Tax Systems Modernization

Management and Technical Weaknesses Must Be Overcome To Achieve Success Gao ID: T-AIMD-96-75 March 26, 1996

The Internal Revenue Service (IRS) has spent more than $2.5 billion on Tax Systems Modernization through fiscal year 1995. In addition, it plans to spend up to $8 billion on this effort through 2001. Tax Systems Modernization is central to IRS' vision of a paper-free work environment in which taxpayer account updates are rapid and taxpayer information is readily available to IRS employees responding to taxpayer inquiries. Over the years, GAO has reported that IRS' effort to modernize tax processing is jeopardized by persistent and pervasive management and technical weaknesses. IRS attempts to correct these problems have so far met with little success. This testimony focuses on (1) IRS' efforts to correct management and technical weaknesses that have impeded Tax Systems Modernization and (2) analogous technical weaknesses in the recent Cyberfile project, which will allow taxpayers to file their returns electronically from personal computers, suggesting that IRS continues to risk millions of dollars in undisciplined systems development.



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