OVERSIGHT OF THE INTERNAL REVENUE
SERVICE
TUESDAY, MARCH 26, 1996
U.S. SENATE,
COMMITTEE ON GOVERNMENTAL AFFAIRS,
Washington, DC.
The Committee met, pursuant to notice, at 9:27 a.m., in room
SD-342, Dirksen Senate Office Building, Hon. Ted Stevens, Chair-
man of the Committee, presiding.
Present: Senators Stevens, Glenn, Levin, and Pryor.
OPENING STATEMENT OF SENATOR STEVENS Chairman STEVENS. I have been notified that the Senators are going to be a little late, so since we are all here, why don't we start a little early.
Our first panel is Stephen Street from the Alaska Business Development Center and Susan Anderson from the Lower Yukon Economic Development Council.
I will just make a short introductory statement here this morning. The Internal Revenue Service is one of the most critical interfaces between the Federal Government and most Americans. It really touches every American at home and at work. The efficiency and effectiveness of the IRS depends on its use of information technology now. The IRS must change the way it does its work in order to keep up with the rapid changes that define the information age in our country.
Today, our hearing will focus on whether the IRS has the capability to fulfill the needs of the American public as we near the 21st Century. The taxpayer data entrusted to the Internal Revenue Service is among our most personal and private information, and one of the realities of this age is the threat to privacy and the possible manipulation of personal data.
We are very concerned about the findings of the National Research Council in its study of the Tax System Modernization Program (TSM), and I quote: "The gap between the current TSM security posture and the minimum security acceptable will continue to widen, thus virtually ensuring massive security breaches in the coming years." The IRS appears so far not to be able to protect taxpayers with TSM. Correction of even minor errors in tax return processing can be extremely difficult and costly to taxpayers. It takes considerable time, effort and money to make those corrections, but it would be impossible to correct the damage to the privacy of taxpayers and their families if the IRS cannot protect this taxpayer data.