IRS to review modernization program

The Internal Revenue Service might consider slowing future releases of its modernized database even as the system is making significant progress on the number of tax returns and refunds it processes.

The Internal Revenue Service might consider slowing future releases of its modernized database even as the system is making significant progress on the number of tax returns and refunds it processes.

The Customer Account Data Engine (CADE) is the foundation for the modernization of many IRS systems to improve customer service and compliance. But the agency’s new commissioner, Douglas Shulman, and chief technology officer, Terence Milholland, have asked for a review of key technology projects, IRS spokesman Terry Lemons said last week.

“This process is designed to assure effective and efficient use of taxpayer dollars,” Lemons said. “That’s sound tax administration from our standpoint.”

The upcoming CADE release, which will be in operation for the 2009 tax-filing season, is on track for launch in January, he said. Work will then begin on the release for the 2010 season. “Beyond that, it’s premature for us to get into specifics,” Lemons said.

Computer Sciences Corp., the CADE contractor, will cut jobs from the program in January, according to a company spokesman.  
In the 2008 tax-filing season, IRS used CADE to process more than 30 million tax returns, or 21 percent of individual returns, and generated $44 billion in refunds, IRS said. In 2007, CADE handled 11.2 million returns.

The IRS Oversight Board, an advisory panel, believes that having a modernized data management system to handle taxpayer accounts in an accurate and timely fashion is an essential business capability for IRS, said Paul Cherecwich, the board’s chairman.

In a report released in September, the Treasury Inspector General for Tax Administration said the demands on CADE are rapidly reaching the current system’s capacity.

About the Authors

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

Mary Mosquera is a reporter for Federal Computer Week.

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