Summary: The Internal Revenue Service (IRS) has for years struggled to collect the nation's tax revenue using outdated processes and technology. The result has often been inefficient and ineffective programs that are prone to waste, fraud, abuse, and mismanagement. Of particular concern are IRS' efforts to modernize its tax systems, manage its administrative and revenue accounting systems, identify and collect taxes owed the government, detect and prevent the filing of fraudulent tax returns, protect the confidentiality of taxpayer information, and prevent the disruption of services because of computer malfunctions. At a minimum, IRS needs an implementation strategy that includes both cost-benefit analyses and reasonable estimates of the extent, time frames, and resources needed to correct its high-risk vulnerabilities. IRS also needs to (1) better define, prioritize, and manage new information systems; (2) ensure that its administrative and revenue accounting systems fully comply with government accounting standards; (3) design and implement both administrative and electronic control to protect taxpayer data from unauthorized access; and (4) develop performance measures that will allow its managers, Congress, and GAO to track its progress. Above all, IRS management needs to sustain an agencywide commitment to solving the agency's high-risk problems.
