IRS' modernization gains traction with new data engine

The Internal Revenue Service has reach a milestone in deploying the upgraded systems of its troubled modernization program by shifting more than 25 percent of its return processing to the Customer Account Data Engine (CADE).

The CADE technology helped process more than 5 million tax returns from individual filers as of March 7.

'This system is the centerpiece of our modernization efforts at the IRS,' said Richard Spires, IRS deputy commissioner for operations support. CADE 'supports better customer service for the taxpayers, processes refunds quicker and helps the IRS better administer the nation's tax system.'

The technology is intended to replace IRS' legacy Master File system, parts of which date to the Kennedy administration. IRS plans call for CADE to house the account information of more than 200 million individual and business taxpayers, and become the single database for all account and tax return data.

CADE dramatically speeds up internal IRS processing, permitting taxpayer accounts to be updated on a daily basis, according to system designers. The older system updates only on a weekly basis, the agency said.

The current CADE system release, deployed in January, processes certain 1040, 1040A and 1040EZ forms, as well as schedules C, E and F for Form 1040 and other IRS forms known as 'schedules,' such as the Earned Income Tax Credit.

The project is being developed in phases and will be implemented over several years, with releases scheduled for delivery in six-month periods. Each successive release will enable CADE to process more complex taxpayer account information. Vendor Computer Science Corp. began working on the project in 1998.

According to a Government Accountability Office report issued last month titled Internal Revenue Service Fiscal Year 2009 Budget Request and Interim Performance Results of IRS's 2008 Tax Filing Season, 'future releases of CADE and Account Management Services continue to face risks and challenges.' The congressional oversight agency recommended IRS create a plan with specific time frames for implementing initiatives supporting its information technology human capital strategy.

The GAO also reported that 'although IRS has experienced significant management and technical weaknesses, it has made progress and addressed some, but not all, of GAO's numerous recommendations.'

According to GAO, CADE issues direct-deposit refunds 3.5 days faster and paper refunds up to seven days faster than IRS' legacy system.

About the Author

Kathleen Hickey is a freelance writer for GCN.

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