IRS still lacks skills to modernize systems

Despite some progress, the Internal Revenue Service still lacks the ability to effectively modernize its tax systems, according to a report released last month by the General Accounting Office.

For more than a decade, the IRS has been attempting to modernize its outdated, paper-intensive approach to tax return processing. In December, the IRS awarded its multibillion-dollar Prime contract for systems modernization to Computer Sciences Corp.

Because of the importance and high cost of the modernization and the fact that GAO's key recommendations still remain open, the report categorizes the IRS' systems modernization effort as a high-risk program. In its report, part of a GAO series on "Major Management Challenges and Program Risks" at federal agencies, GAO recommends that the tax agency account for changes in system requirements and priorities caused by the IRS' organizational restructuring and change to accommodate new technology and to implement the IRS Restructuring and Reform Act of 1998 requirements.

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