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IRS initiates new database, processing system.

The IRS has a new way of doing business. A modernized system designed to replace the IRS central database of taxpayer account information has processed its first live returns. The returns being processed are the most basic of 1040EZ forms and have a narrow range of taxpayer information.

The Customer Account Data Engine (CADE) will be used to process more than 2 million 1040EZ tax returns during the 2005 filing season. The CADE system is scheduled to be phased in over several years by processing increasingly more complex tax returns in stages and ultimately replacing the 40-year-old system the IRS now uses to process tax return data.

When fully operational, CADE will be a modern database that will house tax information for more than 200 million individual and business taxpayers. It replaces an antiquated system called the master file. The magnetic tape-based system came into use in the 1960s. It takes a week to update records and creates delays in providing accurate account information for taxpayers. When completed, CADE will provide a variety of benefits to taxpayers, such as faster refunds, along with daily transaction postings and account updates.

This article ran in the Ohio e-CPA Weekly on July 26, 2004.
COPYRIGHT 2004 Ohio Society of Certified Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Title Annotation:National
Publication:Catalyst (Dublin, Ohio)
Date:Sep 1, 2004
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