Income Tax
IRS Told to Improve Integration Between its Software Programs
If tax processing systems are not properly integrated to deliver filing season functionality, taxpayers may be unable to timely file returns, receive refunds, or obtain timely, accurate customer service.
Oct. 27, 2014
As part of its annual preparation for the tax filing season, the Internal Revenue Service (IRS) performs integrated end-to-end testing of the hundreds of computer applications it uses to process income tax returns. This process is known as the Final Integration Test (FIT) and is designed to ensure that revisions to IRS tax processing computer applications interact correctly prior to the tax return filing season.
If tax processing systems are not properly integrated to deliver filing season functionality, taxpayers may be unable to timely file returns, receive refunds, or obtain timely, accurate customer service.
A new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA) raises several concerns about the effectiveness of the FIT, based on its review of the FIT conducted prior to the start of the 2014 Filing Season. TIGTA conducted this audit to help ensure the effectiveness of the FIT program in testing the integration of an increasingly complex tax processing system.
The IRS’s Enterprise Operations organization and the Wage and Investment Division withdrew their technical support from the FIT program prior to the completion of the tests. The early loss of support resulted in unplanned deviations from the FIT Test Plan, as not all tests could be completed as planned.
TIGTA also found that the IRS does not have a formal process to evaluate, compare, and synchronize the FIT test environment with the filing season environment and that the Integrated Customer Communications Environment was not included in the FIT test environment. In addition, the FIT program has not established performance metrics to compare actual performance with expected performance.
Further, TIGTA found that test analysts had problems accessing the Employee User Portal and the Integrated Enterprise Portal, which caused interruptions in the performance of the Processing Year 2014 FIT.
“The IRS needs to make significant changes to its tax processing system to implement legislative changes,” said J. Russell George, Treasury Inspector General for Tax Administration. “It is vital that the FIT Program identify and resolve issues prior to the start of the 2015 Filing Season.”
TIGTA made six recommendations to the IRS, including: providing the necessary level of business unit support to the FIT; establishing performance goals and metrics for the annual FIT program; and, implementing the environment comparison and synchronization process between the FIT program’s test environment and the filing season environment.
IRS management agreed with all of the recommendations and plans to take appropriate actions.
However, the IRS also commented that implementation of most of the recommendations is contingent upon the availability of funds and the need to prioritize essential taxpaying operations.