IRS’ High-Risk Areas

For years we have chronicled IRS’ struggle to modernize and manage its operations, especially in the high-risk areas, and have made scores of recommendations to improve IRS’ systems, processes, and procedures. It is clear that in order to achieve its stated goals of reducing the volume of paper tax returns, providing better customer service, and improving compliance with the nation’s tax laws, IRS must successfully modernize its systems and operations. To accomplish this modernization, however, IRS needs to develop comprehensive business strategies to ensure that its new and revised processes drive systems development and acquisition. Solving the problems in the high-risk areas is not an insurmountable task, but it requires sustained management commitment, accurate information systems, and reliable performance measures to track IRS’ progress and provide the data necessary to make informed management decisions. The result has often been inefficient and ineffective programs and operations that are vulnerable to waste, fraud, abuse, and mismanagement. At a minimum, IRS needs an implementation strategy that includes both performing cost-benefit analyses and developing reasonable estimates of the extent, time frames, and resources required to correct its high-risk vulnerabilities.
Why GAO Did This Study

GAO discussed the Internal Revenue Service's (IRS) efforts to improve the efficiency and effectiveness of its program areas that GAO has designated as high risk because of their vulnerability to waste, fraud, abuse, and mismanagement.

What GAO Found

GAO noted that: (1) for years GAO has chronicled IRS' struggle to modernize and manage its operations, especially in the high-risk areas, and has made scores of recommendations to improve IRS' systems, processes, and procedures; (2) it is clear that in order to achieve its stated goals of reducing the volume of paper tax returns, providing better customer service, and improving compliance with the nation's tax laws, IRS must successfully modernize its systems and operations; (3) to accomplish this modernization, however, IRS needs to develop comprehensive business strategies to ensure that its new and revised processes drive systems development and acquisition; (4) solving the problems in the high-risk areas is not an insurmountable task, but it requires sustained management commitment, accurate information systems, and reliable performance measures to track IRS' progress and provide the data necessary to make informed management decisions; and (5) at a minimum, IRS needs an implementation strategy that includes both performing cost-benefit analyses and developing reasonable estimates of the extent, time frames, and resources required to correct its high-risk vulnerabilities.