IRS presses its paperless project
- By Judi Hasson
- Nov 05, 2000
The Internal Revenue Service, flush with money and new ideas for digitizing
customer service, is turning up the heat on its huge modernization project
called IRS Prime — a program to turn a paper-driven department into a seamless
electronic one over the next decade.
By the end of the year, the IRS will unveil a new blueprint for modernizing
its information systems and providing a complete suite of services online.
The program, an update of a 1997 plan, will provide a road map for the next
two or three years as well as a model for an "ideal IRS."
The IRS launched the Prime program in December 1998 with the award of
a 15-year contract to Computer Sciences Corp. Initially, the program was
focused on improving the systems used to process tax documents and handle
customer queries. The updated strategies, however, will reflect the agency's
interest in taking advantage of internal systems modernization to move services
online, according to Bert Concklin, IRS business systems executive. Still,
the agency is proceeding carefully.
"Society is getting much more accustomed to transactions across the
Internet, but nobody really knows at what rate the majority of our population
conducts personal and professional business online," Concklin said.
Concklin, hired earlier this year to help move the IRS toward providing
more electronic services, said the blueprint is not the only project on
the drawing board. The agency is developing a long-term strategy, to be
unveiled in March, spelling out the IRS vision for the Digital Age over
the next decade. It will include details for several new projects and a
plan for the IRS architecture.
In addition, taxpayers will see the first sign of modernization in February
when the IRS launches a $38 million automated telephone system to give customers
Two of the most important Prime contracts will be awarded next spring,
Concklin said, when the IRS moves more quickly toward a digital system.
One of the contracts — a $50 million to $100 million project — will
focus on replacing the IRS' tape-based master file system, which stores
taxpayer records, with a digital system that will allow faster access to
information and be easier to manage.
Another contract, worth $15 million to $30 million, will create more
electronic services, using the Internet to replace existing manual and mail-based
systems for taxpayers and tax preparers.
Overall, the IRS is expected to receive $72 million for modernization
next year, less than the $119 million requested.
"While it is not all the funding requested, it is a big push forward
for IRS modernization," said Olga Grkavac, executive vice president of the
Enterprise Solutions Division at the Information Technology Association
But more money is available if needed. Congress set up a complex funding
mechanism to make sure the money for modernization is properly spent and
established an Information Technology Investment Account that the IRS can
draw from with congressional approval. Fiscal 2001 funds will bring the
account to $330 million, and the IRS expects to draw out $200 million for
proj-ects in 2001.
Nearly everyone agrees that IRS modernization is long overdue. IRS Commissioner
Charles Rossotti said in a September report on the progress of the program
that the tax system is still "critically dependent on a collection of obsolete
computer systems...[that] are fundamentally deficient."
Pete Sepp, vice president of communications at the National Taxpayers
Union, which is usually critical of anything the IRS does, agreed that changes
are needed, but he questioned whether pouring more money into the project
is the answer.
Taxpayers are already seeing signs of change. More than 34 million taxpayers
filed their returns online for the 1999 filing season, and the number of
e-filers is expected to grow dramatically for 2000.
"We started seeing things happen this year, and for the next filing
season, we'll see even more," said Paul Cosgrave, chief information officer
at the IRS. "But we believe the program will take the entire decade. But
this year is the first year we'll be getting into some heavy spending."