IRS commissioner: Agencies have too many management chiefs

HERSHEY, PA.--The proliferation of chief officers in agencies' senior management ranks is not necessarily good for government, the head of the Internal Revenue Service said Tuesday.

"Staff functions have been fragmented, so they're largely impotent," IRS Commissioner Mark Everson said at the Executive Leadership Conference. Everson also argued that chief information officers need not report directly to department secretaries. "I think that's ridiculous," he said.

The Executive Leadership Conference is presented by the American Council for Technology and the Industry Advisory Council. Government Executive is a co-sponsor of the event.

A better approach is to integrate agency management functions with business needs, Everson said. The IRS recently retooled its information technology organization in a bid to become more responsive to tax administration needs.

Among the changes was the creation of a consolidated application development organization called Applications Solutions, which absorbed the agency's Business Systems Modernization Office and integrated it with Information Technology Services, the legacy applications office.

W. Todd Grams, the IRS' CIO, also appointed Art Gonzalez, a recent private sector hire, into the new position of deputy CIO.

"Frankly, we are seeing, for the first time at the IRS, technology being a credible contributor to business results," Everson said. The agency's IT modernization effort was close to failure in 2003, around the time Everson joined the agency.

Recently, several projects under the program have gotten off the ground. For example, the Customer Account Data Engine, a relational database replacement for the 40-year-old Master File tax processing system, began handling a limited number of returns in 2004.

Despite progress, the agency is unlikely to meet the IRS Restructuring and Reform Act's mandate of accepting 80 percent of all tax returns electronically by 2007. Electronic returns exceeded half of the total for the first time during the 2005 filing season.

"If anything, I've been surprised that progress has been sustained to the degree it has," Everson said. "When that target was set, it was not really known how quickly the government would be able to move toward that, but by any measure, the strides have been remarkable."

Implementations of large systems often fail in government in part because of the amount of scrutiny attached to them, Everson said. Inspector generals, he said, "say, 'Oh, no, we looked at this pilot model over here, and we didn't get these three areas of functionality.' "

As a result, work slows down, "more money is spent and the functionality is not achieved … in part because nobody wants the second, even more further damaging IG report, " Everson said.

Processing tax returns would be easier if the tax system were less complicated, Everson argued. "Our tax code cries out for simplification," he said. A panel appointed by President Bush earlier this year delivered tax code reform recommendations to the Treasury Department Tuesday. Everson called the report "an important first step."