Tax Systems Modernization: Comments on IRS' Fiscal Year 1994 Budget Request

GAO discussed the Internal Revenue Service's (IRS) Tax Systems Modernization (TSM) program's fiscal year (FY) 1994 budget. GAO noted that: (1) the FY 1994 TSM budget will increase 25 percent and total $717 million; (2) over 80 percent of the TSM budget is for equipment and services and significant increases in staff; (3) the appropriateness of TSM funding is questionable because IRS has not sufficiently supported its deployment plans for four interim systems; (4) the IRS program cost estimate of $23 billion could be unreliable due to inaccurate funding requests and an irregular spending pattern; (5) TSM may not meet its overall objectives of reducing taxpayer burden, generating additional revenue, and improving productivity, since IRS has not implemented an adequate program management approach, established TSM technical foundation requirements, or workforce requirements; and (6) IRS needs to improve TSM program management by controlling and stabilizing TSM near- and long-term implementation phases, determining TSM operational capabilities, approving TSM transition, deployment, and spending plans, establishing a sound technical foundation, and establishing workforce needs and skill levels.