Case Studies: The Internal Revenue Service: Tax Collection for a New Era

Start with the premise that April 15th, tax day in the U.S., can be uncomfortable for many U.S. taxpayers. However, the U.S. Internal Revenue Service (IRS) by and large has fulfilled its mission of "collect[ing] the proper amount of tax," according to the law and without political influence. The agency collects a staggering $2 trillion each year in taxes-more than the total GDP of the United Kingdom and 26 times the rate of its first collection nearly a half-century ago.

Still, when Charles Rossotti became IRS Commissioner in 1997, it was time to revisit that mission. The American public ranked the agency among its least admired institutions. And the U.S. Congress listened to those voices, picking up the call for reform. The IRS Restructuring and Reform Act of 1998 mandated that the agency "provide America's taxpayers top-quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all."

That was the context in which Commissioner Rossotti developed a 15-page vision for the "new" IRS. He selected Booz Allen Hamilton in 1998 to validate his vision for the agency and become its partner for change-a role that Booz Allen accepted by teaming with the IRS to help the agency make the radical transition from a 1950s-style geographic-function matrix to a 21st-century customer-focused enterprise. "This work defines and affects lasting change in one of the largest and most pervasive government agencies in the U.S.," says Vice President John Jones of Booz Allen.