IRS Modernization Programme Leads To Improvements

by Mike Godfrey, Tax-News.com, Washington

26 October 2010

According to a report released by the United States' Treasury Inspector General for Tax Administration (TIGTA), the Business Modernization Programme of the Internal Revenue Service (IRS) has continued to provide new information technology capabilities and related benefits.

TIGTA assesses and reports annually on the progress of the IRS’s modernization activities, as is required by the Internal Revenue Service Restructuring and Reform Act of 1998.

The programme is a complex effort to modernize the IRS’s technology and related business processes while replacing outdated technology and maintaining the current tax system. Since TIGTA’s 2009 report, for example, the IRS has implemented new releases of the Modernized e-File (MeF) systems. Most significantly, the MeF for the first time included individual tax returns in addition to business tax returns.

Additionally, the IRS has refocused its modernization programme to deliver new and retooled information technology services more quickly. TIGTA said that it is encouraged by the IRS’s efforts, but that significant risks are involved in retooling the entire programme, as they involve the use of techniques and processes new to the IRS.

"While the IRS has demonstrated some promising information technology capabilities in its business modernization efforts, our report found that the IRS still needs to resolve some troubling security vulnerabilities with the programme,” said J. Russell George, the TIGTA. “Further, management of the project costs and schedules has improved since our previous report, but the IRS has not always effectively implemented planned processes or delivered all planned system capabilities to achieve the programme’s expectations.”

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