GAO discussed the Internal Revenue Service's (IRS) efforts to modernize the tax processing system. GAO noted that: (1) it has recently made numerous recommendations to IRS relating to its Tax Systems Modernization (TSM) effort; (2) IRS is making progress in maximizing electronic tax filing and controlling its systems and software development efforts; (3) IRS action on some GAO recommendations is incomplete; (4) IRS has not defined a process for selecting, controlling, and evaluating its technology investments, completed procedures for requirements management, quality assurance, configuration management, and project planning and tracking, or defined its systems, security, and data architectures; (5) a Department of the Treasury report acknowledged that IRS does not have the capability to develop and integrate TSM, and will obtain additional contractual help to do so; and (6) while additional contracting may help, IRS does not have the capability to successfully manage all of its current contractors.

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