INTERVIEW: Robert E. Barr, tax man turned tech exec
IRS is prepared for growth of e-filing
Robert E. Barr has an understanding of tax software from public- and private-sector viewpoints. After five years as a marketing executive at tax software publisher Intuit Inc. of Mountain View, Calif., he served for three years as IRS assistant commissioner for electronic tax administration.
Robert E. Barr
In his IRS job, Barr spearheaded the recent growth in electronic tax filing by individual taxpayers. The agency electronically collected 19 million Form 1040s in fiscal 1998, a figure that jumped to 35 million in fiscal 2000.
After leaving federal service last fall, Barr joined Dell Computer Corp. as director of federal marketing. He also is on the board of directors of 2e Corp., a Sterling, Va., start-up that provides employee benefit documents via the Internet.
At the University of South Carolina, Barr earned a bachelor's degree in marine biology. He holds a master's in business administration from the Wharton School at the University of Pennsylvania and completed Harvard University's Advanced Management Program for midcareer executives.
GCN associate editor Patricia Daukantas interviewed Barr by telephone.GCN:
Why did you take three years off from industry to work in the government?BARR:
From my perspective, it represented an opportunity to set in motion some programs that improved the lives of every American. It was an opportunity to make the whole process of filing taxes simpler, making it electronic, getting people their refunds back faster and making it more accurate.
I had a blast. It was that call to public service, and at midcareer I could still afford to do it.GCN:
Did your previous experience with a vendor of tax software prepare you to work inside the IRS?BARR:
If you're a vendor and you're gearing up tax software, then you understand that come September or October you've got to staff up. You understand it's going to get really busy from Jan. 15 through April 15. You understand that after April 15, things are going to wind down. The models for operating in that kind of an environment were very similar. Tax software and the IRS share the same customer: the taxpayer.
Family: Married; three children
Cars currently driven: 2001 Saturn SL-2; 1976 GMC Sierra pickup with 400,000 miles
Last book read: Sea Change by James Powlick
Favorite Web site: www.classmates.com
Sports activity: Running
Last book read: James Powlick
Motto: 'Don't ask 'Can I?' Ask, 'How can I?' '
Intuit Inc. is both a business-to-business software provider and a business-to-consumer software provider. The IRS'think about it'is business-to-business. Corporations pay taxes. It's business-to-consumer; individuals pay taxes. Reaching out to those two different communities was something Intuit trained me to do. I leveraged it at the IRS, and I'm happy to be leveraging it here at Dell Computer Corp.
When you're in the tax software business, you're selling not just software to do taxes at home, you're also selling to tax preparers for more complex returns. Their needs are clearly different from an individual taxpayer's.
I learned that at Intuit, and I forged a great many relationships with the senior executive cadre at the IRS. If you're in the tax software business, you have to have a good relationship with the tax authorities, federal and state. So when I walked in the door, I knew the top echelons there, and they knew me. That helped in the transition from the private to the public sector.GCN:
How did you convince people at the IRS that it would be OK to transmit private information, such as annual income data, over the Internet?BARR:
When you tell people that you're using sophisticated encryption algorithms that protect their data, they're increasingly comfortable.
We don't actually file directly to the IRS. We file to, for example, Intuit or to H&R Block or to another third party. The data from a PC at someone's home moves over the Internet to a preparer's data center, and the sophistication of the encryption is just amazing. When the data moves from the preparer to the IRS, that is on secure private lines.
What the taxpayer needs is simply reassurance that the data's encrypted, that it's not going to sit around in databases somewhere that somebody can stumble upon.GCN:
If electronic filing continues to grow at its current rate, will the IRS be equipped to handle the load?BARR:
The IRS already has in place three times the capacity for what's likely to get filed, say, a year from now. It can handle 100 million electronic returns. They've overengineered the capacity to assure that if it materializes, nobody will feel it.GCN:
Has the electronic-signature law had any impact on electronic tax filing?BARR:
Actually, the electronic signature law was not necessary for electronic filing. Back in 1998, Congress passed the IRS Restructuring and Reform Act that declared that electronic signatures, for purposes of filing tax returns, were both civilly and criminally equivalent to paper signatures.
A piece of legislation that passed, I think, two years before that gave the secretary of the Treasury authority to declare what was a valid signature for filing. The secretary of the Treasury then delegated that authority to the commissioner of the IRS.
Things like smart cards and biometric readers offer an advantage for other reasons, not just filing your tax return. You're going to use them to buy things over the Internet and sign contracts electronically. Once you've engaged them for those purposes, you're not going to want a whole other process to file your tax return.
Consumer demand and interest could lead the IRS in the future to accept smart-card or biometric-originated authentication, simply because consumers will use it for all sorts of other commercial transactions.GCN:
What could other agencies learn from the IRS' e-filing experience?BARR:
First and foremost is the understanding of exactly what the value and the benefits to the citizen are. In the early days of e-filing, it cost some extra money to file electronically vs. a stamp.
These days, tax preparers and tax software companies just offer electronic filing free as part of their product or service.
One of the things I engaged when I joined the IRS was some aggressive market research to understand what motivates taxpayers. In the case of electronic filing, it was a faster refund. Seventy percent of the population gets a tax refund, and 70 percent of the population would love to have the money in the bank in 10 days rather than 10 weeks.
Another thing we learned was to give taxpayers an acknowledgement that their returns were received. A third lesson would be public-private partnership. We aggressively worked with tax software companies, banks and financial institutions looking for ways to grow, ways to provide more products and services taxpayers. We formed an advisory committee. I appointed 20-plus people from the private sector to sit on that panel.
Another lesson was keeping oversight organizations in the loop. I engaged in an aggressive campaign of making sure that everybody in Washington knew what I was doing, from the General Accounting Office to the Office of Management and Budget to the Hill to the Treasury Department to the White House to consumer groups. I made sure everybody knew all the time where I was going and why I was making the decisions I was making, so there were no surprises.GCN:
What technology trends do you see among Dell's federal customers?BARR:
It turns out that the IRS is a major Dell customer.
If you look at the overall federal market, there's a move toward wireless and mobile environments, so that you do not have to wire and rewire buildings all the time when you move somebody. We're also seeing more movement to notebook PCs from desktop PCs, especially when they're secured with biometrics, smart cards and so forth.GCN:
Do you think Linux is gaining ground on Microsoft Windows?BARR:
We're equally committed to both platforms. We think Linux is solid, and there are reasons one would choose one approach over the other. We're seeing increasing adoption of Linux over the core Unix per se. I don't see it as an NT-to-Linux move as much as Linux replacing proprietary Unix