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Treasury Inspector General for Tax Administration

Press Release

April 03, 2014
TIGTA - 2014-05
Contact: David Barnes
(202) 622-3062

Improvements Needed to The IRS’s Management of Mainframe Software

WASHINGTON – Mainframe software license management at the Internal Revenue Service (IRS) is not being adequately performed, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

Computer software is typically protected by Federal copyright law, which requires users of software programs to have a license authorizing such use. Software licenses are legal rights to use software in accordance with terms and conditions specified by the software copyright owner.

The IRS runs approximately 200 different software products on its mainframe computer systems.

TIGTA reviewed whether the IRS is adequately managing mainframe software licenses.

The IRS is not adhering to Federal requirements and recommended industry best practices, TIGTA found. Specifically, the IRS does not have policies, procedures, and requirements for mainframe software license management and does not have a centralized, enterprisewide organizational structure for managing mainframe software licenses.

The inadequate mainframe software license management has resulted in an estimated waste of $11.6 million and over-utilization of $1.5 million in license and software subscription support fees.

“Efficient and cost-effective management of the IRS’s software assets is crucial to ensuring that information technology services continue to support the IRS’s business operations and help it to provide efficient services to taxpayers,” said J. Russell George, Treasury Inspector General for Tax Administration.

TIGTA made seven recommendations to the IRS to improve management of its mainframe software licenses. The recommendations included developing policies, developing an enterprisewide organizational structure to manage mainframe software assets and licenses, and developing a software license inventory and maintaining it with a specialized tool. IRS management agreed with all seven recommendations with slight modifications to three of them.

Read the report.


Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.

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