Bloomberg News

IRS Ends 18-Year Streak on U.S. Audit High-Risk List

February 15, 2013

After 18 consecutive years of criticizing the Internal Revenue Service’s balky computers, the Government Accountability Office is giving the tax agency a thumbs-up.

The GAO removed the IRS from its list of 30 “high-risk” areas that make the U.S. government most vulnerable to waste and fraud.

“Progress has been made in addressing significant weaknesses in information technology and financial management capabilities,” GAO wrote yesterday, citing the 2012 implementation of a program that processes tax returns more quickly.

GAO first put the tax agency on its watch list in 1995, citing “long-standing and pervasive problems which hampered the effective collection of revenues and precluded the preparation of auditable financial statements.”

Douglas Shulman, who was IRS commissioner until November 2012, cited the technology improvements as an accomplishment in his final speech last year. He pointed to switching from weekly processing of tax returns and other data to daily updates.

“This was a multi-year, incredibly complex undertaking that went to the heart of systems that process trillions of dollars in tax revenue,” he said.

The GAO added two programs to the high-risk list: the government’s ability to manage climate-change risks and gaps in weather satellite data.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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