Modern IRS on track

The Internal Revenue Service's modernization program is on track, with plans

to phase in a master database that will enable the IRS to keep track of

each contact the agency makes with taxpayers.

At a briefing last week on the status of the 10-year plan, IRS officials

said their blueprint for modernization is "holding together" as the tax

agency undertakes the biggest information technology overhaul in government

history.

"This program is one of the most significant public/private partnerships

going on," said Paul Cosgrave, the IRS chief information officer.

Working with its prime partner, Computer Sciences Corp., the IRS has

developed a plan to phase in a master system that will replace a decentralized,

tape-based program created in the 1960s. The program is so antiquated that

one IRS clerk wouldn't know if another clerk talked to a taxpayer, even

if the contact happened on the same day.

The IRS will start by putting at least 6 million tax returns into the database

by 2003. Taxpayers who filed electronically in 1999 will be first, and the

agency plans to phase other taxpayers into the system each year.

The troubled agency has known many ups and downs in its efforts to modernize.

It spent more than $3 billion on the Tax Systems Modernization program

before it was declared a failure. Nevertheless, Cosgrave said, Congress

is fully behind the new project and has not balked at providing money for

it. The IRS is seeking $119 million in the fiscal 2001 budget. The program

is expected to run into the billions of dollars and take 10 to 15 years.

"A 10- to 15-year time period would be a yawning gap in the private

sector. It would probably take a similarly sized firm about half the time.

By the time they are done, they could very well be in the same obsolete

position," said Pete Sepp of the National Taxpayers Union, a citizen watchdog

group.

Under the current system, the IRS cannot even keep up with all the phone

calls from taxpayers — phones go un-answered about 30 percent of the time.

Modernization plans include better phone communications.

Signs that the IRS is on the right track can be found in the satisfaction

rate among people who deal with the agency online: 75 percent, which is

far higher than the 51 percent satisfaction rating registered by taxpayers

who deal with the IRS on paper, according to Katie Hirning, deputy director

of the National Partnership for Reinventing Government.

William Matthews con-tributed to this article.

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