Hill gives $35M for initial IRS modernization

Congressional leaders today gave the Internal Revenue Service the go-ahead to spend $35 million on the first phase of its mammoth computer modernization project.

The release of funds allows the IRS to begin planning the Prime Systems Integration and Services Contract program, estimated to be worth $5 billion over 15 years. Leaders of the House and Senate appropriations committees approved the spending. Given a history of unsuccessful modernization attempts at the IRS, congressional leaders had been withholding money until they were satisfied with the IRS' plans for the Prime program.

The approval for the spending closely follows a General Accounting Office report that praised the IRS' modernization plans.

"This partnership approach with Congress has helped us clear the early hurdles of technology modernization and puts us on track for creating a new system that works," IRS Commissioner Charles Rossotti said in a prepared statement.

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