Washington (July 26, 2004) -- A modernized system designed to replace the Internal Revenue Service central database of taxpayer account information has processed its first live returns, the IRS announced.

The Customer Account Data Engine started processing an initial set of 1040EZ tax returns last week, marking the first time in 40 years that the IRS is processing returns and issuing refunds on a new computer system, noted IRS Commissioner Mark W. Everson.

CADE will be used to process more than 2 million 1040EZ tax returns during the 2005 filing season. The CADE system will be phased in over several years, processing increasingly more complex tax returns in stages, and ultimately replacing the 40-year-old system that the IRS now uses to process tax return data.

When fully operational, CADE will be a modern database that will house tax information for more than 200 million individual and business taxpayers. When completed, the IRS said that it will provide benefits such as faster refunds and daily postings of transactions and updating of accounts.

-- WebCPA staff

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