ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, March 15, 1996 TAG: 9603150058
SECTION: VIRGINIA PAGE: C-6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Republican lawmakers threatened Thursday to cut nearly $1 billion from the Internal Revenue Service's budget next year unless the agency corrects shortcomings in its ambitious modernization effort.
The IRS has asked for $850 million for fiscal 1997 to continue its 10-year-old program of transforming by 2000 its labor-intensive, paper-heavy operation into a nearly paperless system, where most tax returns are filed electronically and most problems are resolved by telephone.
Rep. Jim Lightfoot, R-Iowa, chairman of the House Appropriations treasury subcommittee, said the agency will be denied the money unless it overhauls the planning and management of the project.
``Until we get a blueprint, we're not going to give them the money,'' he said. He said Congress' General Accounting Office must sign off on the plan.
The IRS has spent nearly $3 billion since 1986 to update a system that had been virtually unchanged since it was first automated in the early 1960s. The GAO, Lightfoot and other critics say the modernization project has been loosely coordinated without enough attention paid to whether new computer systems will be able to work together.
``You can't build a house without a blueprint,'' Lightfoot said. ``The way they're going about it, they're liable to build the roof first, the bathroom may be in the middle of the living room and you turn on the lights in the kitchen and the toilet flushes.''
Rep. Steny Hoyer of Maryland, the subcommittee's chief Democrat, acknowledged the need for improvement but said the IRS' modernization problems date to the Reagan administration.
Deputy Treasury Secretary Lawrence Summers told the subcommittee he was ``very concerned'' about the modernization program, which he called ``a sobering experience.''
In retrospect, he said, the IRS focused too much on acquiring new computers and other technology and not enough on changing its way of doing business in line with the new technology.
Outside experts' reports ``point to the need for an entirely new approach the bottom up, and do it right,'' he said.
IRS Commissioner Margaret Milner Richardson said she has overhauled the management of the modernization project, drawing on expertise from inside and outside the agency.
Richardson and Summers said the administration wants the IRS to offer the same level of customer service, including instant telephone access to relevant account information, that taxpayers have come to expect from large banks, airlines and merchants.
It wants a dramatic productivity increase in handling the 2 billion pieces of paper processed by the IRS annually - a stack 200 miles high - and an increase in the taxpayer compliance rate from 86 percent to 90 percent, raising federal receipts by $40 billion annually.
LENGTH: Medium: 60 linesby CNB