1. The Federal Tax Return Process MBA 8155 Operations Management Matthew Brotherton Anjanee Burns Meenakshi Singh Douglas Tarkington Veronica Thompson

2. The Income Tax Return Process supports the overall strategy of the Internal Revenue Service (IRS) … to collect taxes

3. Background  Demand is the number of individual paper tax returns filed in a year  Supply is a mailed refund check from the IRS  Capacity is measured by how many the IRS can get processed quickly

4. Metrics 2009 FILING SEASON STATISTICS Cumulative through the weeks ending 4/25/08 and 4/24/09 Individual Income Tax Returns20082009% Change Total Receipts139,928,000131,543,000-6.0% Total Processed119,100,000117,014,000-1.8% E-Filing Receipts TOTAL85,606,00090,639,0005.9% Tax Professionals59,444,00059,439,000-0.01% Self-Prepared26,162,00031,200,00019.3% Source: http://www.irs.gov/newsroom/article/0,,id=207293,00.html

5. Performance Measurements Analysis 103,100IRS Employees Total 22,991IRS Wage & Investment Division Employees (22.3% of overall IRS) 7,857IRS Employees who process paper returns (33% of W&I Dept) 117,014,000Total all returns processed by 04/24 26,375,000Total paper returns processed by 04/24 35 Business DaysPeak demand 03/15 to 04/24 12.41Total Returns per person-Hour (94,200 across org) 4.83 minutesCycle Time 14 daysThroughput Time 0.20 per minuteThroughput Rate

7. Issues with Current Process  Lack of Utilization  Buffers at every stage of the process  Hard to track buffer times  Bottlenecks

9. Expected Results  Improve Accountability  Improve Total Quality Management  Lower Cycle Time  Lower Throughput Time  Improve employee morale

10. Recommendations  Promote e-filing more vigorously  Improve Customer Satisfaction  Be Proactive  Eliminate Redundancy

11. Wrap-up  IRS has over 100,000 employees to handle millions of tax returns  The current process has multiple buffers creating a long throughput time  The new process will give the IRS a chance to improve quality and efficiency  No process is perfect

12. Questions