IRS modernization shutdown looms

The Internal Revenue Service's long-term project to modernize its technology systems has run out of money and is in danger of shutting down unless Congress releases funds earmarked for the program, officials said Thursday.

"We need it now," said Bert Concklin, the outgoing head of the Business Systems Modernization Office, after he spoke at the spring meeting of the Council for Electronic Revenue Communication Advancement in Arlington, Va.

He said Congress has been dragging its heels on the release of $128 million to keep the program functioning on schedule for fiscal 2001.

But budget problems are nothing new for the IRS program that has an ambitious plan to modernize the tax agency's legacy systems over 15 years. Last year, the effort was forced to shut down for five weeks because it got caught in another budget dispute.

During that time, the program lost 25 percent of its highly trained technology workers who didn't want to miss any pay and sought other jobs. This year, the program could face another loss of skilled workers that would, in turn, slow down the project even more.

"We can't operate without funds," said one official with Computer Sciences Corp., the prime contractor for the $15 billion technology modernization project. "You are going to lose the key people you want."

CSC did not lay off any employees during last year's budget struggles and has no plans to lay off anyone this year, the official said. Nevertheless, any delay in the project is likely to cost the government money.

The funds in question are in the IRS Information Technology Investment Account, which funds the IRS modernization effort. Under the IRS reform law, the agency must get approval from Treasury Department officials, the General Accounting Office and House and Senate appropriators before the funds are released.

The IRS is not the only agency singing the budget blues. Customs Service modernization chief Charles Armstrong told the conference that Congress also came up short in funding his agency's modernization program, providing only $130 million when it needed $210 million for the first year of operation. Armstrong said Customs is urging Congress to find the money to keep the project on time.

"We think it's important to keep this on a four-year schedule," Armstrong said. "We don't want the technology to get stale before we get it out there."