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.