Summary: The Internal Revenue Service (IRS) has developed a vision for 2001 that calls for organizational, technological, and operational changes affecting the way in which the agency processes tax returns, provides customer service, and ensures compliance. IRS has made progress in modernizing its operations, but the differences between IRS' existing operations and those proposed in its vision are great. IRS has made little progress either in reducing the number of paper returns it processes or in delivering the new systems needed to better process paper. In addition, taxpayers have long had difficulty reaching IRS by telephone. And, when they do reach IRS assistors, they do not always receive the information they need. Although IRS has developed a promising strategy to improve customer service, the agency faces many challenges in implementing it. IRS is seeking to boost compliance to 90 percent by 2001. However, this goal relies on a set of assumptions that have since changed significantly. GAO questions IRS' ability to make sound investment decisions until it reengineers important processes, such as tax return processing. Until clearly defined business requirements drive Tax Systems Modernization projects, there is no guarantee that these projects will successfully improve IRS operations.
