The Taxman Doesn't Giveth, He Just Taketh Away: In More Ways than One

The Internal Revenue Service has more than one way to take your money.

TaxProf blog reports:

After spending two years and $19.5 million to develop its new website, the IRS has canceled the project six months before its scheduled completion date.

Why? The answer seems to be that the agency is bereft of the concept of strategic planning. In a May 2009 report from the Treasury Inspector General for Tax Administration, it is somewhat euphemistically concluded in typical government-speak that the agency is a bunch of bumbling dolts who can’t see beyond their own pensions (emphasis added):

The IRS uses the Modernization Vision and Strategy process to identify projects that need portal support. However, during our prior audit work and through recent discussions with IRS portal project personnel, we determined that the Modernization Vision and Strategy process has not yet matured to the extent that it includes all information technology projects. The IRS uses various methods to identify existing projects that require portal support, such as the Modernization Vision and Strategy Plan and Unified Work Requests; however, there is no formal process to continuously identify and evaluate future planned projects that may require portal support. As a result, the IRS currently does not have a uniform procedure to continuously identify all projects needing portal support. An interim procedure would assist portal office personnel in recognizing future needs and performing more precise portal capacity studies.

In any private enterprise, those responsible for this abject failure and waste of resources would be shown the door or demoted post haste, or the business would fail. Not so in the government, where business acumen and familiarity and adherence to tried-and-true industry standards for project management appears to be almost non-existent.

The Treasury Inspector General for Tax Administration (TIGTA) is charged with “promot(ing) the economy, efficiency, and administration” of the IRS, as well as detecting and preventing “fraud, waste, and abuse within the IRS”.

With over 100,000 employees (2008), the IRS is indeed a mammoth agency, and one would assume a department with such importance would be privy to standard life-cycle management concepts applicable for system enterprise development. Yet, in an October 2008 memorandum it is noted (PDF, 11 pages):

However, the IRS and its contractors could improve Program effectiveness and efficiency through closer adherence to established guidelines such as the Enterprise Life Cycle4 and its related processes, as well as the Federal Acquisition Regulation. Our audits found that the odernization Program did not consistently implement Enterprise Life Cycle guidelines, including project management and requirements management activities.

So, as you look at your paycheck and note those federal deductions that the IRS so dutifully absconds, er, I mean collects from you, try not to think about the fact that part of this money is paying for the same time of mismanagement, lack of foresight, and absolute waste that you or I would be heading to the unemployment line for.

About six years ago I was peripherally involved with the State (PA) in a major system project. A state employee in Harrisburg who was integral to the project confessed to me on the telephone, “You know, if we were in private industry we would be fired by now.”

Indeed.