Tax Systems Modernization

Management and Technical Weaknesses Must Be Corrected If Modernization Is to Succeed Gao ID: AIMD-95-156 July 26, 1995

Since 1986, the Internal Revenue Service (IRS) has spent $2.5 billion on Tax Systems Modernization and expects to spent more than $8 billion on the project through 2002. By any measure, this is a world-class information systems development effort, much larger than most other organizations will ever undertake. Tax Systems Modernization is the centerpiece of IRS' vision of virtually paperless tax processing to optimize operations and better serve taxpayers. This report critiques the effectiveness of this effort. GAO discusses IRS' progress in implementing its modernization and describes serious management and technical weaknesses that must be overcome if tax systems modernization is to success. GAO makes more than a dozen specific recommendation for improving IRS' business management and information systems management and development capabilities.

GAO found that: (1) despite IRS efforts to improve its tax processing, pervasive management and technical weaknesses still remain that could impede its modernization efforts; (2) IRS does not have a comprehensive business strategy to reduce paper submissions; (3) IRS has not yet fully developed the requisite software and technical infrastructures to successfully implement its modernization efforts; (4) other tax system modernization (TSM) weaknesses include IRS failure to fully implement strategic information management practices, an immature and weak software development capability, and incomplete systems architectures and integration and system planning; (5) IRS does not manage TSM as an investment, systems development is not driven by reengineering efforts, and IRS staff do not have the necessary skills to meet future IRS needs; and (6) IRS has not assigned responsibility, authority, and accountability for managing and controlling systems modernization to one individual or office.

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.

Director: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.