Clinton to ask for electronic filing, trade data systems

More than four years after the Clinton administration proposed automating interactions between businesses and federal agencies, officials plan to raise the profile of two projects designed to simplify the collection of trade data and promote electronic filing of corporate tax information.

The president's budget for fiscal 1999— to be released today— would fund agencies, primarily the Treasury Department, to begin building and rolling out applications for the Simplified Tax and Wage Reporting System (STAWRS) and the International Trade Data System (ITDS). In the past, the money— about $5 million for each project— mainly has funded research and small prototypes, but by next year, agencies are expected to bring these initiatives into the mainstream of their operations, said Greg Woods, deputy director of the National Performance Review, which has championed both systems.

STAWRS, which would permit companies to file all federal and state tax information at once electronically, will be incorporated into the Internal Revenue Service's electronic tax-administration program, Woods said.

Regarding ITDS, Woods said, "We've got a proof of concept in the field" as well as agreement among agencies about the types of data to collect to design and build shared systems for gathering, distributing and storing foreign-trade data.

"These are two of the most challenging things that we've undertaken because of the incredible complexity of the tax code and this whole [trade] filing operation," Woods said. "They are priorities for [the administration] because they cut across so many agency lines."

Filling in the Picture

STAWRS is closer to reality than ITDS, in part because many state governments already are consolidating their own requirements for tax data from companies, such as payroll reports and unemployment insurance. "States are, in essence, beginning to fill in federal parts of the STAWRS picture anyway," said Jonathan Lyon, senior staff member for technology with the Federation of Tax Administrators, a professional association for state revenue officials. "They have either legislatively or administratively changed the way they are doing business to build a single point of contact."

Midori Morgan-Gaide, who heads the federal STAWRS office, said tests of "single-point filing" this year would demonstrate how states can collect data and transmit it to the IRS. Meanwhile, she said, her office will discuss with the Social Security Administration how to roll out a recent pilot that allows employers to file their W-2 forms with the agency and distribute the forms electronically to states.

In fiscal 1999, the IRS, SSA, state governments and private-sector partners would take over the project, Morgan-Gaide said. "In the year 2000, [the] STAWRS [office] should be fading out."

ITDS is further from coming online, despite last year's landmark agreement among 104 federal offices to reduce from 1,950 to 74 the number of data elements they collectively use. An interagency committee is designing a systems architecture for ITDS— scheduled to be completed this year— which includes a data repository and interfaces to traders and federal agencies.

After that, money must be devoted to building the systems, said Richard Kuzmack, deputy director of the ITDS project office.