Nor does it address the risk inherent in shifting hundreds of millions of dollars to additional contractual efforts when the evidence, as demonstrated with IRS’ Cyberfile project, is clear that IRS does not have the disciplined processes in place to manage all of its current contractual efforts effectively. IRS Does Not Yet Have a Comprehensive Strategy to Maximize Electronic Filings

IRS has identified increasing electronic filings as critical to achieving its modernization vision. IRS said, for example, that it was developing and implementing a process to select, prioritize, control, and evaluate information technology investments to achieve reengineered program missions. To address IRS’ software development weaknesses and upgrade IRS’ software development capabilities, we recommended that the IRS Commissioner immediately require that all future contractors who develop software for the agency have a software development capability rating of at least CMM Level 2; and before December 31, 1995, define, implement, and enforce a consistent set of requirements management procedures for all TSM projects that goes beyond IRS’ current request for information services process, and for software quality assurance, software configuration management, and project planning and tracking; and define and implement a set of software development metrics to measure software attributes related to business goals. The Department of the Treasury report also noted that a schedule for conducting software capability evaluations was developed. However, this initial set of metrics is incomplete. IRS is using contractors to complete its security and data architectures, but has not committed to a completion date. IRS is still working on plans for its integration testing and control facility.
Why GAO Did This Study

GAO discussed the Internal Revenue Service's (IRS) efforts to modernize the tax processing system.

What GAO Found

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.