IRS holds back future CADE, accounting system releases

The IRS is delaying future releases of its new taxpayer database, the Customer Account Data Engine, in order to get the initial version out successfully, presumably this year, CIO Todd Grams said.

'We're slowing down work that we otherwise would have done in 2004 on Release 3 of CADE,' which will process filings of taxpayers who have a balance due, Grams said yesterday in an interview. (Click for GCN coverage)

The first two CADE releases will process returns that require refunds or break even. The first release will apply only to Form 1040EZ filers. Release 3, aimed at taxpayers who owe money, intensifies the project's complexity because of the necessary system interfaces and the way it will be used by tax administrators. IRS will continue work on CADE's first two releases this year on a revised schedule, he said.

The tax agency will also tap the brakes on the second release of the Integrated Financial System, which keeps accounts of the value and depreciation of IRS property, equipment and capital. The first release of the core accounting system should come in April.

Paring the number of modernization projects was one of the recommendations the IRS Oversight Board made last month to halt several years of budget-blasting schedule overruns.

'Our eyes were simply bigger than our stomach,' Grams said. The board also prescribed an action plan for Computer Sciences Corp., lead contractor of the Prime alliance, which is implementing the Business Systems Modernization plan. The board said CSC had better get it right this time or lose the contract (Click for GCN coverage).

'It's basically time to put up,' Grams said. CSC must deliver IFS this spring, and CADE once a definite target date is decided. 'If they don't do those things, then we'll be considering other options,' he said. 'If they do meet them, then we'll know the action plan worked, and we'll continue to make improvements and go on.'

IRS is already seeing benefits from initial steps taken as part of the action plan, Grams said. CSC has instituted a process to elevate issues for faster resolution and has assigned a new leader to the IFS project'someone who is very experienced with such projects and with the SAP accounting product, Grams said. He added that the personal engagement of CSC president and chief operating officer Mike Laphan is encouraging.

IRS will conduct an operational pilot before going live with the first release of CADE. 'We will make sure we have actually ramped up and processed actual tax returns before we turn on the switch,' Grams said.

CADE Release 1 could debut in the filing season just starting. 'It depends on what month in '04 we think we can have CADE up and running,' he said. 'If it's late in the year, it won't make sense to use it to process returns in this filing season. If it's early enough in the year to use in '04, we'll use it. If not, then the first time we use it will be in the '05 filing season.'

Filers who get extensions keep sending returns as late as October, although the season ends in April.

'It simply doesn't make sense to turn it on [that late] because you have the beginning of the '05 filing season right around the corner,' Grams said. IRS begins preparations for the next year's filing season in the fall, hiring and training seasonal workers and applying tax law changes to its software.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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