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Digital Modernization

GAO: IRS Individual Master File Modernization Might Not Be Completed Until 2030

IT modernization

GAO: IRS Individual Master File Modernization Might Not Be Completed Until 2030

The Government Accountability Office said the Internal Revenue Service may take up to 2030 to replace its 60-year-old Individual Master File. The system serves as the source for individual tax data.

According to a GAO report, the Customer Account Data Engine 2 experienced multiple delays and cost changes that affected modernization efforts. CADE 2 is the program that would modernize the IMF. The federal oversight body noted that a key milestone for replacing key IMF functions was pushed back from 2014 to 2023. It also listed other hindrances since the program was established in 2009, FCW reported.

The agency said one key factor that affected the IRS’ modernization efforts is the coronavirus pandemic. According to GAO, IRS had to deploy IT equipment and address issues with IT infrastructure to maximize telework. The resources used for the COVID-19 response efforts were originally allocated for CADE 2.

GAO also stated that modernization cost under CADE 2 is now four times higher than originally planned. CADE 2 is also expected to replace core IMF components instead of the whole system, the watchdog said.

IRS Deputy Commissioner for Operations Support Jeffrey Tribiano said IMF still works and continues to support the agency’s legislative mandates despite its age. He also assured GAO that it will continue to push for IMF modernization efforts.

The federal oversight body noted that IRS completed most of its planned IT modernization activities for the fiscal years 2019 and 2020. The financial organization was also able to do so within schedule and within cost, GAO said.

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