IRS commissioner forms systems modernization posse

Rossotti named a CIO and
two deputy commissioners.

IRS commissioner Charles Rossotti has turned to a career service officer, a systems
executive and a former tax chief from Kansas for help reforming the IRS and its tax
processing systems.

Rossotti named Bob Wenzel, a career IRS executive, to the new post of deputy
commissioner for operations. Paul J. Cosgrave, the IRS’ current systems consultant,
will take over as the next chief information officer. And John D. LaFaver, who instituted
reforms to Kansas’ tax system, will be the deputy commissioner for modernization.

The three will take the lead in modernizing the IRS’ disparate tax processing
systems and instituting other organizational reforms.

Cosgrave has been serving as a consultant for the IRS since July. He replaces Arthur A.
Gross, who left the service’s CIO post in April.

To join the IRS, Cosgrave left a consulting firm in New York called Strategies4Success
that he began earlier this year. Before that, he was president and chief executive officer
of the Claremont Technology Group Inc., a systems integrator in Beaverton, Ore.

A longtime IRS employee, Wenzel became the service’s chief operations officer in
April. He was co-chairman of a task force on reinventing customer service in 1997.

LaFaver comes from the Kansas Revenue Department, where he had been secretary since
January 1995. He has been credited with turning the state’s revenue office operations
into a streamlined moneymaker.

That effort, called Project 2000, used technology to provide faster service and collect
more taxes, said Sheila Walker, spokesperson for the Kansas department.

While in Kansas, LaFaver also started Tax Discovery, a project that used computerized
search techniques to ferret out businesses and individuals that weren’t paying their

The program matched tax filers’ records in the state’s Revenue Management
System against outside information sources to find areas where the data didn’t mesh,
Walker said.

The IRS commissioner is familiar with LaFaver’s efforts in Kansas. Rossotti’s
former company, American Management Systems Inc. of Fairfax, Va., was the prime contractor
on Project 2000. AMS signed a $9.5 million contract with the department in 1995.

The Kansas project could eventually be worth $70 million, Walker said. But the program
so far is paying for itself, through a $40 million increase in collected taxes, Walker

Rossotti resigned from his CEO post at AMS when he became IRS commissioner.

He appointed the new managers under the broad powers given him in the IRS Restructuring
and Reform Act.

The IRS reform bill calls for the agency to change its structure from a system of
national, regional and district offices to units serving particular groups of taxpayers
with similar needs.

It also transfers the burden of proof to the IRS in tax disputes where the taxpayer is
cooperating with an audit and directs the agency to emphasize customer service.

Under the new law, the IRS must also boost electronic filing, receiving 80 percent of
the nation’s tax returns electronically by 2007.

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