IRS delays CADE until 2004

IRS delays CADE until 2004

The first phase of an IRS program to modernize the Customer Account Data Engine for master files will not get under way 'until the March or April time frame' during the 2004 tax filing season, an IRS spokesman said today.

An initial group of 6 million 1040 EZ filers were supposed to have moved to the new system in 2001, but delays postponed that (see story at www.gcn.com/22_17/news/22651-1.html).

'This most recent setback is a serious matter,' IRS commissioner Mark Everson said in a statement. 'These delays are particularly disturbing, since the General Accounting Office continues to view [tax] modernization as a high-risk area.'

The service has launched an independent review of the program's progress by the Software Engineering Institute of Carnegie Mellon University. SEI will report back to the IRS in 60 to 90 days, Everson said. The IRS Oversight Board also will assess CADE, reviewing the Prime contractor consortium's performance and the agency's management of the Prime contract over its four-year history.

CADE, a modern database management system, will house tax information for more than 200 million individual and business taxpayers. It will replace a 40-year-old Master File magnetic tape system that now takes a week to update, causing delays in providing accurate account information to taxpayers, Everson said. CADE also is supposed to speed refunds with daily postings of transactions and account updates.

After several delays by the Prime contractor alliance that is coordinating the modernization effort, the IRS had pushed transition of the first group of filers back to August 2003 and renegotiated the cost-plus contract to a firm-fixed price contract.

The most recent glitch, however, would force the launch too close to the agency's fall time frame for programming 2004 filing season changes. Consequently, the IRS decided to implement CADE during the 2004 filing season.

In fiscal 2003, the IRS budgeted $33 million for CADE out of the $422 million total for all modernization efforts. In 2004, the agency currently plans to spend $84 million on CADE out of a total $458 million.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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