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IRS
ees have to code workarounds to help IMF link to outside systems and enable the rapid pull of individual taxpayer files for systems such as “Get Transcript.”
For the foreseeable future, the approach is to slowly keep adding to CADE-2’s capabilities in an attempt to wean the IRS off IMF. The Treasury Department has a target completion date of 2022, though the caveats are crucial: Treasury does not assert that CADE-2 will completely replace IMF, two of CADE-2’s component projects are behind schedule, and offi- cials such as Naik are reluctant to commit to a hard deadline.
“All systems have to be up, so if we are going to implement any change, it’s going to be on a gradual basis,” Naik said.
Watchdogs agree that quick, total fixes aren’t an option. Instead, the question facing the IRS is, “Can you make a switch while everything’s moving? And oh, by the way, you’ve got tax code changes in the 11th hour,” said Dave Powner, director of IT management issues at the Government Account- ability Office. “It’s hard.”
Filling Uncle Sam’s coffers on a shoestring
According to the IRS, the obvious problem is money. Although it collects the revenue that funds most of the government, the IRS has been significantly hamstrung by a Republican- controlled Congress for the past few years.
When asked during a recent budget hearing for his one IRS-fixing wish, Koskinen said, “If we could just have stable, sustainable funding for this agency before I leave, I’d feel like I accomplished something.”
The agency’s fiscal 2017 budget request of $12.3 billion would put the IRS at the same funding level it had in 2010. Skeptical lawmakers have signaled they might not be willing to grant even that request.
“It was constraining when I was there,” said Spires, who left the IRS in 2008 and noted that the agency’s budget has been further tightened since then.
But Republicans still smarting over the IRS’ investigation
of conservative groups’ tax-exempt status have accused the IRS of wasting money and, as Koskinen once put it, “doing less with less.”
“The resources are there on the customer-service side,” said Rep. Peter Roskam (R-Ill.), chairman of the House Ways and Means Committee’s Oversight Subcommittee. “They have been misallocating that.”
Roskam asserted that the IRS has pushed phone service to dramatic lows. In 2015, only 37 percent of callers got through to the IRS -- after an average hold time of 23 minutes, accord- ing to IRS Taxpayer Advocate Nina Olson. Nearly 9 million people experienced “courtesy disconnects.”
In a report published last year by Roskam’s committee, Republicans cited the IRS’ annual spending on bonuses ($60 million) and employee time spent on union activities (nearly $21 million) as egregious misuses
of funds.
The report also notes that the
IRS takes in half a billion dollars
in user fees each year, which it can spend as it likes. In 2015, the agency reduced the amount of the fee revenue that went to taxpayer services by more than $100 million, opting to apply it to operations support instead.
One route to improved budget management is careful con- gressional oversight. In February 2015, GAO hammered the IRS for spotty reporting of its IT investments’ cost, scope and schedules. Powner said another GAO report on IRS technol- ogy will be released in May or June.
“We see a lot of room for improvement” when it comes to reporting and budget management, said Powner, adding that the IRS still has a lot of money to play with despite budget cuts.
In the early 2000s, the IRS was obligated to file exhaustive expense justifications with GAO and Congress. That require- ment is no longer in place, but Congress took a step toward tighter management with the 2016 omnibus spending bill.
A BRIEF HISTORY OF IRS IT
1962: Individual Master File is operational. IRS begins automatic data processing.
1997: IRS admits to wasting $4 billion on modernization efforts.
1978: President Jimmy Carter halts database networking effort over privacy concerns.
“Fifteen years ago, if you’d said 85
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1989: Tax Systems Modernization effort kicks off.