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MSP #2: INFORMATION TECHNOLOGY MODERNIZATION

The IRS Modernization Plan’s Goal to Improve the Taxpayer Experience Is Commendable, But the IRS Needs Additional Multi-Year Funding to Bring It to Fruition

TAS Recommendations and IRS Responses

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1.

TAS RECOMMENDATION #2-1

Modify the Plan to conform to the requirements of the TFA, by itemizing the anticipated project costs and potential risks if the Plan is not fully funded.

IRS RESPONSE TO RECOMMENDATION: As required by the TFA, the IRS is developing a multi-year strategic plan for its information technology needs. This strategic plan will supplement the Modernization Plan with additional commentary, including workforce needs, enterprise architecture concepts, and alignment with the IRS Strategic plan. The IRS also updates the Modernization Plan at least annually, itemizing the expected costs and risks for each of the programs within the plan.

CORRECTIVE ACTION: The IRS is developing a multi-year strategic plan for its information technology needs. This strategic plan will supplement the Modernization Plan with additional commentary, including workforce needs, enterprise architecture concepts, and alignment with the IRS Strategic plan. The IRS also updates the Modernization Plan at least annually, itemizing the expected costs and risks for each of the programs within the plan.

TAS RESPONSE: We appreciate the IRS’s commitment to take these actions. This issue is further exacerbated by the impact of COVID-19 and the IRS’s ability to work remotely with the necessary systems in place.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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2.

TAS RECOMMENDATION #2-2

Conduct independent verification and validation of the updated plan to verify that it will result in complete modernization of IRS IT systems, similar to the independent verification and validation required in the TFA of the CADE 2 and ECM systems. The IRS should include for all modernization projects a process and plan to release funding as results are demonstrated in the programs relating to taxpayer and/or customer experience improvements.

IRS RESPONSE TO RECOMMENDATION: Consistent with the Consolidated Appropriations Act of 2020 (PL 116-93), GAO is directed to conduct an annual review of Business Systems Modernization (BSM) funded initiatives – i.e., the Modernization Plan. This independent assessment largely fulfills the intent of NTA’s recommendation; therefore, an additional independent assessment will not be pursued. The IRS will rely upon this assessment, and act upon GAO’s recommendations each year when it updates the Modernization Plan.

CORRECTIVE ACTION: Consistent with the Consolidated Appropriations Act of 2020 (PL 116-93), GAO is directed to conduct an annual review of Business Systems Modernization (BSM) funded initiatives — i.e., the Modernization Plan.  This independent assessment largely fulfills the intent of NTA’s recommendation; therefore, an additional independent assessment will not be pursued. The IRS will rely upon this assessment, and act upon GAO’s recommendations each year when it updates the Modernization Plan.

TAS RESPONSE: We understand the IRS’s desire to avoid an overlap of responsibilities, given limited funding. However, the GAO annual review does not ensure a complete modernization of IRS IT, it is merely a review after the fact. The IRS would benefit from developing a process and plan to release funding as results are demonstrated   in the programs relating to taxpayer and/or customer experience improvements.

Update: TAS reviewed again and has determined that this independent assessment largely fulfills the intent of our recommendation. The IRS will rely upon this assessment, and act upon GAO’s recommendations each year when it updates the Plan.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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3.

TAS RECOMMENDATION #2-3

Include in future modernization plans the modernization of the BMF system.

IRS RESPONSE TO RECOMMENDATION: We agree with the importance of the Business Master File (BMF) and continued modernization of the business taxpayer experience in parallel with improvements to the individual taxpayer experience. The IRS continues to make improvements for business taxpayers in fiscal years 2019 and 2020, including customer callback on the employment tax phone application, integration of BMF data with ECM, and digital communication pilots with several types of individual, business, and tax-exempt customers. With the limited resources available for modernization of those programs already prioritized by the organization, modernization of the BMF will not be considered at this time.

CORRECTIVE ACTION: N/A

TAS RESPONSE: We ask that the IRS keep open the possibility of modernizing its BMF system.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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