Why the IRS needs a new accountability program

Restoring trust in government hinges on transforming the experience citizens have with it. Two federal High Impact Service Providers are undergoing major transformations, both making significant strides in the right direction. Their overall success may hinge on how they put data to use to monitor change and target areas for improvement.

The IRS's transformation efforts focus on modernizing its operations, enhancing taxpayer services, and improving overall efficiency. These efforts are part of a broader strategy to rebuild public trust and ensure more effective tax administration. A key initiative is the introduction of Direct File, allowing taxpayers to file their taxes directly through the IRS website. This move is intended to simplify the tax filing process, making it more accessible and cost-effective for millions of Americans. 

Additionally, the IRS is upgrading outdated technology systems, improving cybersecurity measures, and expanding digital services to further streamline the filing process. The agency is also increasing enforcement capabilities to ensure compliance, particularly among high-income earners and large corporations. Moreover, the IRS is working to enhance customer service by hiring more staff, reducing response times, and improving the overall taxpayer experience. These changes are designed to make the IRS more responsive, transparent, and efficient in its mission to collect revenue and enforce tax laws.

Similarly, the Social Security Administration's transformation is focused on modernizing its operations, enhancing service delivery, and improving the customer and employee experience. These initiatives are driven by the need to address challenges such as aging technology infrastructure, increasing demands from a growing beneficiary population, and the need for greater efficiency in processing claims. Key efforts include upgrading the agency's IT systems to improve reliability and security, expanding online services to allow beneficiaries to manage their accounts and access information more easily, and streamlining the application and claims processes to reduce wait times. 

The SSA is also focused on improving customer service by hiring additional staff and providing more training to ensure that beneficiaries receive timely and accurate information. Additionally, there is an emphasis on ensuring program integrity by enhancing fraud detection and prevention measures. These efforts aim to create a more responsive, accessible, and efficient SSA, better equipped to serve the needs of current and future beneficiaries.

Both agencies are led by individuals with the management experience and prowess to tackle the formidable tasks before them. IRS Commissioner Danny Werfel brings extensive management experience, having previously served as Acting Commissioner of the IRS and Controller of the Office of Management and Budget, where he successfully led large-scale federal initiatives and reforms, making him well-equipped to lead the IRS's transformation. SSA Commissioner Martin O'Malley, with a proven track record in public administration as governor of Maryland and mayor of Baltimore, implemented data-driven management practices and led major reforms, equipping him with the experience needed to lead the SSA’s transformation.

Drawing on those successes, Commissioner O’Malley launched SecurityStat within weeks of joining the SSA. Inspired by the "Stat" programs he implemented in Baltimore and Maryland that employed data to drive government performance and accountability, SecurityStat uses real-time data and analytics to monitor key performance metrics such as processing time for benefits, identify areas for improvement, and guide decision-making. 

The system involves bimonthly meetings that include all relevant agency decision-makers, fostering a collaborative and transparent approach to addressing operational challenges. Outsiders, including stakeholders in Congress and at the Office of Management and Budget, often participate in SecurityStat meetings. By tracking progress on critical goals and promoting a culture of transparency and continuous improvement, SecurityStat aims to accelerate improvements in the efficiency and responsiveness of the SSA in serving beneficiaries.

IRS — along with all HISPs — would benefit from following the SSA’s lead. Numerous initiatives are underway at the IRS to improve taxpayer service delivery. Yet the IRS lacks enterprise-wide monitoring and visibility into these initiatives, as well as the structure to track and hold the organization accountable for its critical goals. 

The IRS has a framework for measuring various aspects of performance. The IRS Balanced Performance Measurement System details the scope, purpose, and operations of how the IRS collects and reports performance metrics. But simply collecting measures isn’t the same as a dedicated and defined process for regularly reviewing them, identifying actions and tracking completion. SecurityStat makes this possible.

The Inflation Reduction Act, as amended, provides the IRS with approximately $60 billion in funding over the next decade to support how to revolutionize taxpayer services (the SSA hasn’t been so lucky in securing appropriations to keep pace with demand). The IRS should adopt a SecurityStat-like system to ensure that the billions being invested in transforming taxpayer experience are achieving their intended goals. Without such a program, some of the most ambitious goals of the IRS (and Congress) may fall short. 

We’ll give them a head start — let’s call it TaxStat.