The Internal Revenue Service has taken another step toward making senior managers accountable for the agency's modernization effort. In a five-year strategic plan released last week, IRS formalized its new organizational structure and reported progress on many reforms mandated by the 1998 IRS Restructuring and Reform Act. The plan also described a new performance measurement system that will make senior managers accountable for the agency's operations. "The plan breaks ground in a number of ways," said IRS Commissioner Charles Rossotti. "It ties together and connects for the first time IRS' strategies, missions and goals to actual program plans." The plan summarizes a series of organizational changes meant to improve the IRS' customer focus and increase the accoutability of its senior leaders. Traditionally organized along geographic and functional lines, the agency is now divided into four operating divisions. Each of these divisions represents a different customer segment: individual taxpayers, small businesses, large corporations and tax-exempt organizations. The heads of these four operating divisions will be accountable for program operations, according to the plan. The plan also clarifies the role of individual employees in the agency's new organizational scheme. As of Oct. 1, the former IRS field structure, which featured four regional and 33 district offices, was dismantled. Employees now report up a chain of command within the four operating divisions. Senior accountability and the new operational structure are crucial to the agency's ongoing modernization effort, which is expected to last another eight years. The General Accounting Office has often spotlighted the role of senior managers in overseeing the IRS' various modernization programs. In 1998, Congress reserved final approval for all future IRS modernization spending, requiring that the agency submit a specific spending plan for access to modernization funds. Since then, GAO has reviewed all IRS spending plans and often found that IRS failed to conform to "best practices" management guidelines. The IRS has made progress in its effort to establish managerial controls on its tax system modernization plan, according to GAO's most recent audit. The IRS will submit another spending plan for congressional approval on March 1. Advances have also been made in the agency's systems modernization program, which last week successfully consolidated 67 mainframe computers spread across 12 locations to 20 mainframe computers in three locations. According to Rossotti, this consolidation will help cut the response time needed to respond to taxpayer inquiries.
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