TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

THE INTERNAL REVENUE SERVICE COMPLETED EXTENSIVE PROGRAMMING AND SYSTEMS CHANGES IN A COMPRESSED TIMEFRAME FOR THE 2019 FILING SEASON

Final Report issued on June 17, 2019

Highlights of Reference Number:  2019-24-035 to the Commissioner of Internal Revenue.

IMPACT ON TAXPAYERS

The Tax Cuts and Jobs Act of 2017 (hereafter referred to as the Act) made significant changes to the tax code affecting individuals, businesses, and tax-exempt organizations.  It is the first major tax reform legislation in more than
30 years.

The IRS must identify the tax law and administrative changes that affect the upcoming filing season.  Once these changes are identified, the IRS must revise the various tax forms, instructions, and publications.  The IRS provided documentation stating that for the 2019 Filing Season, the IRS reprogrammed 124 computer systems to ensure that tax returns are accurately processed.

WHY TIGTA DID THE AUDIT

In September 2018, TIGTA issued the audit report, A Shortened Delivery Cycle, High Volume of Changes, and Missed Deadlines Increase the Risk of a Delayed Start of the 2019 Filing Season, Ref. No. 2018-24-064, (Sept. 2018).  This audit continued our review of the IRS Information Technology organization’s efforts to implement the Act.  Specifically, this audit was initiated to review the systems development process to implement 2019 Filing Season changes.

WHAT TIGTA FOUND

The IRS addressed the 2019 Filing Season systems development risk.  Actions taken to address the risk included deferring the creation of new tax forms in an automated format, reducing the scope of testing for Business Master File applications, and using a tool that enabled Enterprise Systems Testing to identify issues more than two weeks earlier than usual and have resolutions in place prior to the next code delivery.  Despite Act-related requirements, development, and testing phases of the systems development process starting later than usual, the IRS began the 2019 Filing Season on January 28, 2019, which is within the normal time frame.

Information Technology organization management stated that at the start of the filing season functional testing was complete and Final Integration Testing was 80 percent complete.  As of January 30, 2019, Information Technology organization management reported 77 open defects.  Most of the open defects were style sheet/display errors.  Style sheets format tax return data to display properly for IRS tax examiners that need to access/view tax returns online.  All critical defects were resolved prior to the start of the 2019 Filing Season.

Information Technology organization personnel and contracted support implemented the Act with limited impact on ongoing programs.  IRS management identified seven ongoing programs that might be delayed or slowed down due to the reallocation of employees and other resources to the Act implementation.  TIGTA analyzed the work hours of Information Technology organization employees who charged time to one or more of these programs and to the Act.  Our analysis determined that the reallocation of labor resources might contribute to a slowdown for three of the programs.

WHAT TIGTA RECOMMENDED

TIGTA made no recommendations as a result of the work performed during this review.

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2019reports/201924035fr.pdf.

 

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E-mail Address  /  TIGTACommunications@tigta.treas.gov

Website             /  https://www.treasury.gov/tigta