Modeling the IRS Telephone Taxpayer Information System

The Internal Revenue Service (IRS) toll-free, nationwide telephone system provides prompt tax-information assistance. In 1986, the IRS processed 37.8 million calls from taxpayers at 32 answering sites. This paper documents a critical review of the IRS approach to allocating its staff and equipment. We built a simulation-based model to test various allocation policies for deploying IRS resources. The simulation study included detailed sensitivity analysis on key network variables, and showed the feasibility of modeling a typical IRS location as a multiserver loss/delay queue with retrial and reneging. The second phase of this effort therefore centered around developing a prototype probabilistic model for determining the most effective way of providing service at reasonable levels and at minimum cost. The resulting model allows the IRS to determine from tables the best configuration of people and telephone lines for any expected levels of incoming traffic. In addition, we provided flow balance analyses of the underlying feedback queues that permit the IRS to separate their caller streams into fresh and repeat callers, and thus to estimate actual demand for service.