order to effect a change.
As practitioners we have the ability on a small scale to provide feedback that might impact an employees’ future behavior if we take down the employee number of the person with whom we deal and contact their manager when the employee makes a decision or says something that makes no sense. Such an ad hoc system of feedback does not seem satisfactory or efficient. The IRS needs to think about, at level of employee work on taxpayer’s cases, how it can efficiently collect data about the correctness of the employees handling of the case and how it can use the collected data to train its employees on broader issues and individual employees with specific deficiencies.