LOW-TECH IRS.

Abstract

The state of the Revenue Service's efforts to modernize its overall operations is in danger of being ultimately Ineffective because the agency lacks technical expertise and experience in managing such a project; according to a report prepared by the National Research Council. The IRS's tax system modernization (TSM) initiative encompasses a complete reengineering of the agency over a decade at a cost estimated at more than $8 billion, with major components targeting electronic tax return filing, telephone filing, and document processing. The report recommended the IRS take strong steps to recruit a high caliber, experienced manager of large systems from the private sector. Moreover, unless the IRE confronts its TSM problems squarely, the report warned that the resulting system will be significantly less effective in processing tax returns and will carry a greater risk of violating taxpayer privacy.