IG Issues Attaboy to IRS

The IT managers over at the Internal Revenue Service got some good news this week from an unexpected source: the Treasury Inspector General for Tax Administration. In a report released this week, the IG concluded that the IRS had successfully deployed the latest update to its new database and application engine, called the Customer Account Data Engine (CADE). Developing a working CADE has been a pretty big deal for the IRS; it’s at the heart of the agency’s multi-billion-dollar modernization effort, which has had its history of troubles. IRS agents eventually will use CADE to store and access the 200 million individual and business tax files Americans submit every year. The hope is that the files will be updated daily instead of weekly (improving service by allowing IRS employees to give more up to date informaiotn to taxpayers) and allow for tax returns to be sent out faster.

This milestone was a big one for the IRS because the new release, called Release 2.2, included the most commonly used tax forms, including returns for Single, Married Filing Jointly, Married Filing Separately, and Head of Household, as well as profit or loss from a business (Schedule C), capital gains and losses (Schedule D), supplemental income and loss (Schedule E), profit or loss from farming (Schedule F), and self-employment tax (Schedule SE).

But the IRS pulled it off, according to the IG. Success meant the IRS accurately posted the returns for those commonly used tax forms. The only drawback, the IG reported, was that the IRS processed 11 million returns using CADE instead of the 33 million returns it had set as a goal. The IRS said it missed its goal because it had to postpone launching the new release by two months so it could complete upgrades. The laucnh had one other hiccup that the IG downplayed. The IG caught caught one incident in which the IRS would have sent out $400,000 in undeserved refunds to taxpayers for overpaid taxes, but the error was caught before the payment was sent.