IRS: Modernization funds won't be wasted

Internal Revenue Service Commissioner Mark Everson told senators that the agency needs every bit of the $10.7 billion earmarked for the IRS in the president's fiscal 2005 budget request.

"I'm asking for the full request — not a penny more," Everson said, citing taxpayer service, tax enforcement and systems modernization as top priorities of his administration.

Sen. Richard Shelby (R-Ala.), chairman of the Senate Appropriations Committee's Transportation, Treasury and General Government Subcommittee, pressed Everson for assurances that the $1.6 billion that has been spent on IRS systems modernization during the past six years will not be wasted, he said, adding that an earlier modernization effort that cost $4 billion failed.

The current modernization program was originally estimated to be completed in 15 years at a cost of $7 billion. Those estimates by the IRS and its subcontractor were optimistic and caused people's expectations to be higher than they should be, Pamela Gardiner, the Treasury Department's acting inspector general for tax administration, told the subcommittee.

Gardiner also said the program's complexity and poor management practices early on caused the unrealistic cost and schedule estimates to veer even further off course. "I think everyone's disappointed," she said.

Everson told the subcommittee that systems modernization is one of his top priorities and that he is now meeting monthly with the president and chief executive officer of Computer Sciences Corp., the prime contractor for the IRS' systems modernization, in an effort to keep the program on track.

After delivering a harsh ultimatum to CSC officials in February, Everson said he is now "cautiously optimistic they can do this."

The next critical modernization deadline comes up in August, Everson said, which is when the initial release of the taxpayer database known within the IRS as the Customer Account Data Engine is due.