IG: Modernization is IRS' top challenge for 2007

Inspector general's memo to Treasury Secretary

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The Internal Revenue Service’s Business Systems Modernization program ranked as the top challenge facing the agency in fiscal 2007, according to a memo by the Treasury Inspector General For Tax Administration.

To succeed with BSM, IRS officials need to do a better job of managing BSM's processes and its increasing complexity and risks, wrote J. Russell George. The department needs to provide the program enough resources and contractors must be held accountable for their performance, the memo states.

The IG added that the modernization program needs continuity and strategic direction with experienced leadership, according to the Oct. 2 memo.

The IRS named Richard Spires as its new chief information officer Sept. 17. Spires had been the associate CIO who oversaw the BSM program. In a recent interview, he said he would continue to focus on the agency’s modernization.

The IG's list of the IRS' top management and performance challenges for fiscal 2007 is similar to last year's list. George believes he could not remove any of the IRS’ management challenges for fiscal 2007, according to his memo. Although the IRS has addressed the areas highlighted last year, they need more attention, George wrote.

The IG also wrote that information security is a priority as millions of taxpayers entrust sensitive information to the IRS. The risk of having that information compromised is increasing, he wrote.

The risks are caused by internal factors, such as connectivity of the computer systems and use of portable laptop computers. External factors come from terrorists and hackers, the memo states.

The IRS created an enterprisewide approach in fiscal 2006 to protect its information and meet the Federal Information Security Management Act requirements.

Achieving the results will take time, George stated.

IRS’ changes have not yet increased measurements in the President’s Management Agenda, he wrote. IRS lacked in certification and accreditation and tracking security vulnerabilities.

He wrote that the inspector general’s FISMA evaluations and audits show that officials have not paid enough attention to security.

The other challenges George listed include:

  • Employing tax compliance initiatives to collect the correct amount of tax from businesses and individual taxpayers.

  • Ensuring that tax-exempt entities comply with applicable laws to qualify for the status.

  • Providing quality service.

  • Simplifying the tax system.

  • Using performance and financial information for program and budget decisions.

  • Stopping improper payments.

  • Designating resources to taxpayer protections and rights.

  • Having the ability to process returns and make changes to tax law during the filing season.

  • Addressing concerns about the IRS’ aging workforce.

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