GAO: IRS halts development of Customer Account Data Engine

Since fiscal 2005, the majority of federal tax returns have been filed electronically, saving the IRS thousands of staff-years of processing time.

Through May of this year, the busiest portion of the 2009 tax filing season, the IRS processed 127 million returns, 91 million of them (72 percent) filed electronically, according to an interim report on the filing season by the Government Accountability Office. This is a continuation of a steady increase over the last decade in electronic filing, from about 20 million returns filed electronically in 1999, and about 100 million paper returns.

During that same period, the number of staff-years required to process returns has dropped from about 4,600 to about 2,225, although the overwhelming majority of time still is devoted to paper returns.

But the IRS has halted development of its Customer Account Data Engine (CADE) because of unexpected complexities, GAO added.

CADE is a part of the IRS Business Modernization Program that is intended eventually to replace the legacy Master File processing system and enable faster refunds. Because CADE posts information daily, direct deposit refunds are issued one to five business days faster than with the Master File system, and paper checks are issued four to eight business days faster. CADE processed 30.3 million returns last year, up sharply from the 11 million returns processed in 2007 and exceeding the agency’s goal for 2008 of 30 million returns. Through May of this year, CADE processed 38.6 million returns, an increase of 28 percent.

“Future growth is uncertain, given that IRS has stopped work on CADE while rethinking its strategy for managing taxpayers’ accounts because of concerns over increasing complexities in system development,” GAO said.

Traffic to the IRS Web site was up about 10 percent this year, with more than 205 million visits and 107 million forms downloaded. But another problem area for the IRS was its telephone-assistance program. The percentage of callers who receive assistance over the phone has decreased steadily over the last few years, from 82.4 percent in 2007 to 65.5 percent this year. At the same time, the average wait for each caller has more than doubled, from 4.2 minutes in 2007 to 8.5 minutes.

The IRS had set its goal for telephone assistance at 82 percent of callers in recent years, but dropped that goal to 77 percent this year because of what the agency called “resource trade-offs.”

Although the number of calls answered increased to more than 20 million in 2009, from 16.7 million in 2007, the total number of calls went from 47 million to 66.2 million and the number of abandoned calls jumped from 10.4 million to 17.8 million.

The higher than expected volume of calls was generated in part because of changes in the tax laws and the economic stimulus program.

About the Author

William Jackson is a Maryland-based freelance writer.


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