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CERCABriefing

Terry MilhollandInternal Revenue Service Chief Technology Officer

October 21, 2010

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An ever changing world requires a nimble environment to meet the needs of the public

• New workforce expectations

• Increasing Electronic Filing

• Increasing inter-governmental data sharing

• Tighter security demands

• Increasing need for automation

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DevelopersSubject Matter

Experts

DataAnalysts

Business Users

Architects

DBAs

How do I know that the data on this report will match Susan’s report?

What is the original source of this data?

How are we going to integrate this data with the other data?

How can I tell which systems will be impacted if I make this data change?

I can’t give you the data until you tell me what you want

Our Challenge is to be able to Reconcile Different Perspectives… both Internal…

How can I ever make sense of all these different forms and interact with the IRS?External

Stakeholders

I can’t tell you what I want until I see the data

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TIGTADept of Education

IRS

GAO

Capital Hill

Treasury

We recommend you consolidate databases

Can I get a copy of that data?

What is your ten year spend plan around databases?

How can we leverage the IRS database architecture?

When will you address those material weaknesses around your databases?

…And External…

What is the difference between a 1040, 1040a, 1040EZ and 1040c?American

Public

We have consolidated – we now have twenty databases

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DevelopersSubject Matter

Experts

DataAnalysts

Business Users

Architects

DBAs

steuer impuesto

тягло

税

세금

…This Becomes Even More Difficult By Having to be Master Linguists

tax

External Stakeholders

impôt

belasting

imposto

tassaGAO

Dept of EducationTIGTA

Capital Hill

TreasuryIRS American Public

podatku

treth

vergi

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Unified Data Management – Enterprise Data Model

…A Data Centric Strategy Can Align Communications

The Data User Community

External Internal

Technical MetadataBusiness Metadata Metadata Bridge

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Real IRS Example

Line 37.....................................................................1040Line 21.....................................................................1040A750……………………………………………………...Electronically Filed 1040Adjusted Gross Income Compensation…………….Electronic Tax Administration MarketingAdjusted Gross Income Range…………………….. Electronic Tax Administration MarketingAdjusted Gross………………………………………..Earned Income Tax CreditAdjusted Gross Income EXAM………………………Examinations Operation Audit Database

These all represent different names for Adjusted Gross Income, where

• Each one exists in a different system• With it’s own format• And it’s own business rules• Plus gets updated annually from form changes

This is just one element but we have thousands of data elements across the IRS!

What do the following have in common?

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Data Format Example – Taxpayer Identification Number

TargetTarget

TIN TypeTIN

Type

987654321

Validity IndicatorValidity

Indicator

Manage Taxpayer Account Target Database Format

Manage Taxpayer Account Target Database Format

0987654321

100987654321

9876543210

TodayToday

System 1(10 char)System 1(10 char)

System 2(10 char)System 2(10 char)

System 3(11 char)System 3(11 char)

System 4(12 char)System 4(12 char)

Packed DecimalPacked Decimal

Validity indicatorValidity indicator

EBCDICEBCDIC

CharacterCharacter

01987654321 ASCIIASCII

Source IndicatorSource

Indicator

Taxpayer Identification Number (TIN) Type/

Validity Indicator

Taxpayer Identification Number (TIN) Type/

Validity Indicator

TIN Type/ Validity Indicator

TIN Type/ Validity Indicator

Validity IndicatorValidity

IndicatorTIN

TypeTIN

TypeSource

IndicatorSource

Indicator

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. . . and we are moving toward realizing that Data-centric Vision for the IRS.. . . and we are moving toward realizing that Data-centric Vision for the IRS.

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This Data Centric Strategy will help drive our Focus for a 3+ Year Program to become World Class

• Complete industry standard web platform (irs.gov, RUP/EUP)

• Capability Maturity Model Integration (CMMI) / Information Technology Infrastructure Library (ITIL)

• Data Centric (e.g. CADE2 DB+)• Simplify governance and re-balance the

organization towards IT “doers” vs. “managers”

• Pilot and launch new end user technologies to improve productivity

• Improve end user support effectiveness

• Complete CADE2 to improve the use of data across the IRS

• Radically rationalize Applications Development and Maintenance portfolio

• Provide standardized services that use shared, commoditized technology (e.g., Tiered storage)

• Build internal capability through recruiting and training in leadership and key technology areas to reduce reliance on vendors• Utilize cost and performance data throughout IT• Partner with the business to more effectively plan demand

Wave 1 0-18 monthsWave 2 12-36 months

Wave 3 24-54 months

On-going foundational on-going

• Deliver web services (e.g., taxpayer transcripts, DoE functionality) using Agile development

• Reduce Operations& Maintenance costs/ increase capacity through virtualization and Operations Excellence program

• Effectively address risk management across data and operations

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Delivery of CADE 2 is our first implementation of the data centric model … all others are following…

Data Model

Relational Database

Production use of the Database

Move toward Daily Processing

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…While we continue to maintain and improve current BSM systems…

Current CADE Release 5.2 successfully deployed on January 18, 2010, delivering the tax year 2009 filing season tax law changes affecting individual taxpayers and other technical improvements.

As of August 30, 2010, current CADE has posted over 41.1 million returns and processed more than 35.7million refunds totaling in excess of $66 billion, which were delivered to taxpayers on average 5 days faster than the legacy systems.

CURRENT CADE MODERNIZED E-FILE

• Over 8 million returns (IMF and BMF) have been submitted and over 6.2 million have been accepted.

• Approximately 6.8 million BMF returns have been submitted

• Approximately 1.2 million IMF returns have been submitted

• Modernized e-File has an average 8% processing error rate, compared to 19% for transcription-based paper processing.

• Seventeen states are participating in the MeF Fed-State program. Over 1.16 million state returns have been received through MeF.

MeF Release 6.1 deployed on January 7, 2010, and delivered the Business Master File (BMF) returns and the entire infrastructure for Release 6.1. The Individual Master File (IMF) component of MeF was delivered on February 17, 2010.

AMSFollowing a successful pilot completion on September 4, 2009, AMS 2.1 deployed into production nationwide to all AMS users on September 15, 2009: enhancing views of tax account information and system-wide access to the Correspondence Imaging System images via a secure protocol to protect network traffic.

Since the Release 2.1 deployment, over 1.1 million correspondence image view requests have been processed.

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Filing Season

Affordable Care Act (ACA)

Information Reporting and Document Matching (IRDM)

Return Review Program (RRP)

Filing Information Return Electronically (FIRE)

Foreign Account Tax Compliance Act

(FATCA)

Internet Strategy Portal (IRS.GOV, EUP, RUP, PUP e-Authentication Secure email Web Services (e.g. e-Transcripts)

As well as other essential projects …

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Questions?