Stakes are high

President Clinton's 1997 budget calls for significant new money for what has become one
of the most controversial information technology projects in government. IRS's Tax Systems
Modernization would get a big boost, to $850 million.

Clinton offers this budget proposal at a time when TSM is facing a storm of
congressional ire. It is tempting to dismiss this debate as so much election-year acrimony
within a divided government. But although the Republican opposition is predictable,
Democrats such as Rep. Steny Hoyer (D-Md.) also are getting fed up. And within the
administration itself there is growing disillusionment with TSM, the budget request

Never exactly a darling of Congress, still, early procurement and program successes of
TSM did ensure relatively hassle-free appropriations. But recently TSM has been the target
of sharp congressional criticism, culminating in threats by Rep. Jim Lightfoot (R-Iowa) to
can the whole program. As chairman of the House Appropriations Subcommittee on Treasury,
Postal Service and General Government, Lightfoot has the power to do this.

Tax Systems Modernization is in some ways a grand-design type of project. Grand designs
always come unraveled with time. A few years ago, then-IRS CIO Hank Philcox could state
succinctly the goals of TSM. The purpose, he said, was to increase voluntary compliance
with the tax code. All else--the automation of paper processes, imaging, computerized
telephone and the rest--were tactics to achieve that larger goal.

Today, TSM appears to many on the Hill as a disjointed effort giving little return for
what it costs.

No one disagrees that the systems for processing tax returns need modernizing. The idea
of breaking TSM into small, more manageable components makes sense. In fact, that's what
the program was supposed to do in the first place. Even more important is a new management
approach to provide TSM with a better framework for success. Perhaps most important, TSM
needs a single boss and champion who can establish credibility on the Hill and inside the

Modern tax systems are crucial for improving the government's own processes and its
dealings with the public. If this program fails, it will be a mark against the very idea
of using information technology to make things better. And in many minds it will confirm,
however unfairly, the ineptitude of the federal government. This none of us can afford.

Stay Connected

Sign up for our newsletter.

I agree to this site's Privacy Policy.