CCAGW to Treasury: Modernize IT Systems to Prevent Fraud

For Immediate Release
Contact: Curtis Kalin 202-467-5318

October 16, 2017

(Washington, D.C.) – Last week, Council for Citizens Against Government Waste (CCAGW) President Tom Schatz sent a letter to Treasury Secretary Steve Mnuchin, urging his department to modernize its information Technology (IT) systems and improve its fraud detection efforts.

The letter reads in part:  

“On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to identify, plan and modernize outdated legacy information technology (IT) systems at the Internal Revenue Service (IRS) in order to address issues of identity theft, fraud, and mismanagement.

“IRS Commissioner John Koskinen is set to depart the IRS on November 13, 2017.  During his term, Commissioner Koskinen was unable to improve upon these technological and fraudulent abuse issues.  His departure serves as a natural inflection point, whereby the Department of Treasury and the new IRS commissioner can resolve longstanding problems related to outdated IT systems.

“In 2009, the IRS began developing the Return Review Program (RRP) to replace EFDS.  In 2010, the IRS declared EFDS “too risky to maintain, upgrade, or operate beyond 2015.”   Despite the recognized need to unplug the EFDS and get the RRP in place in a timely manner, the program is still in development, and is now estimated to be completed in 2022. 

“Anyone familiar with the long history of failed federal IT investments will not be surprised to learn that the RRP has had substantial cost overruns and produced inadequate results.  A February 2015 Government Accountability Office report noted that the RRP had exceeded its initial budget by $86.5 million.  According to a December 11, 2015 Treasury Inspector General for Tax Administration (TIGTA) report, during a two-year pilot program, the RRP missed 54,175 fraudulent returns totaling $313 million.

“The chances of falling victim to fraud seem to increase each year.  The hack of the credit reporting agency Equifax, revealed on September 7, 2017, exposed the personal information – including Social Security numbers – of 143 million U.S. customers.  During the 2017 tax season, these individuals will be at an increased risk of having their tax returns stolen and the IRS’s outdated legacy IT systems will only heighten the threat.”

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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