Oversight board: Modernization, training can help IRS

IRS Oversight Board 2006 annual report

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The Internal Revenue Service’s success in meeting taxpayer needs and shrinking the looming tax gap largely hinges on its modernization and a better trained workforce, according to a new annual report.

The IRS Oversight Board found several disconcerting problems within the agency. The IRS depends on archaic tools to perform critical jobs, and it faces daunting information technology infrastructure problems, the board found. Moreover, workforce training remains one of the IRS’ biggest challenges, according to the board's 2006 annual report.

“IRS modernization is still very much a work in progress,” the board concludes in the report. “The job is far from complete, and tax administration is continually evolving to reflect changing tax laws, trends and new technology.”

The tax gap — the difference between what taxpayers owe and what they pay — is $290 billion, based on 2001 tax returns. The gap was at $345 billion before the IRS collected $55 billion in due taxes, the report states.

But the IRS can cut the gap further with modernization and focusing on its workforce.

Although the agency has a plan focused on its employees, the report states that officials should search for innovative ways, such as telework, to build its workforce. The board also suggested hiring retired workers and developing recruiting tools.

Employees need more training because many experienced workers are nearing retirement, a problem much of government faces. Although the IRS urges e-learning, many staff members agree that the agency should find mentors and trainers for new and inexperienced employees, the board has found.

In addition, the IRS has a backlog of aged IT infrastructure. Private-sector companies have learned that outdated equipment increases maintenance costs and consumes time that employees could spend on their jobs. Moreover, data protection in an increasingly electronic environment demands that the IRS use up-to-date technology as the safeguard, the report states.

The board applauded the IRS’ IT Modernization Vision and Strategy plan, which the agency introduced in October 2006. IRS officials said the new strategy features smaller projects more frequently, along with more agency consensus. The board believes this course is critical to systems modernization, according to the report.

The board reiterated its disapproval of any decrease in modernization funding. Cuts will delay improvements, forcing the IRS to use older systems.

With modernization, tax law enforcement and customer service will improve the IRS, the board and others have said.

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