The challenge faced by Lockheed Martin Energy Systems' Data Systems Research and Development (DSRD) group is assisting the IRS in its tax system modernization effort. It's no easy task, considering the IRS receives 220 million 1040 tax returns and 450 million business tax returns each year. Add to that the 50 million inheritance tax returns, 75 million Uniform Gift to Minor forms and 175 million forms for IRAs, 401k and other retirement or stock plans and it's easy to see the relatively small IRS staff has a considerable workload.
That's where DSRD's Mary Theofanos and several colleagues plan to assist.
"Our goal is to help the IRS modernize its tax system and make it more efficient," Theofanos said. "The IRS needs to update its outdated computer system with current technology, which will permit the agency to better serve the American taxpayer plus provide increased capabilities to communicate and transfer information."
Updating and providing the IRS with a modern, streamlined system is more difficult than merely installing a new network of computers, Theofanos says. In addition to the sheer volume a system must handle, the information must be safeguarded to protect the privacy of the millions of businesses and people filing tax returns. Fortunately, several methods exist for maintaining confidentiality. These include encryption, digital signatures and access controls, such as passwords and "fire walls" that prevent hackers from accessing records.
DSRD began working with the IRS about two years ago under a government interagency agreement. The IRS requested technical support for the extremely complex and massive project, and DOE offers considerable technical talents and scientific resources, Theofanos noted.
A major task essential to the IRS Tax Modernization program involved determining the level of encryption, which is a system of encoding, needed to ensure privacy. Researchers also had to devise a complex network to allow the 125,000-plus IRS employees to communicate and retrieve records instantaneously, said Rudy Navarro, also of the DSRD. In addition, DSRD is designing the system to include fraud detection. All that remains of this portion of DSRD work is testing, fine-tuning and implementing the system.
For taxpayers, the payoff will be the improved ability to submit tax forms electronically with immediate response on accepting the tax information and correcting the data if necessary. Taxpayers will also be able to call the IRS with questions and receive immediate responses. Currently, this information is typically handled with correspondence, which takes days or weeks.
The new system, which could be in place within a few years, will also help the IRS become a more customer-service-oriented agency, Navarro said.
Initially, DSRD is focusing on modernizing and streamlining the system for handling the 220 million 1040 tax form returns. With the new system, the IRS will also be able to identify the estimated 10 percent to 15 percent of the population who, with the current system, fail to submit tax returns. Navarro expects that abuse of the system to be greatly reduced or eliminated.
DSRD serves Lockheed Martin Energy Research Corporation, which manages ORNL, one of DOE's multiprogram national research and development facilities, and Lockheed Martin Energy Systems, which manages the Oak Ridge Y-12 Plant and the Oak Ridge K-25 Site.