NTA Blog: Measuring the Taxpayer Experience — External Evaluations Show the IRS is Failing to Provide the Quality of Customer Service Expected by Taxpayers (Part 2 of 2)

By National Taxpayer Advocate Nina E. Olson

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In last week’s blog, I discussed how the Level of Service (LOS) measure used by the IRS paints a misleading picture of the taxpayer experience because it does not fully reflect taxpayers’ ability to speak with a telephone assistor and get the answer they need. The high LOS reported by the IRS masks its weaknesses in providing a high-quality customer experience, and reliance on this measure causes these weaknesses to go unaddressed. Similarly, the IRS reports an impressive overall toll-free customer satisfaction rating of 90 percent for fiscal year 2017; however, the response rate for the survey that is the basis for this measure has been low in previous years, and the measure only accounts for those callers that were able to speak with a telephone assistor. In this week’s blog, we will take a closer look to see how this rating stacks up against external evaluations and to understand the drivers of a successful taxpayer experience communicating with the IRS, regardless of the channel chosen or utilized. We will also examine how the IRS compares to other federal agencies and private sector companies, and identify practices the agency can adopt to prioritize the taxpayer experience.

While the IRS’s internal customer satisfaction results seem to show the agency is meeting the needs and expectations of taxpayers, other external reviews of the IRS’s telephone service performance show the agency is failing to provide taxpayers the quality of service they expect. For example, TAS’s Service Priorities Project Survey showed that almost 40 percent of taxpayers calling the IRS felt their call did not fully resolve their problem. Moreover, the American Customer Satisfaction Index (ACSI) scores agencies based on drivers of customer satisfaction, such as professionalism, efficiency, clarity of information, and accessibility. The ACSI ranks the Treasury Department twelfth out of 13 Federal Departments and says the Treasury Department’s score is effectively an IRS score because “most citizens make use of Treasury services via the [IRS] tax-filing process.”

Similarly, the Forrester Federal Customer Experience Index ranks private sector companies and federal agencies based on a variety of factors that influence the customer experience on a scale from zero to 100. The private sector average score for Customer Experience (CX) is 69, the federal average score is 59, and the IRS’s score is 54 out of 100, which is considered “very poor.” This places the IRS twelfth out of 15 rated agencies, behind the U.S. Postal Service, the U.S. Citizenship and Immigration Services, and the Social Security Administration, among others. In fact, with regard to customer experience, the IRS ranks down there with budget airlines and internet service providers.

Forrester’s CX Index scores are derived from the factors that make a government experience easy, effective, and emotionally engaging. The CX Index showed the IRS inspires a mere 13 percent of taxpayers to seek its expertise, which ranked last among federal agencies, and only 20 percent of taxpayers say that they trust the IRS. Forrester notes, “Just 61 percent of Internal Revenue Service (IRS) customers say that they follow its rules, which shows that not even the threat of jail and fines always outweighs the power of a bad customer experience.”

These results show the IRS is failing to engage with taxpayers and communicate with them effectively, failing to meet taxpayers’ expectations and agency goals. The IRS asserts that taxpayers should “expect the same level of service when dealing with the IRS in the future as they have now from their financial institution or a retailer.” The President’s Management Agenda for 2018specifically notes that federal customers “deserve a customer experience that compares to — or exceeds — that of leading private sector organizations, yet most Federal services lag behind the private sector.” The Agenda references the ACSI and Forrester CX Index, discussed above, as measures of how government agencies provide — or fail to provide — this experience.

To address this shortcoming, the President’s Management Agenda makes providing a modern, streamlined, and responsive customer experience a Cross-Agency Priority goal. Similarly, the House of Representative’s 2018 Financial Services and General Government Appropriations bill requires the IRS to submit a plan to the Committees on Appropriations of the House and Senate exploring “new customer service innovations to deliver quality and timely telephone and written correspondence service to taxpayers.” To meet these goals and bring customer experience to the forefront in agency decisions, the IRS should take the following two steps — 1) create a customer experience dashboard of key performance measures, and 2) designate a Chief Taxpayer Experience Officer.

First, utilizing a customer experience dashboard would allow the IRS to illustrate a complete picture of its taxpayer service performance and to identify trends. It is important for the dashboard to cover every stage of the taxpayer journey. The specific metrics included should reflect measures relied on in the private sector, including the rate of first contact resolution. Metrics should be grouped based on perceptionmetrics that reflect how taxpayers felt about an interaction with the IRS, descriptive metrics indicating what happened in the interaction, and outcome metrics that show what actions taxpayers took because of the interaction. Presenting different metrics grouped together by theme in dashboard format would help the IRS to understand the relationship between the metrics and how to act on them. This sort of dashboard would allow the IRS to get a better handle on the complete taxpayer experience, the drivers of customer satisfaction, and where it needs to focus its efforts. As a starting point for metrics, the IRS could review the Taxpayer Rights Assessment my office publishes in each Annual Report to Congress.

Second, to oversee actions in response to dashboard metrics and foster the development of a seamless, integrated, and responsive omnichannel service environment, the IRS should appoint a Chief Taxpayer Experience Officer at the senior leadership level. Such an officer would serve as a liaison to unify all customer initiatives across different functions. A Chief Taxpayer Experience Officer would provide a voice reflecting taxpayer’s values, priorities, and goals and ensure that senior leadership views decisions through the lens of the taxpayer’s experience. In recent years, the chief experience officer role has become an indispensable part of customer service in the private sector and other government agencies. For example, in the wake of serious scandals involving long wait times and delays in 2014, the Department of Veterans Affairs installed a chief veterans’ experience officer reporting directly to the Secretary to lead the charge of gathering experience insights beyond just operational metrics to improve the agency’s service. While the agency still faces challenges, this change sparked a tremendous turnaround for the agency, and it is now highlighted as a model agency in the Presidential Management Agenda as an example of improved customer service. For the IRS, the appointment of a Chief Taxpayer Experience Officer, reporting directly to the commissioner and interacting with (and cutting through the bureaucracy of) all functions, including technology, would show the agency’s commitment to taxpayer-oriented service and be a step towards improving taxpayer trust.

There is an old adage that “you get what you measure.” The ACSI and Forrester measures are broad measures relied on by the Office of Management and Budget, and they show significant weaknesses and opportunities for the IRS to improve. The IRS’s narrower measures show the agency is performing well and seemingly does not have significant weaknesses in this area that need to be addressed. Based on my experience and TAS’s survey data, taxpayers and their representatives tell a completely different story. Thus, the IRS should reexamine the way it collects and uses data. By evaluating its telephone and other service channels from the perspective of the taxpayer, the IRS will be better able to identify ways to improve the taxpayer’s experience communicating with the IRS and help increase voluntary compliance.

To read more about my recommendations for ways the IRS can improve its telephone service and create an omnichannel service environment, please read: Telephones: The IRS Needs to Modernize the Way It Serves Taxpayers Over the Telephone, Which Should Become an Essential Part of an Omnichannel Customer Service Environment in my 2017 Annual Report to Congress and The IRS’s Failure to Create an Omnichannel Service Environment Restricts Taxpayers’ Ability to Get Assistance Using the Communication Channels That Best Meet Their Needs and Preferences in my Fiscal Year 2019 Objectives Report to Congress.

The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate is appointed by the Secretary of the Treasury and reports to the Commissioner of Internal Revenue. However, the National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.

Read Part 1 of the NTA’s “Measuring the Taxpayer Experience” blog series.