Detailed Information on the
Alcohol and Tobacco Tax and Trade Bureau Collect the Revenue Program Assessment

Program Code 10004100
Program Title Alcohol and Tobacco Tax and Trade Bureau Collect the Revenue Program
Department Name Department of the Treasury
Agency/Bureau Name Alcohol and Tobacco Tax and Trade Bureau
Program Type(s) Regulatory-based Program
Assessment Year 2005
Assessment Rating Effective
Assessment Section Scores
Section Score
Program Purpose & Design 100%
Strategic Planning 89%
Program Management 96%
Program Results/Accountability 89%
Program Funding Level
(in millions)
FY2007 $44
FY2008 $48
FY2009 $49

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments

Developing targets and baselines for new performance measures.

Action taken, but not completed TTB has developed two new outcome-oriented performance measures for the Collect the Revenue program that will be baselined in FY 2008. The first of these two measures report on the level of voluntary compliance of industry members filing tax payments and the second reports on the level of customer satisfaction.

Establish a web-based "Flashboard" that will report TTB service standards, relevant performance measures, and other key bureau information such as workloads, so that stakeholders and customers can easily navigate from summary information to reports and/or other analytics.

Action taken, but not completed The design and implementation for this tool will begin in FY 2009.

Update TTB's web site to enhance search and navigation; improve content and format; redesign TTB.gov homepage; and employ plain language.

Action taken, but not completed

Develop a survey to identify the level of potential risks for non-compliance with internal control standards set by FMFIA and GAO for TTB's Revenue Accounting Service (RAS). The survey will facilitate improvements in mitigating control techniques over the accounting for approximately $15 billion in federal excise tax collections and help ensure organizational goals for "The Collect the Revenue program" are achieved. The RAS is responsible for assuring revenue transactions are recorded timely, accurately, and completely.

Action taken, but not completed Risk survey currently under development, completion expected by June 2009.

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments

Developing baselines for annual performance measures.

Completed TTB completed this part of the improvement plan at the end of FY 2006.

Improving estimates of how funds are distributed across TTB's two lines of business to ensure that funds are obligated in accordance with planned schedules.

Completed TTB currently uses the BDP ARC accounting system, which allows for the allocation and tracking of distribution of funds. This system has now been in service for a full year's data since the PART study. A complete revision of the account code structure has been designed and will be implemented in FY 2008, which captures lines of business, programs, and activitives.

Developing a baseline to compare the incremental costs and net benefits of regulation.

Completed TTB has completed several economic impact studies which provide incremental cost and social net benefits of regulations. TTB has also collected several independent cost/social benefit studies (e.g., economic impact studies) which support TTB's impact study positions.

Collaborating with other state and federal agencies to increase education outreach to regulated taxpayers, in order to increase voluntary compliance in filing tax payments. TTB has formal agreements with the majority of states regarding the sharing of tax information.

Completed TTB continues to promote voluntary compliance through educational outreach on its website and at various tax and regulatory seminars. In June 2008, TTB held its first major conference, the TTB EXPO, an event designed to reach out to industry members, and to state, local, and other federal agencies. Initial participant response was favorable and it is anticipated this event will become an annual outreach effort to promote increased voluntary compliance.

Simplifying tax forms in order to reduce taxpayer burden.

Completed TTB has implemented legislation to reduce the reporting requirements for the small industry member and has developed the eFAPs system which places the forms on-line to help streamline the "process". TTB will be simplifying the forms since all information requested on them is required and necessary.

Program Performance Measures

Term Type  
Long-term Outcome

Measure: Percent of Voluntary Compliance from large taxpayers in filing tax payments timely and accurately (in terms of revenue). (New measure 2008)

Explanation:The percentage of total revenue dollars from large taxpayers (e.g., over $50,000) that file original payments on or before the scheduled due date (without notification of any delinquency).

Year Target Actual
2008 Baseline TBD
2009 TBD
2010 TBD
2011 TBD
2012 TBD
Annual Efficiency

Measure: Amount of revenue collected per program dollar ($) (New data compilation methodology, 2008)

Explanation:This measure represents the amount of federal excise taxes collected divided by the amount of resources expended to collect the taxes. In 2008, the program changed the data compilation method and will update future targets using the new methodology.

Year Target Actual
2005 $323 $270
2006 $294 $323
2007 $294 $323
2008 New baseline
2009 TBD
2010 TBD
Annual Outcome

Measure: National Revenue Center customer service survey results (New measure, added February 2008)

Explanation:The NRC conducts a customer survey to determine satisfaction levels among industry members.?? The survey's primary focus is to assess how well TTB helps applicants obtain a permit for starting a new business. The secondary focus is on claim processing.

Year Target Actual
2008 85% TBD
2009 85%
2010 86%
Long-term Outcome

Measure: Percent of Voluntary Compliance in filing tax payments timely and accurately (in terms of revenue). This measure has been discontinued.

Explanation:This metric measures the percentage of total revenue dollars from all taxpayers that file original payments on or before the scheduled due date (without notification of any delinquency).

Year Target Actual
2003 Baseline 80%
2004 82% 82%
2005 84% 86.3%
2006 86% 87.2%
2007 86% 86%

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score

Is the program purpose clear?

Explanation: The Collect the Revenue program in TTB administers and enforces portions of the Internal Revenue Code (IRC) of 1986, authorizing excise tax collections for alcohol, tobacco, firearms and ammunitions. The code provides TTB the authority to classify, permit and regulate the manufacturers, producers, importers, exporters and users of the alcohol, tobacco, firearms, ammunitions and related industries. TTB also has authority to impose special occupational taxes as they relate to the industries mentioned above, this tax however, has been suspended for the years 2005 through 2008 as per P.L. 108-357.

Evidence: The history of TTBs regulatory responsibility dates back to the creation of US Department of Treasury and the first federal taxes being levied on distilled spirits in 1791. TTB as an agency, became established in January 2003 as a result of the Homeland Security Act of 2002, which separated TTBs functions from the ATF. See Statement of Authorities and Responsibilities (IRC of 1986, 26 USC(IRC), Ch. 51 (Distilled Spirits, etc), Ch. 52 (Tobacco Products, etc.,) and Sections 4181-4182)) www.ttb.gov/about/statauth.htm-IRC of 1986,etc.

YES 20%

Does the program address a specific and existing problem, interest, or need?

Explanation: The Collect the Revenue program regulates and collects tax from the alcohol, tobacco, and firearms industries which contributes to the Federal government revenues.

Evidence: The Collect the Revenue Program serves an important role as a significant contributor to the Governments overall Collections Program. Specifically, in FY 2004 TTB collected $14.7 billion and processed 400,000 excise tax returns and operational reports. -- a. FY 2006 Congressional Budget submission, pp 2 and 5. See statutes listed previously.

YES 20%

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The TTB Collect the Revenue program has exclusive authority and responsibility for domestic federal excise tax collection and regulatory enforcement of the designated IRC code, as it relates to alchohol, tobacco, firearms and ammunition. The Internal Revenue Code vests in the Secretary of the Treasury the authority to enforce its provision. This authority has been delegated to the Administrator of TTB. No other level of government, federal, state or local duplicates this function. Similiar responsibility is held by the Border Protection bureau however, their tax collection authority is on the international level.

Evidence: The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has separate jurisdiction for certain law enforcement activities that do not involve tax collection. IRS collects non-related excise taxes. States collect State taxes on alcohol, tobacco, firearms and ammunitions but not Federal excise tax. The federal government has not allowed private parties to perform tax collection functions due to the sensitivity of taxpayer information. For this reason, local or private efforts are not used to collect excise tax.

YES 20%

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The programs efficiencies are reflected in the operation of the TTB Revenue Center (NRC)--it monitors each taxpayer and follows up with the taxpayer when taxes are not paid. TTB utilizes tax audits to verify that the amount actually paid is the amount rightfully due. Changes in payment amount and lack of payment are two triggers used in the TTB Risk Model to select taxpayers for audit. The reformation of ATF that created and aligned the new agency with Treasury's Tax and Policy office has provided TTB with a more focused line of communication on regulatory and issues necessary to carry out the collect the revenue mission.

Evidence: TTB along with Pay.gov partner, FMS incorporate teleconferences and face-to-face meetings with an objective of continually improving the system functionality and developing additional services for TTB customers. Tools such as Cashlink are utilized by the Center to retrieve wire transfer information and to put detailed records into the Electronic Wire Transfer table in the FET (Federal Excise Tax) system, this allows for matching of tax returns and later update of returns to show those closed and to post tax liability and payment transactions. The NRC also uses Discoverer software to leverage its existing Oracle database information to automate the tax reconciliation process, report on late payments, missing returns and reports.

YES 20%

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The Collect the Revenue Program is designed to support all taxpayers. The current universe of federal excise taxpayers is 5,200 and 345,000 special occupational taxpayers. TTB utilizes all manner of media to collect the revenue including mail, electronic tax payment systems (Pay.gov), electronic funds transfer (EFT) and lockboxes. Any annual tax liablity over $5 million is required to use the EFT method to remit taxes.

Evidence: TTB provides compliance education to the public through rulings, industry circulars, customer service hotlines, the TTB Website, and regional seminars. Most seminars are specifically industry directed to ensure that the intended beneficiaries are targeted. In 2004, TTB collected $14.7 billion and regulated 5,200, almost 1,700 of the industry members attended TTB seminars. Financial systems are in place to track collections and remit them to the general fund at Treasury.

YES 20%
Section 1 - Program Purpose & Design Score 100%
Section 2 - Strategic Planning
Number Question Answer Score

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has established two long-term outcome measures: Percent of voluntary compliance in filing tax payments timely and accurately (in terms of revenue) and; Percent of voluntary compliance in filing tax payments timely and accurately (in terms of number of compliant members.) These measures align with the TTB Strategic goal to Collect the Revenue: Provide the most effective and efficient system for the collection of all revenue that is rightfully due: eliminate or prevent tax evasion and other criminal conduct; and provide high quality service, while imposing the least regulatory burden. These measures also embody the Treasury strategic goal??Manage the U.S. Government's Finances Effectively: To collect Federal tax revenue when due through a fair and uniform application of the law.

Evidence: Measures 2.1.A.3.a Percent of Voluntary Compliance in filing tax payments (in terms of revenue). TTB intends to increase Voluntary Compliance in terms of revenue from 80% in 2003 to 92% by 2010; and 2.1.A.3b Percentage of Voluntary Compliance (in terms of compliant members)-a newly proposed measured-TTB intends to increase Voluntarily Compliant members from 57% in 2003 to 84% by 2010. TTB has data to support this measure from 2003.

YES 11%

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: TTB has set challenging but realistic targets and timeframes for the Collect the Revenue Programs long term measures. The Voluntary Compliance measures which are 1) by 2010, 92% of the total excise tax payments filed will be received on or before the scheduled due date; and 2) under the Voluntary Compliance members measure, by 2010, 84% of the total taxpayers will file payments on or before the scheduled due date, without notification of any delinquency.

Evidence: TTB anticipates that several key factors will improve voluntary compliance --1) the presence of the auditors from the Tax Audit Division, 2)rewriting of TTB regulations into plain language, 3 )the provision of educational seminars to the industry and; 4) the developement of E-Government systems. TTB recently re-evaluated the revenue compliancy measure and adjusted the timeframes to reflect more realistic and attainable goals. Source --TTB Strategic Plan (Revised), Appendix F, Performance Measures

YES 11%

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The program has several annual measures that demonstrate progress toward long-term goals. There is a measure which guages the percentage of tax receipts collected electronically. The measures tie to the voluntary compliance measures which align to the TTB strategic goal, to reduce paperwork burden by continuing to create alternative reporting and filing methods through Electronic Government. Measures for: 1) cumulative percentage of excise tax revenues audited over three years and; 2) annual compliance rate: Percent of large taxpayers audited during the year -- support the TTB goal to apply statistically valid state-of-the- art methods to measure and analyze compliance with tax laws and identify gaps in tax payment.

Evidence: These measures contribute to the achievement of TTBs long-term goals to achieve 92% of voluntary compliance in terms of revenue (2.1.A.3a) and 84% percent of voluntary compliance in terms of members (2.1.A.3b). The measures adequately gauge the programs progress towards reaching goals while focusing on outcomes.

YES 11%

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The Collect the Revenue annual measures do not sufficiently address baselines. The TTB has successfully worked to provide outcome and efficiency measures that have increasing targets from year to year. However, the program should continue to review and adjust the measures to ensure that value for continued improvement and realization of efficiencies is reflected.

Evidence: TTB must develop baselines and continue to reevaluate its measures to ensure that they support the Collect the Revenue program and to improve its effectiveness. Only five of the eight performance measures have baselines. It is noted, that the program has made progress in the intent to aggressively move toward ambitious goals reflecting forward movement for the program.

NO 0%

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: TTB has two key partners in the Collect the Revenue program. The first is FMS which hosts and manages Pay.gov.-TTBs electronic tax payment and filing system. The FMS partnership supports TTB's objective "to improve service to the taxpayer and reduce burden of complying with federal laws" and specifically their efficiency measure, "percentage of tax-related transactions (applications, reports, and returns) received electronically. BPD/ARC, TTB's second partner performs the accounting function for TTB tax collections. The BPD partnership supports TTB strategic objective-to collect all revenue rightfully due.

Evidence: TTBs "reduce the burden goal" feeds into the FMS' goal: 90% of all transactions received electronically. BPD processes all excise tax revenue related transactions, to include tax receivables, tax collections, write-offs, and taxpayer refunds. There are key performance benchmarks included in the agreement between BPD and TTB to support TTBs and Treasury's strategic goals. See TTB Strategic Plan (Revised), Appendix F, Performance Measures, Percentage of tax-related transactions??received electronically. b. Agency Participation Agreement with FMS c. Pay.gov Case Study (FMS prepared) and d. Reimbursable Services Agreement with BPD/ARC

YES 11%

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Independent evaluations of the Collect the Revenue program are conducted at least annually to support improvement and evaluate effectiveness. The Treasury Inspector General (IG) conducts targeted reviews on an annual basis. TTB supplements these reviews with evaluations from external third parties based on specific need and skill requirements. Through the implementation of recommendations, management achieves continuous program improvement.

Evidence: The Collect the Revenue program is continually subject to audits by the Treasury OIG and independent public accounting firms. In 2004 TTB conducted an independent evaluation through the Kelly Anderson and Associates firm -to do a business process reengineering study. In 2005 the Treasury IGs office is scheduled to conduct an evaluation of the Revenue Centers Tax Audit Division, to review risk factors used for audit selection. All reviews are of high quality and sufficient in scope to validate the programs performance.

YES 11%

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: TTBs Collect the Revenue program budget is explicitly tied to Treasury's strategic goals, which in turn map to TTB's goals and measures. The financial accounting and time tracking systems include project codes to determine resource allocations between programs and actual time and expenses against program subcategories. The project codes allow TTB to specifically identify costs associated with the Collect the Revenue program.

Evidence: TTB's annual budget requests clearly indicate the full cost of achieving all performance goals. The programs budget requests make clear the impact of funding, policy, or legislative decisions on expected performance. All costs are reported to attain the performance results.

YES 11%

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: TTB has revised its strategic plan to engage in developing long-term ambitious targets for its measures and has demonstrated progress toward achieving these long-term targets. As a new bureau, TTB reviews and makes appropriate changes to the strategic plan to assure that it is measuring the critically few important elements of its mission.

Evidence: Although no specific strategic plan deficiencies have been identified for TTB, the agency has taken the initiative to restructure its Strategic Plan to fall in line with and to be more reflective of the Treasury as well as the agencies goals. See (Revised) Strategic Plan including Appendix F, Performance Measures

YES 11%

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: TTB develops regulations with clearly articulated connections to specific provisions of the Internal Revenue Code (IRC). When the program publishes new regulations, the preamble language in rulemaking always addresses this link to IRC law. The Collect the Revenue program evaluates the most effective way to implement the intent of the law, while minimizing the burdens on industry by considering various alternative methods for compliance.

Evidence: The Collect the Revenue program has long established regulations that are clearly necessary to accomplish the programs mission. Although the program does not normally issue regulations that meet the criteria of Executive Order 12866, the requirement is acknowledged for applicability wherever necessary. TTBs regulatory structure includes publishing regs and proposed changes in the Federal Register to provide the public with a general understanding of the regulations and the opportunity to have input into the revised end product. Internally, TTB has established a Regulation Modernization program which fits into the overall achievement of the programs goal through regular review of the regulations.

YES 11%
Section 2 - Strategic Planning Score 89%
Section 3 - Program Management
Number Question Answer Score

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Performance data for the Collect the Revenue program is collected monthly. Management uses the information in decsion-making as it relates to resource allocation and setting priorities. Performance data for the partners, FMS and BPD/ARC is collected monthly and/or quarterly. The data is used to report on annual and long-term measures in internal and external reporting. TTB has established an internal goal to achieve 1,000 Pay.gov members in 2005 based upon current data collected.

Evidence: TTB , FMS and other Pay.gov users incorporate teleconferences and face-to-face meetings to establish critical elements in providing feedback on ease of use, etc. to further enchance the appeal of using Pay.gov. (See. Schedule of Performance Reports for National Revenue Center). Based upon information collected, management took action to increase efforts to promote Pay.gov to help reach TTB's electronic efficiency goals.

YES 10%

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: TTB managers for Collect the Revenue have quantifiable performance measures written into their Performance Standards. These measures directly link to the Strategic Plan. Also, program partner BPD/ARC has performance criteria written into the contract. The criteria directly support TTB's strategic objective "to collect all revenue that is rightfully due." BPD/ARC has missed no performance criteria. FMS's strategic goal: "90% of all transactions received electronically" links to TTBs "reduce the burden" goal.

Evidence: Performance measures are written into the performance standards for each of these key critical positions: Assistant Administrator, Field Operations; Director, NRC; Director, Tax Audit; Deputy Director, Tax Audit; District Direct, Tax Audit. At the SES level an Organizational Assessment Report is prepared and reported on Results.gov. BPD performance is tracked via BPD/ARC Monthly Performance Report and the Reimbursable Services Agreement, BPD/ARC.

YES 10%

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: TTB is able to tracks funds (Federal and partners') to determine whether they are obligated in a timely manner, but program funds have not been obligated consistent with the overall program plan. In FY 2005, TTB began using a new accounting system (provided through the Bureau of Public Debt's Administrative Resource Center), which resulted in a re-estimate of how program resources are distributed across TTB's two major lines of business. As a result, TTB submitted a reprogramming request to the Congress in 2/05 in order to more properly reflect the alignment of budgetary resources. TTB must continue to improve how it incorporates this budget data into its decision making and development of financial plans. TTB has successfully demonstrated that managers review monthly and quarterly financial reports comparing actual expenditures against budget resources.

Evidence: TTB has adjusted its estimate of how funds are distributed across its budget activities several times in the past two years and continues to improve its estimates for use in financial planning. It is clear that TTB possesses the tools to accomplish the goal of ensuring that funds are spent for the intended purposes and in accordance with planned schedules in the coming year. TTB utilizes project codes through the new financial accounting and time tracking systems to determine resource allocations between programs and across budget activities, as well as to track actual time and expenses against program subcategories.

NO 0%

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: TTB has utilized several methods for measuring effectiveness and efficiencies: a: Competitive Sourcing - Choice of outside vendors and BPD for non-inherently government functions; b. use of cost comparisons for purchasing decisions; c: established an efficiency measure of "unit cost to process an excise tax return". ; d. business cases for IT selection (NPV); e.Tax Audit Div. - quality assurance audits; f. benchmark - internationally; g. independent evaluations

Evidence: The programs established efficiency measure has a goal to reduce the cost to process an excise tax from $71 in 2004 to $53 by 2010. TTBs required move from the ATF- IT infrastructure, yielded a cost benefit analysis with best alternative chosen for their IT investment. a. IT infrastructure costs (NPV Study); b. 2007 IRIS Business Case Example; c. Description: Program Eval. Process; d. Tax Audit Div. QA Program; e. TTB Strategic Plan (Revised), Appendix F, Performance Measures, 2.1.A.4 Unit cost??; f. TTB's costs as a percentage of revenue; g. Summary of Independent Evaluations.

YES 10%

Does the program collaborate and coordinate effectively with related programs?

Explanation: TTB collaborates with allied programs through several different means. Memos of Understanding are established with State agencies to share information and refer uncollected tax revenues. ATF and TTB continue to have an information sharing agreement. TTB has multiple cross-activities with a number of agencies governmentwide. These relationships foster information sharing practices necessary to cover all avenues to collect the revenue rightfully due.

Evidence: TTB has MOUs with 47 of the States that provide evidence of uncollected revenues at the State and/or the Federal levels. These agreements save the State and Federal taxpayers money by providing reports from auditors and investigators on uncollected revenues to both State and Federal officials. This saves resources and has the potential to increase revenues. The ATF and TTB Agreement provides for the exchange of tax and investigative information. Source a. MOUs with States; b. ATF and TTB MOU Agreements; c. TTB Strategic Plan (Revised), Appendix B Cross-Activity Agreements.

YES 10%

Does the program use strong financial management practices?

Explanation: The TTB FY 2004 Financial Audit: KPMG found no material weaknesses related to the financial management of the Collect the Revenue program. TTB uses BPD-ARC Procurement Request Information System Management (PRISM) to ensure all financial obligations are recorded in accordance with budget goals. Prism interfaces with the Oracle Financial System which is able to align TTBs budget with specific program expenses based upon system project codes. The system is Joint Financial Management Improvement Program (JFMIP) certified.

Evidence: KPMG noted that TTB had made improvements in previously reportable conditions prior to TTB becoming a bureau and stated "??these are no longer reportable conditions." Along those lines, Treasury's Director, Office of Accounting and Internal Control sent an email congratulating TTB for its "successful efforts in this area." Source -- a. Independent auditor's report on the Department of Treasury, which covers TTB, dated 9/30/2004; b. memo from the Director, Office of Accounting and Internal Control, Office of the Deputy Chief Financial Officer.

YES 10%

Has the program taken meaningful steps to address its management deficiencies?

Explanation: TTB implemented the changes required by the Treasury IG's office and other independent evaluators resulting in changes to procedures. Office reviews assure HQ and field offices have developed proper control procedures and that they are following them. The 2004 Treasury External Audit Report (KPMG) refers to meaningful steps taken.

Evidence: Based upon a review done by the Kelley Anderson firm, a structural weakness was identified and a recommendation was made to align the National Revenue Center along the strategic path. TTB recognized the deficiency and took action by restructuring the Center in March of 2005. The TTB Chief of Staff has the responsibility to administer recently established, regular program evaluations which will identify program deficiencies, establish timelines for management to respond and correct deficiencies.

YES 10%

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: Through the rulemaking process for each regulatory project, TTBs Web site, Industry Analyst outreach, as well as industry-related seminars are used to proactively solicit input from consumers, regulated industries, and other stakeholders. The "Public Participation" section of our rulemaking documents invites all interested parties to submit written comments. TTB's process is formalized. TTB engages in an exhaustive analysis of all comments received before publishing a final rule.

Evidence: TTB received over 15,000 comments" on the T.D. TTB-21 Flavored Malt Beverage; Related Regulatory Amendments Final Rule. See section "V" , to which the program responded to all issues raised by those submitting comments in the final rule; Industry/Public Outreach - TTB Industry Analyst Roles: ttp://www.ttb.gov/ttbanalyst.htm; www.ttb.gov/announcements/newnwflyer.doc

YES 10%

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: TTB does not normally issue regulations that meet the threshold criteria as set out in the EO 12866, Regulatory Flexibility Act, and SBREFA for requiring a regulatory impact analysis, a regulatory flexibility analysis, or a cost-benefit analysis for unfunded mandates. For any regulations that meet the criteria, such analyses will be prepared.

Evidence: An example of a regulation prepared by TTB is T.D. TTB-21, Flavor Malt Beverage and Related Regulatory Amendments Final Rule. See Section "XVI." where it is discussed that impact analyses required by these laws are not necessary.

YES 10%

Does the program systematically review its current regulations to ensure consistency among all regulations in accomplishing program goals?

Explanation: In 2004, TTB instituted a new major initiative entitled "Regulations Modernization" in which each part of the regulations within Title 27 of the CFR would be systematically reviewed and updated on a regular, scheduled cycle. TTB will review and update each of the individual parts within Title 27 by the end of 2008.

Evidence: For several years, TTB and its predecessor Agency were conscious of the need to ensure that the regulations accomplish the program goals and are consistent with program policies. The Regulations Modernization program consists of several elements such as: conducting an "environmental scan" of the industries that TTB regulates and incorporating new industry methods, developments, and practices into the regulations. Source -- a. Guidelines for "Regulations Modernization" Program; b. Regulations and Procedures Division Strategic Business Plan at Goal 3, pp. 11-12.

YES 10%

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: TTB's mission includes "...without imposing inappropriate or undue burden on those from whom we collect taxes or regulate." Paperwork Reduction Act assessment requires justifying burden hours. TTB encourages Pay.gov for filing, allows industry members to keep its records to meet statutory recording requirements and promotes alternative methods to lower costs of compliance.

Evidence: The program has demonstrated maximized net benefits of the implementation of the regulatory actions through the promotion and allowance for flexibility with recordkeeping, reporting, and payment requirements. Specifically, TTB: encourages electronic filing of tax returns and tax payments through Pay.gov.; frequently allows industry members to use many of their records in the normal course of business (such as an invoice) to meet recordkeeping requirements under the Statute; and allows industry members to use alternative methods and procedures for compliance, providing lower cost alternatives. Source -- a. Pay.gov - www.ttb.gov/epayment.htm; www.ttb.gov/epayment/learnaboutpaygov.pdf;www.ttb.gov/publications/ind_circulars/ic2004_2.pdf; b. Alternative methods: Distilled Spirits: 27 CFR 19.62; Wine: 24.22; Beer: 25.52; Tobacco: 40.45; Firearms: 53.23

YES 10%
Section 3 - Program Management Score 96%
Section 4 - Program Results/Accountability
Number Question Answer Score

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program has demonstrated adequate progress toward achieving its long term strategic goal to collect the revenue. In TTBs performance management system, the program has two key long-term measures that were successfully obtained. The first, an outcome measure is to obtain 82% Voluntary Compliance (with a 2% annual increase) in filing tax payments timely and accurately (in terms of Revenue ). The second, an efficiency measure is to achieve .2% for tax related transactions received electronically. The program fully achieved these two goals in 2004. Three other longterm measures have been developed and will use 2004 as a baseline. Program partners also made adequate progress in achieving goals.

Evidence: The program exceeded the two-tenths percent target set for the "percent of tax related transactions received electronically", measure, actually achieving seven-tenths percent. The programs voluntary compliance measure came in right on target at 82%. BPD performance metrics for achieving EFT regulation compliance; reconciling cash accounts, etc were all met. FMS fully achieve its long term goal to provide timely collection of federal government receipts. Source -- a. Congressional Budget Submission; b. TTB Strategic Plan (Revised), Appendix F, Performance Measures, 2.1.A.3a and 2.1.A.2;

YES 17%

Does the program (including program partners) achieve its annual performance goals?

Explanation: In FY 2005, the program made progress toward achieving its annual goals. The Collect the Revenue program has an efficiency goal of obtaining 98% of total tax receipts electronically. The program fully achieved this goal in 2005. The program also achieved its output measure for cumulative percentage of excise tax revenue audited. TTBs partner, BPD and FMS successfully achieved all performance measures.

Evidence: Over the last few years the program has successfully collected the targeted percentage of 98 percent for electronic tax receipts. In FY 2004, the electronic collections percentage collected was 97.3 percent, although a slight variance, it represents over $100 million in revenue. TTB improved its performance, and in 2005 successfully met its goal. The cumulative percentage measure was met and exceeded by 17% for 2005. BPD metrics of reconciled/unreconciled cash balances and EFT reg compliance were 100% accomplished. The FMS measure for percentage of dollar amount collected electronically met the 81% target.

YES 17%

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program has shown improved efficiencies and cost effectiveness through utilizing competitive sourcing for the Finance and Accounting, Human Resource, Property Mgt., Procurement, Training and IT functions for TTB. The result has been fewer staff members used than in the past. Efficiencies of operation are demonstrated in TTBs advancement in the use of Pay.gov. as well as through work process improvements.

Evidence: As a result of TTBs competitive sourcing efforts, the Bureau of Public Debt(BPD) franchise fund serves to handle the administrative management functions for the agency. The decision has resulted in a much more effective organization for TTB. Cost savings were realized for the program in the conversion from the Alcohol, Tobacco, Firearms and Explosives (ATF) financial system to the BPD-ARC Oracle system which handles the programs accounting. In 2005, TTB made Pay.gov. available to all 5200 taxpayers. By April 2005, TTB had enrolled 549 taxpayers on the system, thereby converting them from paper filers to electronic filers. The reduction in paperwork has enabled TTB staff to perform additional validation checks to improve voluntary compliance. The programs "cost of resources expended over invested" efficiency measure reflected a drop from 39% to 27% for the program.

YES 17%

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: TTBs Collect the Revenue program outperforms other federal agencies and foreign countries when comparing the administrative costs of collections. TTBs program has evaluated state and federal programs and implemented practices from other agencies that the program best relate and add value.

Evidence: Benchmarking the program against domestic and international communities reflected in the Tax Administation in OECD Countries: Comparison Info Series study, TTB's adminstrative costs of .27% of collections are below Sweden, which has administrative costs of .42% of collections. Sweden has the lowest cost of all 31 member countries. TTB has studied performance measures, analytical techniques and organizational structures used at the Internal Revenue Service and other federal agencies during the Business Process Reengineering Study.

YES 17%

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Independent evaluations performed by the Treasury Inspector General's office and other outside firms have identified no material weaknesses and have generally validated the programs effectiveness.

Evidence: TTB has several independent evaluations (KPMG and Kelley Andersen) done in addition to the Treasury IG audit to specificially address weakness and efficiency opportunities. All areas recommendeded for improvement specific to the Collect the Revenue program were addressed. The Business Process Reengineering Study of the National Revenue Center, June 2004 yielded a recommended reorganization of the Center which was implemented and completed in March 2005.

YES 17%

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: TTB strives to design regulations to provide the most efficient revenue collection system while minimizing burden on taxpayers and partners with industry to help determine the best ways to achieve this goal. TTB's regulations also allow flexibility for industry to propose and use lower cost alternate methods and procedures as appropriate. However, TTB has not developed a baseline from which to compare the incremental costs and net benefits of regulation, has not performed look-back studies using retrospective data to validate costs and benefits, and often must regulate soley based on statutory requirements. In addition, the costs of regulation could be reduced further since, based on a recent reengineering study, TTB has identified a legislative change that would reduce taxpayer burden for small taxpayers by reducing their current level of paperwork by 80 percent.

Evidence: A recent rulemaking on Flavored Malt Beverages (Final Rule published in the Federal Register on 1/3/05) demonstrates that TTB takes into account the costs and burdens to industry of the regulation and considered alternative approches. TTB's Tax Audit and Trade Investigations Divisions implement the regulations that concern collecting and protecting the revenue by providing onsite audits and evaluations of taxpayer business practices and tax records. These are done in the least intrusive and burdensome manner possible to the industries, while ensuring that the revenue is not compromised. Resources are focused on the highest risk to revenue and while minimizing burden on low-risk tax payers.

Section 4 - Program Results/Accountability Score 89%

Last updated: 09062008.2005SPR