Because of serious management and technical weaknesses, GAO has included the Internal Revenue Service's (IRS) tax systems modernization effort on its list of federal programs at high-risk for waste, fraud, abuse and mismanagement. Congress limited IRS' ability to spend funds on information technology until the agency submitted an expenditure plan. GAO reviewed this plan. This report discusses (1) whether the plan satisfies the conditions specified in IRS' fiscal year 1998 and 1999 appropriations act, (2) whether the plan is consistent with earlier GAO recommendations on IRS' systems modernization, and (3) other GAO observations on the modernization effort.

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