NCPA - National Center for Policy Analysis

GAO Says No Go At IRS

April 16, 1997

The General Accounting Office has few kind words to deliver when it comes to evaluating how the Internal Revenue Service is managed.

"Historically, IRS has not been highly responsive in fixing business operation problems and implementing our recommendations," is how the Congressional watch-dog agency diplomatically sums up the situation.

  • Last fall, the GAO found "serious and persistent financial management problems" with the IRS' $7 billion budget.
  • It has recommended that the agency slow its Tax System Modernization program until it corrects more basic flaws in its operations.
  • GAO said the agency's Cyberfile project -- an effort to update its software to promote electronic filing -- was in such a shambles one week before it was to go into operation, it was suspended at a loss of $17 million.

Private experts suspect that the IRS is resisting bringing in experienced people from top accounting and law firms to help clean up the mess because it fears what they will find and expose. Says Tulane University's F. Kelleher Riess, a tax lawyer and teacher, "I think there are a lot of dirty little secrets" to be uncovered at the agency.

While the Clinton administration's idea of improving IRS performance seems to be tinkering around the edges with mild reforms, many GOP leaders say nothing short of a complete top-to-bottom overhaul is required.

Source: Jeff A. Taylor, "Situation is Normal at the IRS," Investor's Business Daily, April 16, 1997.


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