Bigger hurdles await IRS plan

Bigger hurdles await IRS plan

The IRS modernization plan is headed in the right direction, but the agency is just now getting to the hard part, according to Larry Levitan, chairman of the IRS Oversight Board.

Levitan sees a number of obstacles on the road to modernization.

'The challenge now is executing the plan,' he said. 'That is always the most difficult part of the change process. It's always easier to identify the problem than it is to execute and fix the problems.'

The job of the Oversight Board is to help guide the IRS past such obstacles.

The panel includes Levitan, IRS commissioner Charles O. Rossotti, Treasury Department Secretary Paul O'Neill, and six other members from the private sector.

'Now, you can argue that the last thing the IRS needs is one more body providing oversight,' Levitan said. 'But there are differences. We operate more at the strategic level of operations. We are more akin to a corporate board of directors than we are to an audit organization such as Treasury Inspector General for Tax Administration or the General Accounting Office.'

While Rossotti and O'Neill are already familiar with the IRS, some other members of the board have had to learn about the large, complex organization of the IRS, said Levitan, a retired partner from Accenture LLP of Chicago.

The current members of the panel were assembled in September last year. They will serve a five-year term.

'Our early job was really to get up to speed,' he said. 'Some members had some significant experience with the IRS. Most of us had very limited experience or no experience with the IRS.'

The IRS and Treasury held training sessions and also developed reading material as board members worked to familiarize themselves with the agency.

As their learning curve improves, they'll be better able to carry out their mission, Levitan said.

'The board will become more and more effective over the years as we develop more and more experience,' he said.

Members of the board have formed modernization, personnel and organizational, and performance management committees.

'The area we have spent the most time on is the budget process,' Levitan said. 'We had a direct responsibility to recommend the budget by about February, and we had to jump in that pretty quickly.'

While some of the board's members have had to learn about the modernization project, others bring skills from their positions in the business world.

'The objective is to bring to this oversight capability significant private-sector experience so that we could bring some of the best practices of the private sector to the IRS,' he said.

Levitan plans to create a small but highly effective staff to support the board.

'We have a plan to expand the staff group to probably about eight to 10 people over time,' he said. 'That will provide us with the ability to do some independent analytical work and use more effectively the work done by other oversight groups.'

Members of the board serve the panel on a part-time basis. Their other responsibilities often leave them with little time to study the hundreds of audits, reviews and studies done by GAO and Treasury auditors.

An expanded staff will be able to work on an ongoing basis with other review bodies and get information that will allow the board to do a more effective job, Levitan said.

'We want to make sure that the IRS had a good [modernization] plan in place to address and fix those problems and that they were executing that plan effectively,' he said.

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