CS-08-102 - Supporting Statement

OMB SUPPORTING STATEMENT

FOR THE STUDY TO MEASURE SATISFACTION OF TAX PROFESSIONALS

FOR IRS SMALL BUSINESS/SELF-EMPLOYED CUSTOMERS

September 2008 – December 2009

Introduction

IRS has replaced its traditional measures of accomplishment with a balanced measurement system consisting of business results, customer satisfaction, and employee satisfaction. IRS currently has twelve transactional surveys involving Small Business and Self-Employed customers (ACS, Adjustments, Automated Underreporter, Field Collection, Compliance Services Collection Operations, Field Examination, Excise Tax, Employment Tax, Estate and Gift Tax, Compliance Center Examination, Practitioner Priority Service (PPS), and Toll-Free). These surveys concentrate primarily on the post-filing aspect of the customer’s experience and focus on those who have had an interaction with the IRS to resolve an issue. While the Toll-Free operation does deal with pre-filing and filing concerns, it does so reactively: the customer takes the initiative because of a problem issue or question they have, and the Toll-Free assistors respond as best they can. Only one of these surveys directly addresses the experience of tax professionals as customers -- Practitioner Priority Service [PPS] – whose results may represent the experience of tax professionals who call PPS (especially on accounts-related matters) but is not representative of the entire tax professional population nor of their broader experience of dealing with SB/SE.

In 2003 SB/SE and PCG conducted the first customer base survey and learned that 87% of SB/SE taxpayers use a tax professional and that the tax professional experience significantly differs from the taxpayer experience. These findings demonstrate how critical it is for SB/SE to have a thorough understanding of tax professionals and their experience with the IRS. The Taxpayer Education and Communication (TEC) organization within SB/SE had commissioned a research program to profile tax professionals, which provides rich information about the demographics and attitudes of tax professionals, but there is no other current comprehensive research that evaluates the tax professional’s experience with the IRS as a customer. In order for SB/SE to make the best decisions possible for setting its customer satisfaction strategy, it is essential that the organization gain a better understanding of the needs and preferences of tax professionals, who handle the vast majority of SB/SE interactions.

SB/SE initiated a Customer Base Survey in FY 2003, surveying Small Business/Self-Employed taxpayers and a small sample of their tax professionals in September and October 2003. In 2004, SB/SE developed and conducted a separate Tax Professional survey. The results of this survey provided SB/SE with its first-ever strategic measure of customer and tax professional satisfaction. It also provided critical information that has helped SB/SE better understand the SB/SE customers’ and tax professionals’ expectations, experiences, and needs – thus, assisting SB/SE leadership in determining a strategic agenda for customer satisfaction improvement. This survey was continued in 2005, 2006, and 2007.

The purpose of this task is for PCG to assist the Small Business and Self-Employed Division in continuing to develop a more thorough understanding of the tax professional experience as a customer. The survey will yield valuable information on SB/SE tax professional behavior patterns, their interactions with the IRS, and fail points in the system. In addition, it will prioritize their needs and preferences and gauge the need for additional pre-filing and filing information to help them avoid problems or errors.

Tax Professional Satisfaction Survey

The survey (attached) will be conducted via a computer-assisted telephone interview. Completion of the survey interview is expected to take approximately eighteen minutes.

The questionnaire was developed based on the questionnaire used in 2007, which incorporated information learned in three telephone focus groups in 2004 with tax professionals whose clients include SB/SE taxpayers, as well as information learned in the surveys conducted from 2004 through 2007. The questionnaire covers the following areas: tax professional experiences with various aspects of the tax system, satisfaction with various aspects of experience, feedback on avoiding problems or errors, and demographics. In addition, space will be provided for suggestions for improvement. The results should facilitate more effective management of SB/SE by:

• Providing insight from the tax professional’s perspective about possible improvements.

• Providing useful input for program evaluation and execution at the programmatic and area office level of service delivery.

Survey scoring for this contract will be based on the Tax professional Satisfaction Survey Score response average to the keystone question – “How satisfied are you with your overall experience with 2007 SBSE taxes?” Questions will utilize a 5-point rating scale, with 1 being very dissatisfied and 5 being very satisfied. All survey responses generated will be confidential. The vendor shall ensure that taxpayers responding to the survey interview are guaranteed anonymity.

Design and Methodology

The computer-assisted telephone survey will be based upon a sample of 3,000 tax professionals. The sample will include 2,167 tax professionals from a purchased Dun and Bradstreet list, 333 from an IRS CAF list of Enrolled Agents, and 500 from an IRS CAF list of unenrolled tax preparers. Screening questions will include only those tax professionals who have filed at least 25 returns for tax year 2007, with at least 50% of those SB/SE returns, and at least 10 business returns (Forms 1120, 1120S, or 1065). The data collection contractor will order the sample into replicates to maximize the response rate.

A response rate of 60% will yield a total of 1,800 completed surveys: 1,300 from the D&B list, 200 Enrolled Agents from the CAF list, and 300 unenrolled tax preparers from the CAF list.

Data Collection Timeframe

The vendor will administer the survey by telephone from November 2008 through February 2009.

Who is conducting research

Pacific Consulting Group (PCG) and its sub-contractor Pacific Market Research (PMR) will conduct this research. PMR will conduct data collection at their Seattle facility. PCG will oversee the pre-test, data collection, and produce all reports

Testing structure/design

PCG/PMR will conduct two types of questionnaire testing. First, PCG/PMR will check the internal consistency of the questionnaire, including all branching and drill-down. Second, PCG/PMR will also conduct a field test of the questionnaire, with a minimum of 25 completed responses, to ensure: 1) correct CATI programming; 2) good questionnaire flow and logic based on the ease of the respondent being able to follow the questioning; 3) clarity of the questions and rating scales for the respondents and an interviewer debriefing each night of pre-testing. Based on the test, PCG will make necessary changes approved/requested by SBSE.

Maximizing Response Rates

Standard procedures will be used in order to obtain the highest response rate possible for the phone survey. These will include: 1) an advance letter about the survey; 2) the initial phone call with an explanation of the survey, its importance, and the confidentiality for the respondent; and 3) up to six callbacks for those who do not answer the phone (e.g., answering machines, busy signals, forwarding number). Taxpayers who refuse to participate will not receive any additional calls. Interviewers will go through study-related training, part of this training will be teaching them refusal avoidance and refusal conversion techniques.

Stipend

No payment or gift will be provided to respondents.

Reporting

PCG will provide a draft report by April 14, 2009, which will include survey results and recommendations. A month after the delivery of the draft report, the vendor will produce a final report. PCG will include any relevant database variables in the analysis and will weight the survey responses as necessary to reflect accurately the entire customer base.

Evaluation

For the report of survey findings, PCG will use basic and advanced statistical techniques including, but not limited to, analysis of variance and the prioritization of improvement priorities using PCG’s established technique.

• Survey counts and overall response rate.

• The overall level of tax professional satisfaction with services provided by SB/SE.

• The averages and frequencies for all ratings questions.

• The differences in satisfaction ratings and attitudes across customer segments.

• Which areas of service, in priority order, SBSE should focus its resources to improve overall satisfaction.

• Cross tabulations of variables for the tax professional surveys.

• Analysis of the relationship between survey responses.

• Analysis of the one open-ended question for improvement suggestions

• Analysis of other open-ended questions.

Efforts to Avoid Duplicating Research

This is the only survey that provides quantitative and qualitative data on the pre-filing and filing process for tax professionals for small business and self employed tax professionals. Little, if any, duplication exists, as no similar information is collected by SBSE in the other customer satisfaction surveys and tax professional attitude surveys currently in use.

Privacy, Security, Disclosure, Confidentiality

The IRS will ensure compliance with Taxpayer Bill of Rights II. All participants will be treated fairly and appropriately.

We will limit and control the amount of information we collect to those items that are necessary to accomplish the research questions.  The security of the data used in this project and the privacy of participants will be carefully safeguarded at all times. Security requirements are based on the Computer Security Act of 1987 and Office of Management and Budget Circular A-130, Appendices A7B. Physical security measures include a locked, secure office. Audiotapes are stored in locked cabinets. Transcription of audiotapes are stored in locked cabinets or shredded. Data security at the C-2 level is accomplished via the Windows NT operating system. Systems are password protected, users profiled for authorized use, and individual audit trails generated and reviewed periodically.

The IRS will apply and meet fair information and record-keeping practices to ensure privacy protection of all participants. This includes criterion for disclosure—laid out in the Privacy Act of 1974, the Freedom of Information Act, and Section 6103 of the Internal Revenue Code—all of which provide for the protection of taxpayer information as well as its release to authorized recipients.

Confidentiality will be safeguarded. During the data collection process, participants will not be identified to IRS personnel. In addition, no participant names will be mentioned in the reports or data files. Participants will be advised if comments will be audiotaped. Confidentiality is assured by virtue of agency policy. The terms of IRS’s contract with Pacific Consulting Group requires that the confidentiality of any data be maintained.

Participants will also be given the OMB Control number for this collection, 1545-1432, and an address for directing comments. The address is:

Internal Revenue Service

Tax Products Coordinating Committee
SE:W:CAR:MP:T:T:SP
1111 Constitution Ave. NW
Washington, DC 20224

Estimates of the Burden of Data Collection

The survey interview has been designed to minimize burden on the taxpayer. The time that a respondent takes to complete the survey has been carefully considered and only the most important areas are being surveyed. The average time of survey completion is expected to be 18 minutes. The advance letters will take about 2 minutes to read and understand.

We have made every attempt in designing this survey to maximize response rate. Using the response rate of 60 percent, the total burden in hours is estimated to be 669 hours broken down as follows:

Survey Respondents: 600 hours (1,800 surveys X 20 minutes (18 minutes for the survey plus 2 minutes for reading advance letters) / 60 minutes).

Survey non-respondents: 60 hours (1,200 surveys X 3 minutes (1 minute for survey refusal plus 2 minutes for reading advance letters)/ 60 minutes).

Pre-test respondents: 8 hours (25 surveys X 18 minutes / 60 minutes). The pre-test will have no advance letter.

Pre-test non-respondents: less than one hour (17 surveys X 1 minute / 60 minutes).

The grand total is estimated to be 669 hours.

The dollar amount for the 2008 Tax Professional Survey is $350,766.00.

Other Information

The following information will be provided to the Statistics of Income Division (SOI) within 90 days after the close of the survey data collection operations:

• Findings: A brief summary of significant findings that were evidenced in the results.

• Actions taken or lessons learned: A brief summary of any action taken or lessons learned as a result of the findings.

• Number of completed questionnaires

Statistical Contact

For questions regarding the study or questionnaire design or the statistical methodology, contact:

Beruria Novich

Pacific Consulting Group

399 Sherman Avenue, Suite 1

Palo Alto, California 94306

(650) 327-8108

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