Two IRS IT projects on hold

The Internal Revenue Service has postponed two major IT projects partly because of budget constraints, according to a report by the Government Accountability Office. The actions are indicative of an IRS budget that has shrunk below 2009 levels and a decrease in full-time equivalent workers.

The Information Reporting and Document Matching system, which is designed to increase voluntary tax compliance and the accuracy of income reporting, was expected to be completed in 2019 and has already gobbled up $70 million. The Return Review Program (RRP) was initially slated to be complete in 2015 but is on hold indefinitely.

"IRS is working to develop a plan to move beyond the hold on RRP, and expects to complete the plan in the summer of 2014, and will initiate the plan after that time," the GAO report states. "Moving forward, this plan will help inform IRS' funding needs for RRP."

Budget cuts have chipped away at employee training as well. According to IRS Commissioner John Koskinen, funds for training and related travel expenses have decreased by 83 percent and 87 percent, respectively, since 2010.

GAO recommended that IRS officials allocate their limited resources more effectively by assessing the revenue yield against costs for different enforcement programs. IRS leaders agreed with that strategy.

"Given the time to develop additional key data, IRS is considering how to apply interim methods, findings or approximations," the GAO report states. "They are unsure when this work will be completed; we believe our recommendation remains valid."