By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

IRS modernization has been going on forever, it seems. Back in the late 1980s the agency started using telecommunications to update its systems, instead of flying mag tapes around on airplanes.

The latest attempt to modernize technology and business processes at the IRS started 12 years ago at a cost of well over $3 billion so far, said Deputy Inspector General Mike Phillips.

A new report from the Treasury Inspector General For Tax Administration looks at Tax System Modernization.

The goal of the overhaul, said Phillips, is to improve services to customers “and to provide IRS customer service representatives with faster and improved access to taxpayer account information,” integrating software and hardware components while updating outdated technology and maintain the current tax system.

In its ninth annual assessment, Phillips said TIGTA found this year that “the IRS modernization program has continued to help improve IRS operations and is refocusing its efforts to improve its business practices with these new technology solutions. The product development activities haven’t always been effective in terms of being implemented and delivered to help achieve the expectations. We did find in the last year that product costs and product schedule maintenance has actually improved, but the requirement development and management continue to need attention.”

Those remain the most pressing issues, said Phillips, but the report also finds IRS has refocused efforts to try to deliver the modernized system sooner. TIGTA, said Phillips, is “encouraged” by the retooling of the customer account data engine (CADE). He explained CADE is the backbone of the modernization program. The idea is to replace the master file which contains all taxpayer information.

The report cautions there are risks involved, including making sure there’s adequate internal oversight, the existing CADE system and the individual master file program systems are continuing to operate while modifications are made to the CADE2 system, and resolving various security vulnerabilities.

Best practices, said Phillips, boil down to consistent oversight as well as “planning appropriately and following through to make sure that you’re accomplishing your expectations.”

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