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October 10, 2008
M E M O R A N D U M
TO: IRS Chapter Presidents
RE: IRS and NTEU LMSB Business Improvement Committee
SUMMARY: On September 25, 2008, the IRS and NTEU convened a Large and Medium Small Business (LMSB) Business Improvement Committee (BIC) meeting at NTEU headquarters in Washington, D.C.
On September 25, 2008, NTEU and the IRS met at NTEU headquarters in Washington, DC, to discuss issues of concern relating to the LMSB Division of the IRS. NTEU was represented by Chapter Leaders Frank Heffler (Chapter 47 President); Maria Flack (Chapter 87 President); Jackie Mattox (Chapter 45 Vice President); George Harbort (Chapter 83 President); Joe Napierkowski (Chapter 22 President); and myself. The IRS was represented by Frank Ng, LMSB Commissioner; Paul DeNard, LMSB Deputy Commissioner (Operations); Barry Shott, LMSB Deputy Commissioner (International); Pat Chaback, Industry Director; Charlie Brantley, Industry Director; and Helen Bolton, Director, Management and Finance.
Following opening remarks by LMSB Commissioner Ng and I, the parties discussed the following agenda items: 1) Training, including Employee Recruitment and Retention; 2) MITS issues, including IMS, EOAD, and wireless broadband cards; 3) Specialization; 4) ECDs and Communication; and 5) Employee Engagement and Globalization.
Training and Employee Recruitment and Retention
Helen Bolton began the discussion by stating that LMSB employs approximately 6,000 employees and, from the feedback provided by some of these employees, she is aware that LMSB needs to do a better job of training its employees. Some of the complaints that she hears are that after taking a particular course, employees do not have the opportunity to apply what they have learned and that some materials are too easy and/or no longer relevant. Ms. Bolton stated that LMSB is looking to the private sector and how it trains its employees for guidance and that LMSB anticipates moving entirely to an e-learning environment. LMSB also plans on utilizing more reemployed annuitants to instruct within LMSB.
Following Ms. Bolton’s remarks, I asked Commissioner Ng to consider establishing a Joint Training Committee populated by management and NTEU representatives who would examine all LMSB training protocols and suggest ways in which LMSB training can be improved. I explained why such a committee would be mutually beneficial for bargaining unit employees as well as management, and I underscored the idea that NTEU has an interest in LMSB’s success. The establishment of a joint training committee is an action item that I will pursue with Commissioner Ng, and I will report back to you as developments warrant.
Management also acknowledged that the OJI training program needs improvement and that OJIs are often frustrated because the training that they do coupled with their workloads, often impedes their career advancement. NTEU suggested that LMSB should work with NTEU to offer incentives and recognition to OJIs who participate in the training program.
With respect to recruitment, management stated that it has a hard time finding qualified applicants for GS-12 and GS-13 positions in the locations that need them. Therefore, LMSB is increasing its reliance on interns. Management also noted that 30−35 percent of employees leave LMSB within five years of their hire date and that LMSB was looking into retention strategies such as student loan payoffs and advanced leave. Management acknowledged that they have paid retention bonuses to some management employees, but have yet to pay any retention bonuses to bargaining unit employees. Management noted that LMSB would lose 300 to 350 employees this year due to attrition and that it planned on hiring 112 employees in mid-year 2009. I asked Commissioner Ng to consider paying retention bonuses to bargaining unit employees, and I advised him that NTEU was always available for further discussions and negotiations on this matter.
NTEU also brought up the fact that LMSB job listings set forth on the USAJOBS web site and Career Opportunity Lists (COLs) are often not in sync. We provided several examples of jobs that were posted on the USAJOBS web site that were not on the COLs. Management took our examples and told us that they would follow up on this issue and report back to NTEU.
MITS Issues including Secure E-mail, IMS, EOAD, and Wireless Broadband cards
Management reports that the secure e-mail pilot program is a success and that it will be rolled out more broadly in the future. The secure e-mail program allows Revenue Agents (RAs) and taxpayers to communicate with each other through e-mail. The program’s success is dependent upon taxpayer agreement to the use of e-mail. The initial pilot included 26 participants. It will be rolled out to 200−250 participants in the next phase.
NTEU asked management when IMS 4.0 would be rolled out. NTEU noted that IMS is a significant burden with some employees reporting that it takes up to 25 percent of work time to input information into IMS. NTEU also noted that IMS is often unavailable or under maintenance. Although management acknowledged that IMS was problematic, management maintained that IMS has demonstrated consistent improvement since its rollout and that it continues to improve. A 4.0 version of IMS is “a long way off” as it is competing with other IT projects and is subject to service-wide budget constraints. Management maintained that they have succeeded in reducing the fields that RAs must complete and they will continue to work towards decreasing the fields required to be filled out prior to case closing. Each year management examines the IMS change requests it receives and it prioritizes them. Last year, management received approximately 300 change requests, and it implemented 83 of them. Management brought up the fact that employees can always raise issues concerning IMS to the Business Review Board whose job it is to figure out solutions. Employees can also put in change requests.
With respect to EOAD, management stated that the issue tracking system is still needed because federal/state agreements require that EOAD be maintained.
With respect to wireless broadband cards, NTEU noted that this matter was put on the April 2008 quarterly and that we were still waiting on negotiations. We asked that this initiative be fast tracked and management agreed. I am pleased to report that negotiations concerning the use of broadband cards were scheduled for October 8 and 9, 2008.
Specialization
NTEU made it plain to management that LMSB needed more specialists to help process the 210,000 returns per year in LMSB. Management acknowledged that it needed more specialists and stated that in 2005, 24 percent of new hires were specialists, and. in 2008, 42 percent of new hires were specialists. NTEU stated that without adequate numbers of specialists (e.g., Economists, Appraisers, International Examiners) Revenue Agents were having difficulty meeting ECD dates. Moreover, RAs are not given adequate time to exercise their professional judgment with respect to developing issues and possible adjustments that may result in additional tax revenue.
ECDs and Communications
Management stated that it understood that ECDs were perceived as a problem. The value of ECDs is as a workload planning and coverage tool. Management noted that 60 percent of cases are closed in the last four months of the year. Management also stated that there are multiple opportunities to adjust ECDs throughout the process and that management does adjust them. Moreover, DFOs must document reasons why ECD extensions are not approved. NTEU stated that ECD adjustments are very rare and although employees try to “do the right thing,” often they are frustrated by inelastic ECDs. Moreover, NTEU noted that if ECDs are “moving targets” as stated by management, this message is not being communicated to front line managers.
NTEU also advised management that too many of its communications to employees are inessential and that employees have to spend too much time wading through various LMSB correspondence. Management said that getting the balance right i.e., too much versus too little communication, is difficult but that it was committed to achieving the right balance.
Employee Engagement and Satisfaction
Management presented the results of an employee survey on LMSB engagement and work satisfaction which I have attached for your review. During its presentation of survey results, I told LMSB management that NTEU did not place a lot of faith in the survey or its results. I advised management that employees were unsure that the process was anonymous and recounted how some employees have received e-mail reminders that they had yet to take the survey. I also told management that NTEU had little faith in how management decides that an elevated issue has been “resolved, as NTEU has seen none of these resolved.” I also challenged LMSB to determine whether any of the 41 lowest rated managers had received an award. Finally, I observed that the IRS had paid a private consulting firm to assess its message delivery metrics. The consulting firm concluded that the message from top line management was not reaching its first tier management. I told management that consultation with NTEU on this issue would have saved the IRS a substantial consulting fee.
Globalization
Management stated that globalization is affecting more cases each year. Within the last ten years it has become unusual for a case not to have an international feature. The problem is that there are not enough International Examiners, and the IRS is now trying to train all agents to have a base level of International expertise. Issues such as Transfer Pricing, Intellectual Property, Cost-Sharing, and other complicated issues are appearing more frequently in LMSB. I asked management about increasing the number of GS-14s within LMSB, and management stated that the issue of additional GS-14s has not gone away and that it plans on engaging with NTEU over this issue and it looks forward to “tangible benefits” on this issue in the next quarter.
NTEU is following up on a number of the issues described and will continue to pursue these issues through future BICs or other forums as appropriate.
If you have any questions or comments with respect to these matters, please contact Kevin Fagan, Deputy Director of Negotiations, via e-mail at or at
(202) 572-5500, ext. 7037.
Colleen M. Kelley
National President
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