Hill frees IRS' Prime funding

Hill frees IRS' Prime funding

Agency gets OK to start modernization

By Shruti Dat'

GCN Staff

Congress has doled out the IRS' first installment of systems modernization funding. The tax agency will use the $35.1 million to complete plans for the Prime systems integration contract.

Lawmakers had withheld the allocation pending congressional approval of Phase 1 plans developed by the IRS and its Prime contractor, Computer Sciences Corp. 'The $35 million was provided by Congress to do the planning and high-level design for the modernization,' IRS chief information officer Paul J. Cosgrave said last week.

The release of the money in some ways marks the official kickoff of the 15-year project. Although the agency began developing its modernization strategy in December of last year, the release of the money from the IRS' Information Technology Investment Account means the IRS can begin the grunt work of bringing its aging computers up to date, IRS officials said.

Some IRS systems date to the Kennedy administration. The latest overhaul plan follows almost a decade of attempts to refurbish IRS systems under the auspices of the former Tax Systems Modernization project.

A clear idea

By next month the IRS should have set clear definitions of the projects it will undertake during the first five years of the modernization effort, Cosgrave said. The agency will begin with projects that most directly improve service for taxpayers, he said.

By October, CSC and the IRS will present an expenditure report to Congress outlining initiatives for the first stage, said Lee Ann White, CSC's director of program communications for the Prime contract.

The IRS will spend the $35.1 million in three ways:

  • $14.6 million is slated for completing the technology blueprint, which includes projecting costs for modernization projects over the next three to five years.
  • $11.6 million will be used to develop management and engineering capabilities needed to construct and run the systems.
  • $8.9 million will go to improving routing systems that handle taxpayer calls.


Cosgrave pinpointed as the most critical project the IRS' archaic mainframe databases, which store and analyze taxpayer records on computer tape.
''The initiative at the top of the list will be the Masterfile database, Cosgrave said. 'The main problem is the tape-based system takes one week to update, which means a week's exposure to inaccurate information.'
''Customer service representatives who are unaware of changes give incomplete information to taxpayers inquiring about the status of their accounts, he said. The delay in updates also leads to delays in refunds and tax notifications.

The IRS is considering shifting individual taxpayers' records to new databases within five years and then gradually moving businesses' tax records.

Another goal is to increase electronic filing to 80 percent by 2007, as Congress mandated last year. Currently 25 percent'or 35 million taxpayers'file electronically. But the filing initiative, like others, is still in the developmental stages, Cosgrave said.

Another IRS initiative is aimed at reducing the number of times that taxpayer phone calls are routed, although the current AT&T Corp. routing system distributes calls to appropriate personnel or offices fairly well, Cosgrave said.

Hotline to help

'We are able to successfully answer about 70 to 80 percent of our calls, but we would like to improve our responsiveness,' he said.

Creating a self-help system for taxpayers making inquiries via phone or the Internet ranks high on the list of priorities, Cosgrave said. The IRS is looking at how it could let taxpayers learn the status of their refunds via the Internet without endangering their security or privacy, he said.

Improving electronic tax filing and other electronic services is another near-term goal, Cosgrave said.

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