IRS will put business rules engine to the test

What's ahead?

2004

CADE

August: CADE Release 1.1 will be used to process some Form 1040 EZ filers who got extensions for the 2003 tax year.


Business Rules Engine

February-July: IRS and CSC are testing how the rules engine performs in a mainframe environment under heavy volume.


July-December: IRS will conduct a pilot using eMerge software to power the rules engine, testing a small number of rules on a particular tax computation for some filers of Form 1040 EZ.


2005

CADE Release 1.2 will be used for 1040 EZ filers throughout the 2005 filing season, with 2004 tax law changes.


2006

CADE Release 1.3 will implement the business rules engine for 1040 EZ filers and incorporate 2005 tax law changes.

The IRS this summer will test the business rules engine that will power its long-awaited taxpayer database, and it plans to implement the software in 2006.

The tax agency considers the business rules software a crucial element of its systems modernization. The software will encode tens of thousands of business rules for processing tax returns by the Customer Account Data Engine in the relational database system that will replace the IRS' 1960-era, tape-based Master File. IRS officials expect to roll out the first version of CADE late this summer, nearly three years later than originally planned.

Like an electronic accountant, the business rules engine automates processing of tax returns by applying the appropriate business rules to every question on every electronic tax form. The engine must apply the rules in the right sequence to produce the correct effect, said Grady Campbell, senior technical staff member with Carnegie Mellon University's Software Engineering Institute.

Business rules express in software the relationships among data, in particular the preconditions that result in actions.

'You get very high productivity using these specialized languages. Use of a business rules engine should help us keep our costs within the acceptable range for the CADE program,' said Fred Forman, associate IRS commissioner for business systems modernization. The IRS expects in July to complete an engineering study with Prime contractor Computer Sciences Corp. that will determine if the business rules engine can perform under the heavy volume and complexity of a typical tax-filing season.

In its evaluation of CADE last fall, SEI supported IRS in its decision to use a business rules engine but recommended that the tax agency immediately conduct performance testing. 'They confirmed this was absolutely the right approach,' Forman said.

IBM Corp. is developing CADE using the company's DB2 flagship database product for mainframes.
The tax agency will conduct a pilot later this year, experimenting with a small number of business rules around a particular tax computation on a small number of the simplest returns, Forman said. IRS will run the pilot using the eMerge business rules engine from Sapiens Americas of Research Triangle Park, N.C.

The first release of CADE is due in August. The timing of the release'after the onslaught of tax season'will allow IRS officials to test -drive the relational database on some of the simplest returns from 1040 EZ filers, 5 million of the total 140 million filers.

After the testing this summer, IRS and CSC will apply tax law changes for next year's filing season. That version of CADE, Release 1.2, will be used in 2005.

IRS will then replace that CADE version with the 1.3 release, which layers the business rules engine. IRS and CSC will build 1.3 during 2005 for use in 2006, Forman said.

'We're going to replace the business rules we currently have coded using C++ with the business rules engine. It's a small experiment around the volume and complexity,' Forman said.

The business rules engine will ultimately make tax processing more productive and efficient, Forman said.

As future releases of CADE become more complex and encompass more filers, the number of business rules also will expand, although underlying technology will not, Forman said. The simplest tax forms for the initial release of CADE incorporate about 1,000 business rules, he said. 'We are certain we will have tens of thousands of business rules once CADE rolls out, and that's just for individual filers.'

Business rules engines evolved from artificial intelligence, or decision processing logic, he said. The Sapiens eMerge software comprises a business integrity server, which IRS refers to as the business rules engine, as well as an Extensible Markup Language adapter and rules tool to map the engine's database transactions.

The software also has a rules management layer, known as RulesScribe, which lets business users enter and document new rules. New tax legislation would be a typical source of new rules.

IRS will use a commercial version, but Sapiens developed the XML adapter and enhanced RulesScribe for the tax agency, said Gil Segal, Sapiens' director of enterprise solutions.

IRS will complete a proof-of-concept test with the engine at the end of the month.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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