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Regulation and Compliance > Federal Regulation > IRS

3 possible weaknesses in IRS PPACA planning

By Allison Bell

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Inspectors at the Treasury Inspector General for Tax Administration (TIGTA) — a watchdog agency that keeps tabs on the Internal Revenue Service (IRS) — are wondering whether the IRS is really ready for the wave of consumer health insurance confusion that’s about to wash over it.

TIGTA officials report that the IRS applications development team finished promised programming changes for the 2014 return processing year so late that it couldn’t get other IRS divisions to continue to help it with final testing.

The test situation could get worse in the coming year — processing year 2015, TIGTA officials say.

“Greater demands will be placed on [final integration test] program resources to address significant system changes as a result of implementing provisions of the [Affordable Care Act] and other applications planned to deploy during [processing year] 2015,” officials say.

When it comes to “Obamacare” headaches — problems related to the Patient Protection and Affordable Care Act (PPACA) public exchange program — the IRS got off easy this year.

The IRS, an arm of the U.S. Treasury Department, set up a PPACA exchange data hub for the U.S. Department of Health and Human Services (HHS), but HHS has been responsible for most exchange plan-related interactions with consumers and employers in 2014.

The IRS took automated queries about exchange users, spat taxpayer information out to the exchanges, and tried to keep hackers from hacking the data. HHS call centers had to handle the calls from the public.

Now, IRS taxpayer helpers are gearing up to take calls from consumers, tax preparers, and tax policy experts about premium tax credit reporting forms, coverage reporting forms and coverage mandate exemption forms complicated enough to put visions of glory in the minds of top executives at the big tax firms.

So, what kinds of problems did TIGTA inspectors find at IRS? Read on.  

IRS

1. The IRS enterprise systems testing team has problems with asking for help

The IRS had so much trouble with 2014 processing year systems testing partly because the applications team asked for other divisions to help it with testing until mid-2014. In the real world, TIGTA officials say, testing went on until March 2014.

Integration testers need to stick to deadlines better, but the IRS also needs to find the funding to have other divisions help the testers better, officials say.

Crumpled tax form

2. The IRS has trouble measuring how well it’s integrated its systems

Managers of the HHS HealthCare.gov effort had trouble with communicating about how well finishing HealthCare.gov was going, other than to offer members of Congress assurance that everything was going great.

TIGTA officials now see problems with describing integration progress cropping up at the IRS processing year 2015 effort.

“Management oversight should include the use of performance metrics to monitor final integration test effectiveness,” TIGTA officials say.

One step analysts could take would be to analyze the test tax returns that are routed to the IRS error resolution system, officials say.

In one case, officials say, an integration testing analyst did look at the test returns that went wrong and discovered that the errors were the result of problems with training workers how to prepare valid test tax returns.

Tape measure

3. The IRS needs a better system for comparing the final integration test environment with the actual filing season environment

At this point, the testing environment is supposed to be like the real-world environment, but the IRS has no formal way to show that the testing environment is comparable to the filing season environment, TIGTA officials say.

The IRS has set up a group that’s supposed to set up environment baselines, but the agency has not yet started using that process to assess the integration testing team’s environment, or even scheduled a time to start doing that, officials say.

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