IRS rings up $200 million for modernization

The Internal Revenue Service received an infusion of $200 million to move

ahead with a modernization program that will turn a paper-driven agency

into a paperless one.

The IRS announced Tuesday that Congress has released the latest installment

of funds to overhaul its aging legacy system.

"A lot of work remains, but we are encouraged by our initial efforts

and the continuing support from Congress and other oversight groups," said

Paul Cosgrave, chief information officer at the IRS.

The $200 million will be used to complete projects that include designing

ways to guarantee security and privacy. It also will be used to begin installing

a new accounting system — the first step toward an integrated financial

management system to help improve financial controls.

Congress also approved releasing $15 million, included as part of the

$200 million, for a management reserve fund to make sure modernization doesn't


The $200 million comes from a $577 million fund previously set aside

by Congress and released only after an intensive review of how it will be

spent. So far, $448 million has been released. The procedure was set up

after the IRS spent $3 billion trying to modernize its systems in the 1990s

and abandoned the program.


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