GAO report flags IRS gaps in measuring taxpayer service benefits

The Government Accountability Office's latest report finds the Internal Revenue Service does not systematically measure many benefits of its taxpayer services, limiting the agency's ability to base budget decisions on those outcomes. The report notes that while the IRS tracks potential revenue gains, it has not quantified other advantages such as customer satisfaction or reduced taxpayer burden.

In 2024 the IRS began a research effort to link service costs with revenue effects, but officials said the effort will not examine data on satisfaction or burden unless future priorities change. Earlier IRS reports in 2007 and 2008 made similar calls for more analysis, yet GAO identified only five IRS studies that linked services to compliance or satisfaction, including a 2013 study that linked low satisfaction to non-compliance.

GAO also reviewed international experience, citing 12 studies from other national tax administrations that reported positive associations between customer-oriented services and benefits. Two of those studies - one in Belgium and one in Germany - found that such approaches lowered compliance costs for business taxpayers.

The review is framed by the Inflation Reduction Act of 2022, which provided funding for the IRS to improve tax administration, including taxpayer services. GAO's oversight role under the Act includes assessing how those funds are used and whether the agency can capture the full range of service benefits.

GAO recommends that the IRS develop the staffing, funding, and methodological capacity needed for long-term measurement of both revenue and non-revenue outcomes, so future investment decisions can reflect the full value of taxpayer services.