The technology environment
The e-file program relies on a combination of technologies at the present time: the telephone for the Telefile component, the Internet for electronic retrieval and submission of tax documents, and the approved software partners, e.g. Quicken, TaxACT, or TaxWise, to use in the tax preparation and submission process. Another piece of the technology picture is composed of the providers of online tax preparation services such as Taxcite.com, Tax-engine.com, Taxbrain.com, among others. For a complete list of these partners, see http://www.irs.gov/elec_svs/partners.html.
An examination of a high level architecture for the Revenue Accounting Process indicates a high degree of system complexity. The Revenue Accounting Process consists of 84 systems with 195 projects. The information collection aspect of the IRS also contributes to the system complexity. The annual information collection burden for the Department of Treasury is 6156.8 millions of hours. This is considered a statistical outlier in the Information Collection totals, with the Department of Labor having the next highest collection burden at 181.59 millions of hours. The IRS contributes most of the burden hours that Treasury reports to the Office of Management and Budget.
Some technical issues did come up in the development of the program. There was a need to make some major changes to the legacy system used by IRS. At the back end of processing, changes had to be made to accommodate credit card payments, and electronic authorizations. There was also the need to create an interface with the customer that was "friendly" and easy to use.
This project continues to be under intense Congressional scrutiny as well as the subject of many U.S. General Accounting Office audits. The IRS was on the "high risk" list of federal agencies, promulgated by the GAO. The e-file was one component of a much larger modernization project of the IRS, a project that was over budget, over time, and not yet completed.
An important note here regarding the technology environment of the IRS is that its history was troubled and there were few IT implementation successes.
The IRS website, the newly revamped Digital Daily (January, 2002), is another active technology component of e-file. The web site (launched December, 1997) received more than 1.5 billion hits from January through April 16, 2001, a 57 percent increase from the past years hit rate. Web site visitors spent an average of 11 minutes on the e-file site, with most users going to the page for electronic tax filing. Another feature of the web site is the ability to download forms and documents published by the IRS. The number of these downloaded through February 2001 was 103 million; double the number of forms and documents downloaded over the same period last year. The transactions offered at the IRS web site include government-to-business, government-to-citizen, and government-to-government.