IRS Urged to Improve Final Testing Before Tax Season

The Internal Revenue Service should improve the way it performs final testing of its computer systems prior to tax season to make sure they are working properly, according to a new government report.

The report, from the Treasury Inspector General for Tax Administration, noted that as part of its annual preparation for the tax filing season, the 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, or 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, TIGTA noted.

The new report from 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 the 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.
In addition, 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 TIGTA Inspector General J. Russell George in a statement. "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.

“I am encouraged that your audit has not found any fundamental weaknesses in the overall execution of the FIT,” wrote IRS chief technology officer Terence V. Milholland in response to the report. “From that strong foundation, we strive to make continual improvement.”