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03/12/2010

IRS spent $18.7 million for computer system found unreliable, underused and slow

An $18.7 million IRS computer system has failed to bring improvement to the oversight of an agency division that oversees 3 million customers ranging from small community organizations to cities to major universities.
The Tax Exempt & Government Entities Division oversees entities that control $8.2 trillion in assets and pay more than $220 billion in employment tax and income tax withholding. But their computer system isn't up to snuff, according to a report(pdf) earlier this year by the Treasury Inspector General for Tax Administration.

Irs2 A data management system called TREES (Tax Exempt and Government Entities Reporting and Electronic Examination System) was installed in April 2008. It ran into problem several months later when, for about eight weeks, IRS workers had to revert to paper-based case management while waiting for a system update.
Among other problems, an examination by the inspector general found that:
* TREES may not contain a complete record of open examination cases.

* Employees interviewed in early 2009 said the new system was not leading to quicker case resolution.

* Employees were not consistently using the new system to create and store examination workpapers; instead, they were creating workpapers outside of the system and copying them into TREES because they believed TREES took longer to use

* Division examination employees were still using many manual processes and were using multiple inventory control systems to track and reconcile examination cases.


The inspector general recommended that such issues be addressed and that employee be re-trained on the TREES system.
IRS management agreed with the recommendation and by this July will begin developing an action plan to address the problems.

-- Darren Barbee

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