Commission floats idea of an independent IRS

IRS chief information officer Arthur A. Gross told the commission that the service will
send a revised systems architecture to Congress by spring. The agency needs to focus on
submissions processing, compliance and customer service, Gross said.

 He also argued against viewing TSM as an all-or-nothing proposition. IRS must
abandon its long-standing Big Bang approach to systems overhaul and the tendency to
modernize all systems simultaneously.

 Gross said he is prioritizing the agency's systems requirements and planning a
series of evolutionary IT investments. But that approach will require the agency to
maintain some tottering systems in the meantime, he acknowledged.

 "IRS must not retire its stove-piped customer service and compliance systems
until their functionality is replaced by modernized systems insofar as IRS business
operations are largely dependent on these systems," Gross said.

 He also said the agency must move away from a distributed processing environment and
toward a mainframe-centric infrastructure. But Gross avoided endorsing total privatization
of IRS operations.

 "The tax service is in the early stages of looking at outsourcing its tax
returns processing [GCN, Jan. 27, Page 3]. Though the report it finished last month
promotes more use of contractors, IRS has avoided the Congress-backed push to contract IRS
systems operations to a single TSM contractor.

 Gross, who as the head of the New York Revenue Department privatized much of that
state's collection process, said outsourcing would require an intense partnership between
the agency and its vendors. "IRS cannot do it on its own, and, frankly, a contractor
cannot do it on their own," he told the commission.

 As an interim effort, IRS officials said the agency clearly must do more to get
information in an electronic format from the get-go. The agency plans this month to finish
a report for Congress on its electronic filing options.

 "Taxpayer use of [electronic filing] and TeleFile systems has not grown as
rapidly as we had projected and the potential uses of technology have moved beyond our
original concept," said John Dalrymple, deputy chief of IRS taxpayer services. 

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