In the wake of a favorable General Accounting Office review of the tax systems modernization effort, the IRS got word Wednesday that it would receive $35.1 million from Congress to begin a major upgrade to its computer systems.
The cash infusion came on the heels of a GAO report praising the agency's first steps toward computer modernization. The report, "Tax Systems Modernization: Results of Review of IRS' Initial Expenditure Plan (GGD-99-206)," is among the few complimentary reviews GAO has ever published about federal computer modernization efforts. Congress has withheld funds from the IRS in the past due to the agency's long history of unsuccessful modernization attempts.
Last year, IRS Commissioner Charles Rossotti announced a plan to restructure the agency along customer business lines and reorganize its system of national, regional and district offices. As part of the sweeping changes, computer systems will be updated over the next fifteen years at an estimated cost of $5 billion. The goal is to improve the IRS's core data systems and provide taxpayer access to the agency via telephone or the Internet.
According to the IRS, the $35.1 million Congress approved this week will be used to begin organizing the Prime Systems Integration and Services Contract program, the long-term project to replace the agency's old computer systems. The first round of funds will be used in part to finish the agency's technology blueprint, develop management and engineering needed to run the project, improve electronic tax filing and speed up call routing to the agency.
GAO approved of the plan, saying the step-by-step approach "is a recognized 'best practice' that leading public and private sector organizations use to mitigate the risk of program failure on large, complex, multiyear modernization programs."
GAO recommended that progress against incremental goals be included in future IRS plans and that the nature of the agency's unique partnership arrangement with its contractors be clearly defined. The agency concurred with GAO's findings and agreed to follow the report's recommendations.