Interim systems will tide IRS over as it modernizes

The systems
switch will change how the IRS processes checks.

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The IRS’ new Integrated Submissions and Remittance Processing system can capture
scanned images of tax payment checks and vouchers but not tax returns.

To capture the tax return information, data entry clerks will type in the data from
returns twice and ISRP will flag any discrepancies, said Eugene J. Barbato, director of
the IRS’ Submission Processing Division.

There have been problems with scanning tax returns in the past. So far, the service has
found it practical to scan only the simplest forms—for example, the 1040EZ, the 1099
information return and federal tax deposits, Barbato said. Besides, the IRS expects that
in the future it will need to type in fewer and fewer returns because taxpayers will
submit most information electronically, he said.

The IRS needs ISRP now, even though the service is in the midst of a massive tax
systems modernization effort, because the systems it uses to process IRS returns and
checks are two of the service’s oldest. The system processing returns is 13 years
old; the one processing payments is 19.

Neither one can handle a four-digit year or can be remediated to do so, Barbato said.

So as it begins its mammoth modernization effort, the IRS has had to replace two of its
most important systems—at least for the interim.

“On the return side, I wouldn’t call it a redesign. There are some
enhancements,” Barbato said.

But it is a complete redesign of how the IRS processes checks. When checks arrive at an
IRS service center, they are scanned in stacks by a Unisys Corp. Document Processor 500
Transport System running CTOS. The DP 500 rapidly reads the checks and captures an
electronic image.

Data from the checks is stored on two Dell PowerEdge 4200 servers. The machines each
have a 300-MHz Pentium Pro processor, 256M of RAM and a 9G hard drive and run Microsoft
Windows NT 3.51.

Ten IBM 300GL servers host application packages for working with the check data. The
servers have 266-MHz chips, 512K of cache memory, 32M of RAM and 2.5G hard drives.

The check image is temporarily stored on three Dell PowerEdge 4200 servers for easy
retrieval, each with a 233-MHz Pentium Pro processor, 128M of RAM and a 2G hard drive. The
servers run Unisys InfoImage software. Two Dell servers with similar specs provide index
and catalog functions.

For long-term storage, the IRS uses a Hewlett-Packard SureStore optical server.

With the check images available onscreen, there should be some reduction in errors,
Barbato said.

The IRS’ service centers plan to keep another imaging system, the Service Center
Recognition Image Processing System, online as well. SCRIPS has been doing limited return
scanning of simple forms. Northrop Grumman Data Systems and Services developed SCRIPS
under a 1993 contract, and the system began operating at five IRS service centers in 1995.

“I envision the modernization blueprint will obviously include scanning and
imaging,” Barbato said, but no one knows whether SCRIPS and ISRP will be augmented or
possibly replaced in the near future.

The return data is keyed in on PCs from Micron Electronics Inc. of Nampa, Idaho.

Each center has 350 to 430 PCs running NT 4.0 and a primary data entry application, Key
Entry 3 from Southern Computer Systems Inc. of Birmingham, Ala.

Data from both returns and checks come together on five Dell Computer Corp. PowerEdge
4200s with 300-MHz Pentium Pro processors. The servers, which have 256M of RAM and 45G to
99G hard drives, run NT 4.0. The information is formatted using custom applications from
Lockheed Martin Federal Systems, the prime contractor for the ISRP project.

The Dell servers also host a Microsoft SQL Server database that the IRS uses to produce
reports tracking work at the centers.

ISRP is not linked to the IRS’ own backbone network. Instead, the system is linked
on a network supplied by Lockheed Martin Mission Systems, Barbato said. Only when the data
has been checked and put in the correct format is it placed on a cartridge and uploaded to
the IRS mainframe.

Eventually this will be done electronically—after the IRS consolidates its
mainframe operations at two sites, Memphis, Tenn., and Martinsburg, W.Va, Barbato said.

During congressional inquiries, some members have wondered why the IRS could not just
use a commercial product, such as TurboTax from Intuit Inc. of Mountain View, Calif., to
convert the paper return data into an electronic format, Barbato said. But that is just
one small piece of the IRS’ processing of returns, he said.

The IRS has to validate the data to protect against fraud and check each
taxpayer’s Social Security number, name and other data against the IRS master records
file. It also has to account for every penny that comes in the door and match it up with
an individual’s account, Barbato said.

The service plans to run ISRP at each of its 10 service centers.


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