Taxpayer database delayed ? again

A modern database for taxpayer records has been pushed back for the second time in less than two years.

Internal Revenue Service officials July 25 announced that the first major milestone for the agency's Business Systems Modernization program would be delayed for another year, triggering an independent evaluation of the multimillion-dollar project's future.

IRS modernization efforts revolve around the proposed Customer Account Data Engine, which is developed by Computer Sciences Corp. as the prime contract's lead vendor. The engine, designed to be the central database holding all taxpayer records, was supposed to go online in December 2001. But delays pushed the launch to August of this year because of difficulties in getting commercial software, and because CSC "underestimated the complexity" of developing the project's technology, according to a November 2002 report by the IRS inspector general.

Tax officials said CSC recently notified them of further delays that would put the database's launch in the midst of efforts to make changes needed for the 2004 filing season. That was when IRS Commissioner Mark Everson made the decision to hold the launch and start the evaluation.

Agency officials budgeted $33 million in the current fiscal year for the tax data system, and in fiscal 2004, they plans to spend $84 million of the $458 million requested for the entire modernization program. But now government officials say it likely won't go online until the 2004 filing season — if it ever does.

The tax department's current leadership may not feel compelled to stick to technology upgrades that were planned years ago. At his confirmation hearing in March, Everson said he would use the August milestone to determine whether the prime contract should go forward or if more changes should be made to it. The contract was already modified once because of delays.

And the IRS also has a new chief information officer, Todd Grams, who moved to the position June 1 after several years as chief financial officer.

The Carnegie Mellon University Software Engineering Institute will carry out Everson's study and report back to the federal government by the end of October. The university group will evaluate CSC's work, decide if corrections are needed, and review the agency's management of the project.

Everson also plans to request that the IRS Oversight Board, a congressionally mandated group of public- and private-sector experts, assess the project.

The "project has had a number of delays over the past several years — too many delays," Everson said. "These delays are particularly disturbing, especially since the General Accounting Office continues to view modernization as a 'high risk area.' "

CSC officials did not return a phone message from Federal Computer Week.