IRS to begin database upgrade

The Customer Account Data Engine database is scheduled to be ready to handle live data by the 2002 tax filing season.

'IRS CIO John Reece

After rolling out another part of its multibillion-dollar modernization, the IRS is ready to take on its biggest challenge yet.

Last month, the tax agency went live with an application that lets the 6 million taxpayers who filed 1040EZ forms online check the status of their refunds.

This month it will begin testing the Customer Account Data Engine, the database management system that will replace the nearly 40-year-old Master File and Integrated Data Retrieval System, said John Reece, IRS deputy commissioner and CIO.

The IRS will test the first CADE release using 2001 data from taxpayers who filed 1040EZ forms this year.

The tests will run through December, and CADE should be ready to handle live 2002 1040EZ filers' data for the next tax season, Reece said.

Daily updates

The IRS will update CADE data daily. It now takes the IRS up to eight working days to update the Master File using tapes and batch processing. The mainframe system, written in assembly language, still requires the mailing of tapes among IRS processing centers. But, as the storehouse of information about the nation's taxpayers, both individuals and businesses, it has been the lifeblood of the agency.

The 1.5T Master File consists of three flat files. The Individual Master File, or IMF, holds data about individual taxpayers, and the Business Master File, or BMF, contains business returns. The third, the Nonmaster File, holds cases that don't fit into either of the other two categories.

With CADE, IRS workers will access a central repository of taxpayer information from their PCs, and taxpayers will get information on refunds within three days instead of six weeks.

The IRS will develop CADE in phases, accommodating more types of taxpayers in every release, Reece said. The CADE test follows on the heels of last month's modernization initiative, the Internet Refund Factor of Filing system.

The taxpayers who filed the 1040EZ form online can access the system at www.irs.gov. By entering their Social Security numbers or IRS individual taxpayer identification numbers, filing status and refund amounts, they can get updates on their refund status, said Mike Plett, program manager for IRS' Prime alliance, the team of contractors working on IRS modernization under lead contractor Computer Sciences Corp.

Other alliance members include IBM Corp., KPMG LLC of New York, Northrop Grumman Information Technology and Science Applications International Corp.

SAIC developed the refund status system.

Useful feedback

Once users fill in the information, the system checks the status of their returns against Master File data, said Plett, who spoke at the spring meeting of the Council for Electronic Revenue Communication Advancement held in Arlington, Va. The system then tells users the status of their refunds.

Plett said that even though the filing season is over, 'we will get useful information' on how the system behaves.

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