Tax Administration
Status of Tax Systems Modernization, Tax Delinquencies, and the Tax Gap Gao ID: T-GGD-93-4 February 3, 1993This testimony, which draws on GAO's December 1992 transition series report on the Internal Revenue Service (IRS) (GAO/OCG-93-24TR), discusses three of the most critical issues facing the agency: (1) managing the $23 billion Tax Systems Modernization program, (2) collecting $30 billion in delinquent taxes, and (3) reducing a $114 billion tax gap. These issues are related. IRS would be better able to collect delinquent taxes and reduce the tax gap if its employees had on-line access to information when they need it--a basic goal of Tax Systems Modernization. GAO cannot overemphasize the importance of modernizing IRS's outdated systems. Dramatic improvements in IRS' ability to collect delinquent taxes and reduce the tax gap will only come about, in GAO's view, through fundamental changes in the way IRS does business. GAO spells out several potential obstacles to successful implementation of Tax Systems Modernization.