On the one-year anniversary of the IRS Restructuring and Reform Act of 1998, this testimony discusses the management challenges confronting IRS as it modernizes its organization and reforms its culture. The IRS Commissioner has painted a compelling picture of what he wants IRS to become--a fully modernized agency providing top-quality service to taxpayers. Given the reforms that are planned, it should surprise no one that IRS--an agency with a long history of stovepipe management and a culture driven by enforcement statistics--will be challenged to accomplish so ambitious an agenda. In GAO's view, the modernization effort has the potential to deliver better service to taxpayers. IRS' agenda, however, is both ambitious and high risk. GAO has been impressed by the Commissioner's leadership and commitment to change as well as IRS' efforts so far. But sustained progress will depend on IRS' managers successfully marshaling the agency's resources, both human and systems, to deal with that challenging agenda.

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