Treasury Inspector General for Tax Administration
September 15, 2009
Contact: Li-Yun Chien
The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its review of the Customer Account Data Engine (CADE) Release 4, which processes approximately 30 percent of individual income tax returns. The overall objectives of TIGTA's review were to assess the accuracy and completeness of CADE Release 4 capabilities to enhance the processing of tax return information, determine whether this release provides the intended benefits to the IRS and taxpayers, and determine whether the IRS has taken effective actions to correct security vulnerabilities in prior CADE system releases.
TIGTA found that from January through May 2009, CADE processed almost 40 million tax returns and generated almost $58 billion in refunds. Among other capabilities, Release 4 allows the IRS to make changes to taxpayers' last names, accepts automatic extensions filed by taxpayers, and generates notices to taxpayers eligible to receive the Additional Child Tax Credit. CADE Release 4 added processing capabilities for tax returns of surviving spouses and deceased taxpayers.
While CADE Release 4 successfully processed tax returns, some planned capabilities were not completely implemented. For example, TIGTA identified problems processing tax returns for deceased taxpayers and returns administered through the Treasury Offset Program, which applies a taxpayer's overpayment to outstanding non-tax child support or Federal agency debt prior to issuing a refund. When identified, the IRS implemented steps to correct these processing problems.
In previous reviews of the CADE system, TIGTA identified sixteen system security vulnerabilities, ten of which have been resolved with this release. TIGTA reported that the remaining six security vulnerabilities cannot be resolved until actions are completed to ensure that controls are effectively in place or such vulnerabilities have been approved as deviations to IRS policy.
"The modernized CADE system allows the IRS to update taxpayer accounts, support account settlement and maintenance, and process refunds on a daily basis, all of which contribute to improved service to taxpayers," said J. Russell George, the Treasury Inspector General for Tax Administration. "While CADE Release 4 is operating effectively, certain security concerns continue to exist."
TIGTA recommended that the IRS should appropriately enter and track system vulnerabilities on its control systems. IRS officials agreed with TIGTA's recommendation and plan to continue to improve the process in order to comply with IRS control systems policy.
To view the report, including the scope, methodology and full IRS response, go to: https://www.treasury.gov/tigta/auditreports/2009reports/200920100fr.pdf
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