GAO Reports  
AIMD-96-106 June 07, 1996

Tax Systems Modernization: Actions Underway But
IRS Has Not Yet Corrected Management & Technical Weaknesses
(Summary only)

GAO reported last year that the government's $8 billion tax systems modernization effort was plagued by pervasive management and technical weaknesses. Although the Internal Revenue Service (IRS) has taken steps to overcome these shortcomings, none of these actions, either individually or collectively, fully satisfy GAO's recommendations, and it is unclear when these actions will result in disciplined systems development. The upshot is that IRS continues to spend hundreds of millions of dollars on tax systems modernization even though fundamental weaknesses jeopardize that investment. IRS now plans to used a prime contractor and increase its use of software development contractors to develop tax systems modernization. However, its plans and schedules in this area are poorly defined and cannot be fully understood or assessed. Moreover, as the experience with Cyberfile and the Document Processing System projects makes clear, IRS does not have the mature processes needed to acquire software and manage contractors effectively.

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