IRS Can Expand and Improve Computer Processing of Information Returns

FGMSD-81-4: Published: Oct 20, 1980. Publicly Released: Oct 20, 1980.

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GAO reviewed the information document matching program of the Internal Revenue Service (IRS) to: (1) determine the progress made; (2) assess the adequacy of IRS computer capabilities for a full matching program; (3) determine the feasibility and costs of upgrading IRS computer capability; (4) determine the general status of IRS computer capabilities; and (5) identify any other problem areas related to the IRS management and use of computers.

IRS has made considerable progress toward achieving a full document matching program, but still does not use millions of information returns. About 79 percent of the information returns received for tax year 1978 entered the processing cycle for the matching program. IRS has sufficient computer capacity to process all of the information returns, but additional funding and personnel are needed to transcribe the returns and follow up on unreported income. IRS plans to replace much of its computer equipment under a 3-phase replacement program that will cost an estimated $218 million over 8 years. This replacement and conversion to machine independent software offers the potential to improve IRS computer operations. An opportunity exists to expand the use of information returns by reducing the need for transcription by obtaining returns in computer-readable form and by cooperating with the Social Security Administration. IRS use of its data processing systems could be improved by improving the design of the information returns system and by better matching job requirements to computer resources.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Commissioner of Internal Revenue should require the automatic data processing performance evaluation staff to develop a comprehensive resource-need-based workload scheduling and management system to improve computer productivity at the National Computer Center.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Commissioner of Internal Revenue should redesign the information returns processing system to improve efficiency along the lines recommended in the IRS draft report entitled "System Design Recommendations for and Improved Information Returns Program," August 1979.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Commissioner of Internal Revenue should investigate the use of optical character reader equipment to transcribe non-wage paper information returns, possibly through equipment sharing with SSA.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Commissioner of Internal Revenue, in cooperation with SSA, should seek ways to increase the filing of information returns on computer-readable media.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  5. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Commissioner of Internal Revenue should do a feasibility and cost-benefit study of a redesign, and development in higher level language, of the business and individual master files and related applications presently written in machine-dependent languages.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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