The Business of Government Hour


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The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

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Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

John Dalrymple interview

Friday, August 3rd, 2001 - 20:00
John Dalrymple
Radio show date: 
Sat, 08/04/2001
Intro text: 
John Dalrymple
Magazine profile: 
Complete transcript: 

Arlington, Virginia

Monday, July 30, 2001

Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the Endowment and our programs by visiting us on the Web at

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation today is with John Dalrymple, commissioner, Wage and Investment Division of the Internal Revenue Service.

Welcome, John.

Mr. Dalrymple: Thank you, it's nice to be here.

Mr. Lawrence: And joining us in our conversation is another PWC partner, Jim Cook (phonetic). Welcome, Jim.

Mr. Cook: Thank you, Paul.

Mr. Lawrence: Well, John, let's begin by talking about the IRS. Most of our listeners know the IRS as a collector and administrator of taxes, but they don't have a true sense of the scope of the IRS. Could you describe some of the other activities of the IRS for our listeners?

Mr. Dalrymple: Well, the IRS actually is comprised of about 115,000 employees during our peak seasons. And, you know, we do everything from sending out the tax packages to people so that they can understand how to file their tax returns to actually processing taxes and then, ultimately, as you said earlier, collecting it and examining returns. We also have a lot of outreach activities that we do that allow us to help taxpayers understand what their obligations are.

So, you know, we really do have a pretty varied operation at the service, other than just collecting taxes.

Mr. Lawrence: What are the skills of the employees of the IRS? Again, I guess my perspective is accountants and examiners, but what other type of folks work here?

Mr. Dalrymple: Well, you know, before I came to work at the IRS, I pretty much thought that was the case, too. I personally do not have an accounting degree, and there's a lot of people here who don't. On the other hand, there are also a lot of people here who do have accounting degrees.

Our revenue agents are all accountants. We have other people who are accountants and we have law degrees, a lot of people with business degrees. I, personally, have an economics degree. We also hire a lot of people who don't have degrees -- work in our submission processing sites and our service centers. So it's a really a very wide divergence of backgrounds and abilities that we hire for, here in the service.

Mr. Cook: John, obviously, there's been a lot of conversation over the years, especially in the last 3 or 4 years, about the fundamental reinvention that's taking place at the IRS, in large part to become a more customer-centric organization. Can you comment a little bit about what that really means in terms of the daily responsibilities of the people at the IRS, what type of impact does that have?

Mr. Dalrymple: Yeah, I think it's -- that's a great question, actually, because, you know, we're actually still dealing with that on a very real-time basis here at the IRS, because everybody has to internalize that to make it actually happen here. And I think from my perspective, it means actually that from now on -- from this point forward, we take into account what our actions -- impact our actions have on our customers.

So for example, if, you know, if we have very long lines for people to get help at our customer-assistance centers -- our tax-assistance centers in the field -- you know, we're trying to figure out ways to make that service faster for our employees. And our telephone sites, you know, if someone can't get in to ask their question, it's pretty difficult for us to serve them. So we're focusing a great deal of attention on increasing our ability to actually have people access our services.

You might think, well, gee, on the compliance side of the house, how does that fit, because, you know, you've got a particular role there, and it's not necessarily a customer-friendly kind of role. But on the other hand, if you think about the experience that people have when they go through those activities, which is some examination or a collection activity, you know, we're actually serving those people to find out, in fact, you know, A, were we professional, were we courteous, what things were important to you in that interaction? And then we're trying to make changes to in fact deliver on those things.

So I guess what I would say is, the main thing people would see if they were, you know, sort of stepping back and trying to compare us from where we -- the way we used to do business to the way we're doing business now and how we see ourselves in the future is, we're listening more to what our customers are telling us, and we're trying to react to that in real time.

And that's easily said; that's very difficult to accomplish.

Mr. Cook: Well, one of the things that I guess is most visible about the reinvention is the new organization structure. And you're the commissioner of the Wage and Investment Division. Maybe you could talk a little bit about what that really means and what the responsibilities are of your division.

Mr. Dalrymple: The Wage and Investment Division -- you know, there's about 40,000 people in the IRS that are in the Wage and Investment Division, give or take a few thousand, depending on which time of the year it is. There's about 116 million taxpayers that the Wage and Investment Division serves. And the whole concept behind the reorganization of the IRS was to segment our businesses. Before, we were set up geographically and any district director -- any location was responsible for all the taxpayers within that geographical area, and so it had broad responsibilities around that taxpayer population.

What we try to do now is segment that so that we're focused much more on segments of the population. So in Wage and Investment, it is my responsibility to actually provide -- to understand and provide the services and the activities, actually, that the public need in order to comply with the tax laws.

So no longer are we -- are we in a situation where our scope is so large that our focus is difficult to attain -- like a laser focused in on the Wage and Investment customer.

Mr. Lawrence: John, tell us about your career.

Mr. Dalrymple: Well, I started with the Internal Revenue Service in 1975. In fact, I just had my 26th anniversary with the IRS a couple weeks ago. I came on as a revenue officer, which is a collection officer with the Internal Revenue Service. My job was literally to collect taxes from people who had failed to respond to notices or our office collection activities in those days, and then they were turned over to revenue officers to collect the money from. And I started here in Washington, D.C. In fact, I was at the old 11th and E Street office -- I'm sorry, the 12th and E Street office, which no longer exists -- it's now part of the Warner building, which has a Pennsylvania Avenue address.

And, you know, I spent a number of years here -- I spent 5 years, actually, as a revenue officer here, and then I took different management positions in the IRS, primarily in collection, until I was selected for the Executive Development Program in 1990. And as an executive in the IRS, I've spent time as an assistant director, district director, in Los Angeles and in Hartford, Connecticut. I've spent time as a district director in St. Paul, Minnesota. I've been the deputy chief operations officer here in the national office and the chief operations officer here in the national office until I became the commissioner of Wage and Investment.

Mr. Lawrence: What's been the attraction of public service?

Mr. Dalrymple: Well, you know, I grew up in the sixties, I got out of high school in 1968, so I guess I was influenced a lot by, you know, John Kennedy in a lot of ways. And there were a whole lot of people in my -- are a lot of people, I suspect, in my age group who grew up really internalizing the whole concept of, you know, asking not what your country can do for you, but what you can do for your country. And also, the whole idea of being able to make change from the inside out. And so that's actually what drew me into government service. That and the fact that, you know, I wanted to get a job.

Mr. Cook: As you described your career, John, obviously, you've been in various positions of leadership for quite a while and in your current position you have some direct involvement in developing some of the future leaders in the IRS. Talk a little bit about what you look for in leaders, and in fact, in particular, when you set up your organization, what did you look for in your key directors and managers, as you positioned them?

Mr. Dalrymple: I looked for people who had vision, first of all, that's important -- very important to me. People who I trust, so trust is a very important thing. And you only get trust by -- through honesty, so I tend to look for people who have built up a long history of being honest and forthright. And then finally, people who have good technical skills in the areas in which they're going to be responsible for.

So if you can find that combination in a person, you know, my -- my sense is to grab onto them and then give them lots and lots of flexibility and room to do their job.

Mr. Lawrence: It's a good time for a break. So stick with us through the break, because when we continue our conversation with John Dalrymple of the IRS, we'll return and ask him about the IRS's efforts to modernize and innovate.

This is The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with John Dalrymple, commissioner, Wage and Investment Division of the Internal Revenue Service. And joining us in our conversation is Jim Cook, another PWC partner.


Mr. Cook: John, throughout the planning and implementation of the reinvention that we talked about in the first segment, I would imagine there was a number of creative and innovative ideas that came up and some that were adopted and some that were -- that were passed on.

What would you say were some of the more innovative ideas that came up and that have been implemented and what type of impact do you believe they've had?

Mr. Dalrymple: Well, I'd say the biggest innovative ideas that came up had to do with establishing two organizations within -- one in small business and one in wage and investment -- that are outward looking -- looking at partnering with different segments in order to further tax compliance. And part of their activity -- well, almost all of their activity is in the pre-filing arena, so that the whole concept of it -- if you can really get people to understand what their responsibilities are and help them comply with the tax law, you'll have a lot fewer compliance activities on the back end. And so each organization, wage and investment and small business, have put, A, quite a few resources into that activity, and frankly, quite a bit of energy, because it's all about training people in things that we haven't done before, and then measuring outcomes that we haven't measured before.

So I would say that's probably the most innovative thing that I've seen out of the reinvention.

Mr. Cook: How well do you think the organization took to that change, because that's a rather significant break from --

Mr. Dalrymple: I think, actually, everyone intuitively knew that that was something that made sense and knew that for a long time. I think, though, that when you're swept up in your day-to-day activity, sometimes it's hard to peel away time and intellectual capacity, actually, to focus enough attention on that sort of thing to come up with a robust way to accomplish it. And what the re-engineering effort that we were going through -- we had enough people and enough capacity offline to actually think this thing through and put a plan in place that looked like we could accomplish it.

And so the old adage, if, you know, sometimes you step away from the things that are right in front of you sometimes, you can get a different perspective on them. And I think that's actually what happened here.

Mr. Lawrence: What are the lessons would you pass along to other government leaders who are dealing with modernization efforts?

Mr. Dalrymple: Well, one of the things I would say is, don't undertake it unless you are fully committed to it, because this really is changing a tire while you're driving a car or living in a house as it's being renovated. It is incredibly difficult. And you still have a mission to accomplish, and so you can't just set aside the work that you have to do.

And we still had to process tax returns, we had filing seasons going on. I mean, it is reasonably celebrated that some of our compliance activities have fallen off. But aside from the reasons behind that, you know, we still had to have a focus on what our responsibilities were, and so you can't undertake something like this unless you really understand the scope of what you're going to do and then be committed to that scope, because if you're not, I think what would happen is, you'd only get partway there, and you'd probably just slide back to what you had before, because it would be easier to do that.

Mr. Lawrence: What does it mean to be fully committed? I mean, how long does it take to think through these things and who all needs to be involved?

Mr. Dalrymple: Well, I think "fully committed" means that you have to have a process in place that will actually help everyone understand -- in your organization -- understand where you're going. And just an example of the way we did this, and I don't think that it has to be replicated for change, but Charles Rizotti (phonetic) actually helped us completely understand that you had to bring a process to do this, because we probably could have thought through this with a very small group of people and sort of instituted this thing top-down. But I don't think it would have worked, because what he helped us understand was that we needed to have a very broad base here.

We have a couple thousand people actually involved in the re-engineering effort. And we brought employees from the lowest-grade employees we have in the organization through executives leading teams that folks were on.

We partnered with our union NTEU to pull this off. And then we used all those people that worked on the teams as ambassadors to go back out and discuss and describe what was going on -- get feedback from the rest of the rank and file, bring that back into the organization so that we could figure out how better to communicate. So when I say that, I mean, it really has to be a process that you buy into that's going to ensure that everybody feels that they at least had an opportunity to be heard in the reorganization. Not everybody's ideas were accepted. But everybody had an opportunity to actually be heard and offer suggestions. And in the end, that's actually what I think helped us tremendously.

And, you know, we're not done yet, so I'd like to declare victory, but it may be a bit too soon for that.

Mr. Cook: Well, that's actually an interesting lead-in to the next question, because the -- I would imagine that many outside of the organization have tended to view the IRS as an organization that's kind of staunchly tied to the old ways of doing things. And you just described a process that engaged a lot of internal people to come up with some new ideas.

Talk a little bit about how you worked with the teams and the individuals that your brought in to get them to start thinking about things in a different way.

Mr. Dalrymple: Well, yeah. I mean, I actually described what we did with the internal folks. We got our internal folks focused on the external activities and our partners and stakeholders that we have to deal with. So as the teams were actually responsible for looking at best practices and finding out, for example, from the Federal of Tax Administrators, you know, how they wanted to interact with the IRS in the future and the AICPA and the bar association and the Chamber of Commerce. I mean, we reached out to, literally, hundreds of stakeholders that we felt had an interest in what we were doing and had an interest in us understanding what their needs were.

And so I think by doing that, our employees then understood how important that was in order to move forward.

Mr. Cook: Got a different perspective. Good.

Mr. Lawrence: It's interesting, you've spoken a lot in terms of modernization right now about the people and the processes. And I would have guessed you would have talked about technology. How have you been using technology in the modernization?

Mr. Dalrymple: Well, I mean, the organizational change was strictly a structural organizational change. And we did it in that fashion, in other words we did it without a dependency on technology for thee purpose of, if there were technology hurdles, it would not affect us reorganizing.

Having said that, our future is tied inextricably to technology improvements. I mean, I think it's reasonably well known that the IRS is tied to some 1960s architectural designs for their technology infrastructure. We're still batch processing tax returns and keeping our data in batch files. No one does that anymore that I know of and nobody, definitely no one does it in the scope that the IRS does it.

It's only been 3 years since we actually started routing telephone calls within our telephone system because prior to that we had stand-alone telephone sites out that handled geographic areas.

We are, without question, in order to make the kinds of inroads in services that we intend to provide to our customers, we have to make some dramatic changes in the way we -- in the technology that underlies that activity.

Mr. Cook: John, in general, what are some of the barriers to innovation, especially using some of the new technologies that you described -- what are some of the barriers you've run into and how have you dealt with them?

Mr. Dalrymple: Well, our size, actually, has been an incredible impediment to anybody that's come in to try to help us figure out how to do things differently. Almost any contractor that's bid on any work for us has always been able to tell you, you know, how they've done things elsewhere before and how it would apply to the Internal Revenue Service, but when they get in here and actually start dealing with the problems because of the scope of the activity that we have -- we have probably one of the world's largest databases. And so clearly that's been an issue.

And so, I would say, actually, that is the biggest hurdle that we have is our size and the complexity of the work that we do has over and over gotten in our way.

Mr. Lawrence: It's a good stopping point. Stay with us through the break. When we continue our conversation with John Dalrymple of the IRS, we'll ask him about his recent recognition by Federal Computer Weekly magazine as a fed 100 executive.

This is The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with John Dalrymple, commissioner, Wage and Investment Division of the Internal Revenue Service. And joining us in our conversation is Jim Cook, another PWC partner.

Well, John, as I mentioned at the exit of the last segment, you were recently recognized by Federal Computer Weekly magazine as one of the Fed 100 executives for 2001, an honor that recognizes your successfully managing the Wage and Investment division.

What are some of the things that you feel were most important in your success leading the organization through this challenge?

Mr. Dalrymple: Well, I'd have to say that, you know, my years in experience -- I'm a long-term employee with the IRS. I mentioned earlier, I have 26 years of experience. And I've also managed a number of different aspects of the operation here at the IRS over that period of time. And then I think, also, you know, listening to customers -- I think that's been incredibly important to me, because that's helped me reframe and rethink a lot of the old attitudes I had about how to do business.

So I guess if I -- I mean those would be the things I would say that helped me to be recognized here.

Mr. Lawrence: Well, let me ask that question about experience. There's a lot of experienced people who aren't successful. So what is it about the experience that has enabled you to succeed?

Mr. Dalrymple: Well, I actually think that the fact -- I'll say my varied experiences, because I've had a lot of different jobs at the IRS. I've lived in, you know, seven different states, and I've had, you know, eight or nine different jobs at the IRS. I've managed -- in the field, I've had the experience of actually having face-to-face activities with taxpayers and I was a collection officer when I started my career. So, you know, I've had the opportunity to sit down across the table from someone who owed taxes and talk about how they were going to satisfy those taxes.

I've also had lots of opportunities to hear feedback from our customers about what they -- what their experiences are -- at lots of different levels in the organization. And so I think that's really what I talk about when I say I've had a lot of experiences.

And I think the other thing is, I've also had the benefit of a lot of people helping me understand what it means to lead people, because leading people isn't always about, you know, pulling out your sword and your shield and marching forward. Most of the time, it's actually listening to the people that you work with and your customers to figure out what the best solutions are.

In fact, every management job I ever had, I've always felt that I learned more from the people who I was so-called managing than they ever learned from me. Now, I don't know that that's actually true or not, but it's definitely the way I felt about it.

Mr. Cook: Well, that's an interesting point, because you've mentioned the people aspect a number of times in the earlier sections. Talk a little bit about what you've done with your division to keep your people involved and to really lead them versus manage them.

Mr. Dalrymple: Yeah, I think what I've done is that I -- I'm out constantly in the field organization. I generally am in the field at least twice a month. And by "the field," I mean I'm at a center, at a call site. I have focus group interviews with employees and managers. I listen in on telephone calls so that I can hear the customer experience. I'll sit down with an examination employee in the center and go -- and literally sit through and work through an examination case. Or I'll listen in on collection calls and work an inventory by myself. I'll go out in the field to one of our tax assistance centers and actually have an experience helping someone across the counter during the filing season or off-filing season.

I mean, that's how I stay in touch with what's going on. And it's also how I stay in touch with what the real experiences our customers and our employees are having. So then when I have an opportunity to make decisions about things, I'm informed by what I've seen and what I've touched. And in addition to that, I have a little more credibility when I make a decision; it doesn't sound like it's the soundest decision by my employees, they tend to give me a little bit of benefit of the doubt, because they know that I understand what their jobs are.

Mr. Lawrence: We understand that the IRS has become a flatter organization in terms of management layers. What kind of benefits and challenges has this presented for the Wage and Investment Division?

Mr. Dalrymple: Well, I mean, the thing that's made the most positive impact, without question, is getting messages out. I mean, anytime you have to filter messages through lots of layers, they get garbled. So the fewer layers there are, the more direct and clear the messages are.

In terms of challenges, the amount of work we have on our plate with a restructured organization, all the re-engineering that we're doing along our business practices and then trying to deliver a whole new IT environment, technologywise, there's a tremendous drain on our management capacity. And so, you know, that layer that we took out was somewhat comfortable in terms of having people available to fill some of the capacity needs that we have. So I mean, it's always -- the glass is only half full or half empty. It's neither full or empty here. So it's not without a bit of strain to lose the management level. But, you know, overall, long-term, I think it will pay big dividends.

Mr. Lawrence: What's the feedback from the staff below the management level that got taken out about the removal of that layer?

Mr. Dalrymple: That's a great question, because we've been actually sitting down and talking to them. Initially, they were pretty concerned that a lot more work was just going to sort of fall on them. And in fact, some work did shift to them, but what we tried to do is also take some other work away from them.

And we're actually still working through that whole activity about what's important to be done, what's not important to be done, what can literally be taken off the table? Also, we're trying to look at pay-banding for our first-line managers so that, in fact, they can be compensated at higher rates for doing more and, frankly, more challenging work than they've done before.

I think overall, they're starting to step into those jobs and appreciate them more. But there's anxiety still.

Mr. Cook: What about the performance aspect of that, with all the changes that you've talked about in flattening the organization? What have you done differently to measure the performance of the management and the staff level below management and make everyone accountable for achieving the new mission?

Mr. Dalrymple: Well, we have a lot of new measures in place. And certainly, we have a balance measures approach in the Internal Revenue Service: employee satisfaction, customer satisfaction, and business results. And even the business results are balanced between a productivity and a quality measure.

And what we're doing, actually, is bringing those measurements as low in the organization as we possibly can with the management information systems that we currently have in place, and making people as responsible as possible for -- on the outcomes there. And frankly, we're pretty embryonic with some of this. Our customer satisfaction measures are really, in terms of our surveys and the -- and our measurement tools are only a couple years old, and we're still understanding a lot of the information we're getting back from them.

And even though we've had an employee satisfaction survey for the last 7 years, we changed it dramatically this year with a new contractor, so -- in fact, almost baselining that activity again this.

So I guess what I'd say is, we have some pretty sound measures in place, and we're driving them down as low as we can in the organization. But they're not as well understood as I'd like them to be. And I also think that it is going to take a little bit of time to ensure we've got the exactly correct -- especially productivity measures out there.

Mr. Lawrence: Adopting some of these new performance measurement systems means dropping some of the other indicators and targets, including collection or lien amounts.

What kind of activities are you undertaking to communicate these changes to folks who were perhaps used to the previous measures?

Mr. Dalrymple: Well, we've actually done a lot around communicating the new balanced-measures approach. All of our first-line managers have -- and employees -- have been through balanced measures training about what it means, what we're going to be measuring in the future, et cetera.

We haven't thrown away all of our old productivity measures by any means. And in fact, many of them are very good measures; they're diagnostic in nature. But they're only numbers, and it's really getting behind those numbers that are important. So for example, no one is -- we're still looking to see how many liens we file. We don't hold individuals responsible for how many liens they file, but corporately look at how many liens were filed, and if the numbers fall off dramatically or increase dramatically, I want to know what's going on to cause that to happen, from an impact on our employees and our customers.

So it is really a matter of the use of the measures as opposed to what the measures are.

Mr. Lawrence: It's time for a break. Stay with us through the break. When we come back, we'll ask John Dalrymple of the IRS how the IRS is preparing its workforce for the future. With all the possible retirements, let's find out if anyone will be left.

This is The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence partner at PricewaterhouseCoopers. And today's conversation is with John Dalrymple, commission, Wage and Investment Division of the Internal Revenue Service. And joining us in our conversation is Jim Cook, another PWC partner.

Mr. Cook: Thanks, Paul. John, let's focus on the future for a minute. One of the things that we're hearing from a lot of agencies is the concern over the future of the workforce. And there's a lot being said about the retirement wave that's coming. Can you talk a little bit about the impact you expect that to have on the IRS and what you're doing to respond to that or mitigate the risk there?

Mr. Dalrymple: Well, there's a couple things going on. First, the IRS was granted quite a bit of flexibility by Congress through the IRS restructuring their format. And it's helped us to actually fill quite a few key executive roles in the IRS. And that's a big help, because we have had a number of people leave the organization. And in addition to that, it's brought in a lot of new ideas to help us move forward.

And I think the second part to that has to do with, you know, how are we going to recruit people into the organization sort of the next generation of IRS folks to come in here? We haven't done a lot of hiring at the IRS, really, in the last 5 or 6 years, primarily because of the budget situation. And we're out -- we're doing a lot of recruiting and hiring this year. And I actually think the recent slowdown in the economy has helped us, actually, in some of our ability to recruit.

And we've been trying to use some best practices in private industry that we've -- that we've seen to have the -- to make sure that we've got recruits with the right aptitudes. In the past, we'd go out and recruit people for our telephone sites, basically, just put out an advertisement and bring in as many people who applied, interview them, and then put them on the telephone. We contracted recently with a couple of search firms to help us determine aptitudes for people for telephone work and we actually got that as a best practice from a couple of pretty successful call centers in private industry.

So, you know, we're doing things a little bit differently than we've done in the past in terms of making sure we got a correct match for the people when they get here -- the jobs we have.

Mr. Lawrence: How about the retention of the workers, especially the technology workers? Does the IRS have any special programs in place to ensure that?

Mr. Dalrymple: We actually have and have had -- and I'm, frankly, no sure what we're doing right now, today, but for a period of time, especially during the Y2K time frame, we were paying stipends up to 25 percent retention bonuses to a lot of our IT folks. And I believe, actually, that those have -- at least some, if not all, of those have expired. But, clearly, if we need to do that, that's something we're going to do.

Mr. Lawrence: Looking at people who may be considering coming into public service, what type of advice would you give to a young person who is considering a career in public service?

Mr. Dalrymple: Well, I'd say, first of all, if you were coming to work for the Internal Revenue Service, that we're looking for people who like a good challenge. We have lots to do here.

I think, also, it's interesting -- and I suspect this is true of many agencies, although I've only worked for the IRS, there's a real feeling of family in these organizations once you come on the job and work. I've been to lots of retirements for different people over my career, and the one thing that people say when they leave the IRS, sometimes they're not all that unhappy about leaving the job that they had and coming to work on Monday mornings, but they're always sad to be leaving the people that they work with.

So -- and I think that's because we do have a difficult job. We oftentimes do have shots taken at us from outside the agency. People don't really understand what we're about. And so it brings -- it brings us, actually, close together, people who are working inside the agency. And I think people who like that kind of environment -- which really is sort of a family kind of an environment -- really do thrive in the IRS.

Mr. Lawrence: What type of skills would a young person need should they be interested in working for the IRS?

Mr. Dalrymple: Well, I think definitely the ability to meet and deal with people is a very primary skill for working in the Internal Revenue service. A good number of our jobs are -- require that kind of activity.

And then, also, being a part of a team. People who can problem-solve with other people do well with the Internal Revenue Service. And, frankly, it's a skill that if you don't have it, you need to develop anyway, because I'm not sure you can be too successful these days without that skill.

So, you know, other than that, I wouldn't tell anybody that, just because you're not an accountant or a tax attorney, not to come to the IRS. I think, frankly, bright people who can deal with other people and who problem-solve in a team environment can work here and have very fruitful careers.

Mr. Cook: What's your vision over the next 5 years for customer service -- when you look out into the future, how do you think the IRS is going to be doing business with taxpayers?

Mr. Dalrymple: Well, first of all, there'll be a lot less reliance on individual compliance activities and a lot more on helping people comply before they get into trouble. I mean, that's clearly going to be the case.

Then, in addition to that, I mean, I do have a vision on how things might work around here in the future. We're going to have an incredible amount of interactive services on the Internet. I mean, I think you'll see virtual offices, literally, online for people. Anything you could do in a walk-in center, you'll be able to do over the Internet.

We're going to have world-class telephone service here. We're really on the threshold of some big things with our telephone service. I mean, clearly, people -- we'll be in 90 -- 95 percent level service ranges. You know, a few seconds hold and wait times. And then very easy, accessible offices to provide the face-to-face services for the people who really need that. So, you know, my perspective is that there's just an incredible amount of new things going to happen in the IRS over the next 10 years.

Mr. Lawrence: What are the implications of that vision on the workforce -- does it have the right skills now, and will this mean more IRS employees?

Mr. Dalrymple: I don't know that it will ever mean more IRS employees. But I think -- what the commissioner has said over and over again is that we'll get more efficient. Our work is ever expanding, but we need to get more efficient so that we maintain the basic employee base that we have now. We're refreshing that base as we get attrition each year, which is important. But that we have -- we will be retraining our employees fairly constantly as new and better approaches deal with taxpayer population evolve here.

We're going to be going from a much less, I'll call it, almost factory environment, if you look at our processing centers, to a much more service-oriented environment for our employees. So we'll have a lot fewer people data entering things off tax returns in the future, because, frankly, most of that will come into us electronically in the 8-to-10 year environment that you asked me about here. And so those employees will migrate into jobs that are, frankly, a lot more interesting and challenging than they have now.

Mr. Lawrence: And how about -- how about in terms of the vision, then, for management? You talk about management saying -- managing the factory versus now the managing these knowledge workers doing these incredibly complex things. How do you see the management skills changing?

Mr. Dalrymple: Well, I think our management skills are going to have to evolve along with the workforce that we have, clearly, again, this whole concept of team environment, as opposed to, you know, managing a group of people who are just doing what you tell them to do.

You're now going to be managing people in an environment where you're going to be team problem-solving and then going out and implementing actions and activities that you, as a team, decided were the right things to do. And that is -- that is a different skill than a lot of people currently have and it is one that we're trying, even as we speak, that's a skill that we're trying to ensure that our management cadre is endowed with.

Mr. Lawrence: How about the general vision for the IRS over the next 10 years? Would you describe customer service? When we think about the IRS 10 years from now, will it be any different?

Mr. Dalrymple: That's pretty difficult to say. You know, our mission -- even though our mission statement -- we changed our mission statement, but our -- you know, the basic mission of the Internal Revenue Service is to collect taxes. That's not going to change.

The reason we're in business is to make sure that people pay their fair share. Now, how they do that, in terms of whether or not you help them understand their responsibilities on the front end so that they voluntarily comply, or whether you have a huge compliance workforce on the back end to go out and make sure they comply, I think is the basic difference what the future looks like and what the past looked like.

Mr. Lawrence: I think that's a great stopping point. John, Jim and I want to thank you very much for spending time with us today. We've had a very interesting conversation.

Mr. Dalrymple: Thank you.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with John Dalrymple, commissioner of Wage and Investment Division of the Internal Revenue Service.

To learn more about our programs and research into new approaches to improving government effectiveness, visit us on the Web at And at this website, you can also get a transcript of today's very interesting conversation.

See you next week.

John Dalrymple interview
John Dalrymple

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