The Internal Revenue Service will get closer to its goal of providing state-of-the-art individual taxpayer account processing and technologies if it improves the processes it follows for developing its customer account software, according to a new government report.

The report, by the Treasury Inspector General for Tax Administration, recommends improvements to the IRS’s current efforts to modernize taxpayer account administration through its Customer Account Data Engine, or CADE 2 Program.

“The IRS has established the laudable goal of providing state-of-the-art taxpayer service, for which we applaud them,” said TIGTA Inspector General J. Russell George in a statement. “We hope that the improvements we recommended for the CADE 2 Program will help the IRS find this goal achievable.” Established in June 2009, the mission of the CADE 2 Program is to provide state-of-the-art individual taxpayer account processing and technologies to improve service to taxpayers and enhance IRS tax administration.

Once completed, the new modernization environment is expected to allow the IRS to more effectively and efficiently update taxpayer accounts, support account settlement and maintenance, and process refunds on a daily basis, thereby improving service to taxpayers.

TIGTA’s review was designed to determine the effectiveness of CADE 2 Program prototype efforts, including the applicable security provisions, designed to validate the first phase of the IRS development plans.

TIGTA found that the CADE 2 prototype teams, which were developed to demonstrate confidence in the CADE 2 system, generally managed their objectives effectively. In addition, these teams identified risks to the successful execution of prototype plans and took steps to overcome barriers.

However, TIGTA also found that the CADE 2 Program Office could improve its management of prototype activities by ensuring the timely development of a work breakdown structure (via task assignments) and documenting prototype testing activities, potential organizational conflicts of interest, and security background checks on the contractor personnel working with the prototype teams.

TIGTA made one multi-pronged recommendation and the IRS agreed with it. TIGTA recommended that the IRS chief technology officer have the CADE 2 Program Management Office re-emphasize compliance with the elements of the CADE 2 Prototype Process to ensure planning, execution, and reporting activities are followed and incorporate guidance to include appropriately detailed work breakdown structures, testing plans and documentation standards that follow Internal Revenue Manual and Enterprise Life Cycle guidance. The IRS CTO should also ensure effective management of contracting activities to ensure that issues concerning organizational conflict of interest are properly managed, and there needs to be timely completion of all necessary security documentation for contractor personnel.

The IRS said it plans to update the CADE 2 contracting guidelines, embed contracting officer technical representatives within the CADE 2 Program Management Office to assist future prototype teams, and update the CADE 2 Program Management Plan’s Prototype Process document. The IRS also said it would update the Prototype Lessons Learned presentation to address TIGTA’s findings.

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