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The Internal Revenue Service's (IRS) Business Systems Modernization (BSM) program is a multibillion-dollar, high-risk, highly complex effort that involves the development and delivery of a number of modernized information systems that are intended to replace the agency's aging business and tax processing systems. BSM funds are not available until IRS submits an expenditure plan that meets various conditions to congressional appropriations committees for approval. In January and July 2004, the Department of the Treasury submitted IRS's initial and revised fiscal year 2004 plans, respectively. As required by law, GAO reviewed the plans to (1) determine whether the plans satisfied the conditions specified in the law, (2) determine what progress IRS had made in implementing our prior recommendations, and (3) provide any other observations about the plans and IRS's BSM program.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service 1. The Commissioner of Internal Revenue should direct the Chief Information Officer to ensure that, after BSM projects are deployed, post-implementation reviews are performed that include an analysis of quantitative and qualitative investment data to determine, at a minimum, whether expected benefits were achieved.
Closed - Implemented
IRS developed a new procedure for conducting post-implementation reviews (PIRs) compliant with established federal guidance, that, among other things, focuses on outcomes related to expected business benefits. In March 2008, we reported that, due to resource constraints and other priorities, IRS stated that it planned to conduct streamlined PIRs on releases of its Customer Account Data Engine and Account Management Services project releases 12-18 months after those releases are deployed, and lessons learned activities for other systems. Since then, IRS conducted PIRs on the Customer Account Data Engine releases 2.2 and 3.1, which documented major findings and discussed customer and user satisfactions, benefits achieved, lessons learned, and improvement opportunities. Additionally, according to IRS, PIRs were started at the end of fiscal year 2008 for Accounts Management Services releases 1.1 and 1.2A and were scheduled to be completed in December 2008. Finally, IRS is now requiring lessons learned activities to be conducted for all projects that follow its Enterprise Life Cycle system development methodology.

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