Tax Systems Modernization: Management and Technical Weaknesses Must Be Corrected If Modernization Is to Succeed

Public Law 105-206 stated that it was the policy of the Congress that paperless filing be the preferred form of paying taxes. The law further states that by 2007, the goal is to have 80 percent of all tax returns electronically filed. To reach this goal, the law allows IRS to promote electronic filing through targeted advertising campaigns. According to the IRS' Assistant Commissioner for E-file, during 1998 the IRS executed Requests for Agreements with the private sector that involved non-monetary incentives for tax practitioners to use electronic filing. In addition, the Assistant Commissioner for electronic filing has refocused its marketing to better target its electronic filing strategy by, for example, creating electronic filer demographics profiles using data mining techniques, completing awareness tracking and taxpayer attitudinal studies, and making electronic filing so simple, inexpensive, and trusted that taxpayers will prefer this method to calling and mailing.

IRS' May 1997 Modernization Blueprint included a high-level description of a systems life cycle (SLC), which addressed investment selection, prioritization, control, and evaluation. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes. This recommendation enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

While IRS has not completed its SLC, the Commissioner and CIO did review all planned and ongoing investments, which led to the cancellation of the Workload Management System ($53.4 million), the Corporate Accounts Processing System ($90.5 million), the Document Processing System ($15.0 million), and the Automated Tax Law system ($12.8 million). In addition to these cancellations, the former IRS CIO issued a moratorium on all new development projects until the SLC was completed and implemented.

According to IRS, it has developed standard wording for use in new and existing contracts that have a significant software development component that requires CMM Level 2 capabilities. Moreover, in the request for proposals for the modernization prime contract, IRS required CMM Level 3 capabilities.

IRS' May 1997 Modernization Blueprint included a high-level description of a SLC)covering such as areas as requirements management, quality assurance, configuration management, and project planning and tracking. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed in a number of areas including the ones cited in the recommendation. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes. The recommendation in AIMD-98-54 enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

IRS' May 1997 Modernization Blueprint included a high-level description of a SLC. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed in a number of areas. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes. The AIMD-98-54 recommendation enveloped and superseded the above recommendation, and thus allows the above recommendation to be closed out.

IRS' May 1997 Modernization Blueprint included a high-level systems architecture. GAO reviewed the systems architecture and found that while it was a good start, it was not sufficiently detailed in a number of areas including security, telecommunications, network management, and data management. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of a systems architecture. The AIMD-98-54 recommendation enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

IRS' May 1997 Modernization Blueprint included a high-level description of a SLC. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed in a number of areas, including configuration management. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes. The AIMD-98-54 recommendation enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

IRS' May 1997 Modernization Blueprint included a high-level description of a SLC. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed in a number of areas, including, for example, developing a security concept of operations. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes. The AIMD-98-54 recommendation enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

IRS' May 1997 Modernization Blueprint included a high-level description of a SLC. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed in a number of areas, including test and evaluation. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes. The AIMD-98-54 recommendation enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

IRS recently developed an integrated test facility to support its year 2000 conversion efforts.

IRS' May 1997 Modernization Blueprint included a high-level description of a SLC. GAO reviewed the SLC and found that while it was a good start and consistent with industry practices, it was not sufficiently detailed in a number of areas including systems architecture enforcement controls. Accordingly, GAO recommended in AIMD-98-54 that IRS complete its definition and implementation of all SLC processes, including processes for effectively enforcing the architecture, and that IRS' Chief Information Officer be assigned responsibility for enforcing the architecture. The AIMD-98-54 recommendations enveloped and superseded the above recommendation, thus allowing the above recommendation to be closed out.

IRS consolidated, under the Associate Commissioner, the authority over all information systems development efforts, including research and development projects. IRS is now taking steps to institutionalize this relationship through the processes defined in its systems life cycle.