GAO discussed opportunities to improve the Internal Revenue Service's (IRS) business operations. GAO noted that: (1) because IRS has not fully corrected its management and technical weaknesses, Congress has limited funding for tax systems modernization (TSM) to critical systems; (2) IRS needs to develop an effective business vision implementation strategy that includes performance measures; (3) IRS plans to complete its electronic filing strategy by October 1996, but it has not fully addressed implementation of its customer service vision or integration of its TSM projects with its reengineering efforts; (4) IRS needs to develop the capacity to make sound information technology investments; (5) IRS needs to build a technical foundation for its TSM information systems projects, invest sole TSM management control in one official, and improve its contracting process; (6) IRS needs to address serious financial management problems, particularly those concerning its revenues, tax refunds, accounts receivables, nonpayroll operating expenses, and available appropriations; (7) IRS, the Department of the Treasury, the Office of Management and Budget, and Congress must ensure that IRS follows through on recommended management improvements; (8) Congress has provided a framework to monitor IRS progress in improving its management operations and modernizing its tax return processing system; and (9) the National Commission on Restructuring IRS will have a principle role in evaluating IRS operations and recommending organizational, management, and operating changes.

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