IRS spent $19.5 million on cancelled project for new Web portal

The Internal Revenue Service (IRS) spent nearly two years and $19.5 million to develop its new Web portal, but cancelled the project six months before its scheduled completion date, according to a new report publicly released last week by the Treasury Inspector General for Tax Administration (TIGTA).

Despite increasing demand for increased services from both taxpayers and IRS employees, the IRS cancelled the project because of concerns about the portal's business strategy and hardware costs, the report found. The IRS subsequently spent $9.7 million for new equipment and upgrades to the existing portal capacity in order to operate projects dependent on the portals, including the "My IRS Account" and the Modernized E-File projects.

A portal is a point of entry to a network system that includes a search engine or collection of links to other sites arranged by topic. The IRS's Internet portal provides the infrastructure that allows users (IRS employees and taxpayers) to have Web-based access to IRS information and file tax returns electronically.

"The portal environment is a critical interface between the public and the IRS," commented J. Russell George, the Treasury Inspector General for Tax Administration. "While we appreciate that the IRS wants to ensure that its portal plan reflects industry best practices and advancements in technology, purchasing new equipment for short-term upgrades increases the risk that the new equipment may not integrate with a new portal environment once it is developed."

TIGTA recommended that the IRS develop a process to ensure that new information technology projects seeking approval and funding includes an analysis of its web portal needs. The IRS agreed with the recommendation.

You can read the full report, including the scope, methodology and full IRS response.

You may like these other stories...

Hertz and Icahn make peaceThere won’t be any nasty, protracted proxy battle between Hertz Global Holdings and activist investor Carl Icahn. The rental car chain agreed last Thursday to give Icahn – who has...
For bitcoin users, the taxman cometh. And you best know how to calculate taxes owed on what the IRS calls convertible virtual currency.In March 2014, the IRS issued Notice 2014-21, which declares virtual currency will be...
Majority of House of Representatives urges leadership to preserve cash method of accounting for tax purposesA bipartisan majority of the House of Representatives – 233 members – has signed a letter urging House...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.