GAO: IRS movin' along with reform recommendations

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The Government Accountability Office (GAO), in a recent analysis of previous recommendations for the Internal Revenue Service (IRS), found that the IRS has implemented one of four recommendations made in June 2011 to strengthen the Patient Protection and Affordable Care Act (PPACA) efforts by scheduling the development of performance measures for the PPACA program.

“PPACA is a significant effort for IRS, with expected costs of $881 million from fiscal years 2010 to 2013 and work planned through 2018,” GAO stated in a June report. “To implement PPACA, IRS must work closely with partner agencies to develop IT systems that can share data with other agencies. Additionally, IRS is responsible for providing guidance to taxpayers, employers, insurers and others to ensure compliance with new tax aspects of the law. Furthermore, it will be important for IRS to have systems to consistently identify, assess, mitigate, and monitor potential risks to the program’s success.”

GAO also found that IRS made varying degrees of progress on the other three recommendations:

  • Develop program goals and an integrated project plan;
  • Develop a cost estimate consistent with GAO’s published guidance; and
  • Assure that IRS’ risk management plan identifies strategic level risks and evaluates associated mitigation options.

IRS’ revised risk management plan meets three of five criteria for risk management plans, but the plan does not have specific guidance for evaluating and selecting potential risk mitigation options, such as how to identify who conducts and reviews the analysis, determine the availability of resources for a given strategy and document for future users the rationale behind decisions made, GAO added.

GAO recommended that IRS enhance its guidance on evaluating risk mitigation alternatives and documenting decisions, use a risk management plan for work led by its Office of Chief Counsel and develop agreements with external parties to record and track risks that threaten shared goals and objectives.

IRS officials agreed with all of GAO’s recommendations, the agency concluded.