The Internal Revenue Service (IRS) began the Customer Account Data Engine (CADE) project to modernize the agency's outdated and inefficient data management system. This report determines (1) the reported status of CADE and IRS' plans for completing the project, (2) whether IRS is managing the relationship between CADE and the agency's enterprise architecture and current systems environment, (3) whether IRS is managing CADE in accordance with its Enterprise Life Cycle (ELC), and (4) whether IRS is ensuring that CADE will satisfy agency business needs. GAO found that IRS was over budget and behind schedule in meeting CADE's next project milestone, which is the completion of the preliminary design. IRS was not effectively managing the relationship between CADE and the enterprise architecture or its current systems environment. IRS had not fully employed several critical management controls that are intended to ensure that CADE is aligned with ELC. IRS had completed or was in the process of completing steps to ensure that CADE will satisfy agency business needs.

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