US Internal Revenue Service Terminates Critical $10 Million IT Project Just Before Deployment

This is a bit different type of IT project failure that still leaves you shaking your head in wonder.

According to this Government Executive news report, the US Internal Revenue Service (IRS) Inspector General (IG) released an audit report this week detailing the demise of the My IRS Account (MIRSA) Project.

Quoting from the IG report,

"The MIRSA project was designed to improve the IRS’ ability to meet taxpayers’ needs by developing secure online procedures for electronic tax return interaction. The intent of the project was to develop a project that would provide taxpayers a means to securely view their tax account and return information online, as well as provide tools for self-service assistance. It was also intended to be used as a prototype for future delivery of new web-based projects. Successful implementation of this effort is essential to support taxpayers’ ability to electronically fulfill their tax responsibilities and is critical to the long-term success of the IRS Modernization Program."

In fact, the MIRSA project was meant as a way for the IRS to meet the statutory requirements of the IRS Restructuring and Reform Act of 1998 and the Electronic Government Act of 2002.

MIRSA was started in April 2006, and was supposed to go live with Release 1 in December 2008 (it's original go live date was January 2008, but the IG said that "some challenges outside of project control" forced the delay).

However, the IG continues,

"Release 1 of the MIRSA project was completed and near deployment when the IRS decided to terminate the project in December 2008. At about the same time that this release was scheduled to be deployed, the IRS Strategic Plan for 2009-2013 was developed with a renewed focus on taxpayer experience. One of the three strategic goals was to 'improve service to make voluntary compliance easier.' The Plan calls for the IRS to take the following service-specific actions:

  • Incorporate taxpayer perspectives to improve all service interactions.
  • Expedite and improve issue resolution across all interactions with taxpayers, making it easier to navigate the IRS.
  • Provide taxpayers with targeted, timely guidance and outreach.
  • Strengthen partnerships with tax practitioners, tax preparers, and other third parties in order to ensure effective tax administration.

In conforming to the new Plan, IRS executives decided to reexamine the MIRSA project for its ability to fully meet taxpayers’ needs. After reviewing the functionality of the project, the executives decided a long-term strategy should be in place before proceeding with the MIRSA project and, therefore, terminated the project."

So, if I understand this correctly, MIRSA did not adequately meet the new IRS strategic goals, therefore was terminated. Yet, interestingly, this 2008 National Taxpayer Advocate  report to the US Congress says that MIRSA was indefinitely suspended,

"... in light of continuing security concerns and competing modernization priorities."

Okay, this happens, and maybe it was for the best, although the extremely late MIRSA project termination also seems to indicate that the strategic planning process at the IRS needs some serious updating itself.

Moreover, as the IG noted, the termination means that the requirements of the IRS Restructuring and Reform Act of 1998 and the Electronic Government Act of 2002 are still not being met, and it is unclear when they will be. The National Taxpayer Advocate assessment of the termination was a bit more blunt:

"Suspension of the 'My IRS Account' project is a huge step backward for both the taxpayers and the IRS, and adversely affects the declared strategic goal of improving taxpayer service."

 However, the IRS said that the MIRSA project wasn't totally in vain, since it had: 

"expressed its intent to reuse most of the hardware and functionality of MIRSA Release 1 in a future project resurrection."

This leaves open the question about why would you need to resurrect it, if your strategic planning review just indicated that it wasn't such a great fit?

In fact, reading the National Taxpayer Advocate report, the implication was that it wasn't a strategic fit issue as much as the aforementioned security issues that did MIRSA in. The Advocate's recommendation is for the IRS to "resolve the security issues" and deploy MIRSA as soon as possible.

The IG, while ignoring the strategic fit and security questions, did point out that the IRS hadn't taken the formal termination steps outlined in Treasury Directive 84-01, Information System Life Cycle, Version 3.0, dated March 2002, needed:

 "to preserve vital information in the event the system, or portions thereof, is reactivated."

The MIRSA project team only followed informal procedures that it apparently had developed.

Whether the US taxpayers get any future value for this $10 million project remains to be seen, but given past history, I tend to doubt it.

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Willie D. Jones
 
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