GAO reviewed the Internal Revenue Service's (IRS) Tax Systems Modernization (TSM) implementation plan, focusing on: (1) human resource planning for TSM; (2) strategies for meeting the human resource needs of the new IRS environment; and (3) IRS experience in implementing the Automated Underreporter (AUR) project.

GAO found that: (1) although IRS has identified how it plans to use human resources in the modernized environment, it has not yet determined workforce requirements, assessed the current workforce's abilities, or developed detailed retraining and redeployment plans; (2) although IRS estimates that over 24,000 workers will no longer be needed for the jobs they are now doing, it has pledged that no career or career-conditional employees will lose their jobs because of TSM; (3) IRS plans to reassign some employees to new compliance and customer service jobs, reduce seasonal employment levels, and make selective use of voluntary early-out options; (4) IRS was not adequately prepared to redeploy the almost 1,900 employees displaced at 4 service centers due to its failure to conduct comprehensive human resource planning while implementing AUR; and (5) some IRS employees may have to be reassigned again because IRS began reassigning staff before it negotiated AUR redeployment guidelines.