Summary: If the Internal Revenue Service (IRS) is unsuccessful in making its information systems Year 2000 compliant, taxpayers could be faced with millions of erroneous tax notices and delayed or incorrect tax refunds. GAO cannot provide a complete picture of the Year 2000 status of IRS' 133 mission-critical systems because IRS does not report Year 2000 status for these systems in their entirety. Instead, IR monitors the Year 2000 status of the components of an information system, such as the application software, systems software, and hardware, for each of its three types of computers -- mainframes, minicomputers/file servers, and personal computers. IRS reports that it met the January 31, 1999, completion goal for some of the areas that it monitors but not for others. As a result of not meeting the goal for upgrading systems software and hardware, some change will not be testing until late in 1999, reducing the time available to make corrections before the turn of the century. Also, for the replacement project, some service center staffs will have no experience using the new system to process peak filing season volumes of remittances. In addition to completing work on upgrading systems software and hardware, IRS faces to remaining, critical Year 2000 tasks. First, IRS must conduct an unprecedented, Year 2000 end-to-end test of most of its mission-critical systems. Second, IRS must develop 36 contingency plans that it has determined are needed to address failure scenarios for its core business processes. As IRS continues its Year 2000 efforts, it will face the challenge of how to address the competing demands on its staff.
