ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, December 19, 1996 TAG: 9612190044
SECTION: NATIONAL/INTERNATIONAL PAGE: A-13 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
The Internal Revenue Service wasted nearly $5 million this year by paying banks to sort taxpayer checks from returns rather than doing the sorting itself, congressional auditors asserted Wednesday.
Other aspects of the 1996 filing season went more smoothly. For example, the agency answered more telephone calls and delayed fewer refunds.
But the General Accounting Office, Congress' watchdog agency, zeroed in on extra costs in a large-scale IRS experiment to have millions of taxpayers send their checks to postal lockboxes serviced by commercial banks.
The report comes at the end of a rough year for the tax-collection agency. Republican Bob Dole and independent Ross Perot made ``ending the IRS as we know it'' a focus of their presidential campaigns. And the Republican-majority Congress cut its budget for two consecutive years.
Under the lockbox program, the IRS in 1994 and 1995 asked participating filers who owed tax to use two envelopes - one to send their check to a bank-serviced lockbox and the other to send their return to an IRS service center. That allowed faster deposit of payments, decreasing the government's borrowing need and interest expense.
In 1996, the IRS switched to a one-envelope system and paid the banks to sort the returns and ship them to the IRS, reducing the savings from the program. It plans to use the same system in 1997.
IRS spokesman Frank Keith said the agency switched to the one-envelope system because taxpayers found using two envelopes burdensome, but it will continue to evaluate the system. He said the added expense, estimated by the GAO at $4.7 million during the first eight months of 1996, was in the context of an annual budget just over $7 billion.
The GAO said it wasn't convinced the slightly greater convenience for taxpayers of using one envelope justified the extra spending.
Robert Tobias, president of the National Treasury Employees Union, which represents IRS employees, said the union has been arguing the lockbox program was inefficient and costly and was pleased to see its view confirmed.
The GAO reported better news in another area that has earned the IRS severe criticism. It said the IRS answered 20 percent of the calls placed to its toll-free help line, up from 8 percent in 1995.
Telephone service is one of the areas under scrutiny by the National Commission on Restructuring the Internal Revenue Service, a 17-member bipartisan panel due to report in July.
``We should be doing so much better than this,'' said the commission's co-chairman, Rep. Rob Portman, R-Ohio. ``If MasterCard or Visa only answered 20 percent of their calls, they'd be out of business.''
By another measure - looking at callers rather than each individual call attempted - 50 percent of callers eventually got through in 1996, up from 41 percent the previous year.
And the accuracy of the answers continued to be high - 91 percent compared with 90 percent in 1995.
``We think that the '96 filing season was one of the most successful we've ever had,'' Keith said.
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