Tax Systems Modernization: Progress Mixed In Addressing Critical Success Factors

GAO discussed the Internal Revenue Service's (IRS) progress in implementing the Tax System Modernization Program, focusing on eight factors critical to program success. GAO noted that IRS: (1) stated its business vision in its latest version of the Design Master Plan; (2) should be further along in its planning for the modernization, since significant initiatives are already underway; (3) has developed a tracking mechanism to monitor modernization progress and has included in the Design Master Plan development milestones for each major project and a matrix specifying which organizational component is responsible for each modernization project; (4) lacks a strategically prioritized mix of alternatives to its planned optical character recognition system, which may not be available when needed; (5) completed two of five initiatives intended to strengthen controls needed to ensure compliance with established procurement policies and procedures, but delayed the completion of modernization requirements by missing opportunities to head off successful protests of its Treasury Multi-User Acquisition Contract procurement and not obtaining vendor input on the scope of the Check Handling Enhancements and Expert System; (6) has a good framework for managing its systems development projects, but problems remain; (7) is not having any difficulty in achieving its hiring goal for systems development and has drafted an overall technical strategy for training staff; and (8) has initiated a privacy project to inventory and catalog its databases, identify existing privacy protections, and highlight areas that need improved security.