IRS facing 'moment of truth'

GAO 2003 Performance and Accountability Series and High Risk Series

The success or failure of upcoming milestones will be a key indicator of whether officials need to rethink the Internal Revenue Service's modernization program, said Mark Everson, the nominee for IRS commissioner.

The tax agency's multibillion-dollar business systems modernization effort will be a top priority should he be confirmed, Everson said today, testifying before the Senate Finance Committee.

The July milestone for updating master data files to a system that will allow real-time access and analysis is the first and most obvious initiative to citizens, he said. However, the upgrade of the agency's internal financial management systems, due in October, is just as important, Everson said.

Whether those two projects meet their milestones, which have already shifted from past deadlines, will determine how Everson plans to approach the entire modernization effort in the future, he said.

It has been difficult for the agency and its contractors to keep the modernization project on schedule, and the upcoming milestones are "sort of a moment of truth for me," he said.

The modernization project is one of the high-risk projects in the General Accounting Office's biannual governmentwide report, and Everson already has plans to build on the business modernization efforts led by former Commissioner Charles Rossotti, who completed his five-year term as commissioner in November 2002.

One of the problem areas GAO highlighted is IRS program managers' ability to keep up with the pace of acquisition for business systems modernization. And that is something Everson expects to address right away.

"I want to make sure that things are being sequenced intelligently and in a way that things can actually be achieved," he said. Simultaneously, he wants to work with people from the agency's business side to make them understand that all the responsibility for the modernization cannot be passed on to the information technology staff or contractor.

"You can't just turn this over to the contractor and tell them to do it. You need business owners," Everson said.

The modernization effort also will help the agency as a whole because when it is finished, the billions of dollars spent on the legacy systems will be able to be used in other enhancements. "You can't free up any of those resources until you've migrated to the new technology," he said.

Everson has been deputy director for management at the Office of Management and Budget since August 2002.