Tax Systems Modernization

Input Processing Strategy is Risky and Lacks a Sound Analytical Basis Gao ID: T-IMTEC-92-15 April 29, 1992

The Internal Revenue Service's (IRS) input processing strategy--intended to allow the agency to drastically reduce the manual processes associated with handling paper income tax returns, tax payments, information returns, and correspondence--appears to be a high-tech, high-risk venture for which IRS has yet to do the homework to justify committing nearly $3 billion. Further, IRS plans to spend more than $130 million on an input processing system, the Service Center Recognition/Image Processing System, that duplicates many functions done by the Document Processing System. GAO recommends that IRS do the appropriate analyses to justify proceeding with its input processing strategy. GAO also recommends that the agency sort out the overlapping functions planned for the two tax return imaging projects to decide the extent to which both systems will be needed.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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