IRS retreats from plan to begin modernization

IRS retreats from plan to begin modernization

'We don't want to bite off more than we can chew,' IRS CIO Paul Cosgrave says.

By Shruti Dat'

GCN Staff

IRS officials last week decided to delay some systems modernization projects to try to avoid further pitfalls and criticism.

Instead of pushing ahead with an aggressive agenda that called for kicking off several systems projects within the next few months, the tax agency will take more time to plan the design and development of its new systems, IRS chief information officer Paul Cosgrave said.

The tax service will postpone initiating major electronic filing capabilities until the 2002 tax-filing season, rather than roll them out next year.

Cosgrave said agency managers, as well as members of IRS oversight bodies, insisted on continuing the planning phase. As part of the postponement, the service will delay until September the initial systems design and development work, he said.


The IRS Modernization Executive Steering Committee this month concluded that the service needed to do more work on Internet security plans and to fine-tune its modernization blueprint.

'We don't want to bite off more than we can chew,' Cosgrave said. The IRS is wary of taking a large leap because it has been criticized for wasting modernization funds in the past, he said.

The service will make its third'and largest'request to Congress for an installment from its Information Technology Investment Account in the next couple of months, Cosgrave said. He declined to reveal the amount. The IRS received $35 million last July and $33 million in December.


Through September, the IRS will revamp its 3-year-old modernization blueprint. In the past 15 years, the service has issued several versions of its overhaul plan.

The IRS modernization team, along with Prime contractor Computer Sciences Corp., initially had built a plan for IT projects that would fill performance gaps identified in the blueprint. The IRS selected CSC as its modernization contractor in December 1998.

The first version of the most recent plan also focused on aligning projects to the four newly created business units: Wage and Income, Self-employed and Small Business, Large and Midsize Business, and Tax-exempt. But the fledgling units are still maturing, Cosgrave said.


The units, which he said would likely be fully operational by October, need time to provide the IT shop with input about the systems support that they need, he said.

'We have to slow the technology part to get the business up to speed,' Cosgrave said. 'The functionality of these systems depends on the needs of these business units.

'We are slowing things down intentionally because we still need to work on our business cases, architecture planning and systems interface.'

As a result, the IRS will delay the design phase of the Customer Relationship Management Core project.

Through CRM Core, the service will construct a common interface for legacy systems and create electronic taxpayer case folders for the service's customer representatives.

Modernization match

'One of the greatest challenges we have in this modernization is the entangling multiple legacy systems that have some aspect of customer relationship management,' said Tom Lucas, a senior IRS technical adviser.

The CRM Collection project, and the Correspondence and Document on Demand Imaging system, which would give customer representatives and examiners access to scanned images of taxpayer correspondence, will also be delayed.

These two projects would provide access to account information, return data, image returns and documented customer service conversations.

The IRS will also postpone deploying electronic filing services until the 2002 tax-filing season to prep its Internet security and privacy tools. Congress has mandated that the IRS process 80 percent of returns electronically by 2007.

The IRS' Electronic Tax Administration had planned to make all distributors'tax practitioners, tax preparers and tax software publishers'e-filers by 2001. Together, they account for about 60 million or nearly half of all returns filed, said Stephen Holden, ETA program director.

'Right now we provide general information and forms on our Web site,' Cosgrave said. 'We don't give taxpayers any specific information. Once you start crossing that line, you move into security and privacy requirements.'

Two projects independent of Internet security constraints and business unit demands will continue on schedule, officials said.

The Customer Account Data Engine (CADE), which is supposed to replace the 30-year-old Master File System and Integrated Data Retrieval System, will accept wage and income taxpayers' electronic returns for the 2002 tax-filing season. CADE will let authorized employees post transactions and update taxpayer accounts from their desktop PCs.


The other project that will go forward is CRM Exam. Through it, the IRS by 2002 will provide tax examiners with computation capabilities on notebook computers.

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