Tax System Modernization:

Management Mistakes Caused Delays in Automated Underreporter System

IMTEC-90-51: Published: Jul 10, 1990. Publicly Released: Aug 8, 1990.

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Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) Automated Underreporter System.

GAO found that: (1) IRS management mistakes caused the pilot system to be delayed for more than 2 years; (2) IRS has deferred the pilot system to October 1990 because of inadequate system design and limited technical and project management expertise; (3) IRS believed that the system was an important training ground for IRS automation modernization; (4) IRS decided to develop and deliver a separate interim system as a near-term solution for 10 service centers because the system was continuously delayed; (5) IRS presented the system as a tax modernization project, but developed it as an independent system; (6) available information indicates that most of the system's functions will require modifications before working with other modernization projects; and (7) there were instances where projects failed or were seriously delayed as a result of poor management decisions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: IRS has compared development documents of the interim system to AUR and will salvage as much of the software code as possible. Common functional modules are being identified by IRS and the AUR software developer for transferability from the interim system.

    Recommendation: To address the problems experienced by IRS in developing the Automated Underreporter System, the Commissioner of Internal Revenue should immediately direct the Chief Information Officer to assess the option to save development costs by using the interim system as the starting point for completing the Automated Underreporter System.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: Milestones have been established and IRS is satisfied that all can be met on schedule.

    Recommendation: To address the problems experienced by IRS in developing the Automated Underreporter System, the Commissioner of Internal Revenue should immediately direct the Chief Information Officer to establish realistic milestones on which both the users and Congress can rely.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: IRS has expanded--by a factor of six--the staff and expertise in-house augmented with a large vendor contingent.

    Recommendation: To address the problems experienced by IRS in developing the Automated Underreporter System, the Commissioner of Internal Revenue should immediately direct the Chief Information Officer to verify that staffing needs have been properly addressed.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed - Implemented

    Comments: IRS has expanded--by a factor of six--the staff and expertise in-house augmented with a larger vendor contingent.

    Recommendation: In light of the broader IRS need for enhanced technical expertise and experience for its overall modernization efforts, IRS should assign experienced technical, procurement, and managerial staff to key positions for system development projects at the outset. Such staff should have demonstrated capabilities in all phases of the system development life cycle and have demonstrated successful delivery of systems.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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