Customer Account Data Engine
The Customer Database Access Engine (CADE) is a system currently being developed by the Wage and Investment division of the Internal Revenue Service (IRS) to replace the current legacy system.
Development of CADE
The purpose of the new system is to replace the current IRS processing and database system the IRS has been using since 1969. The new system will provide superior security, advanced processing techniques, and ultimately replace the current IRS Master Files system[1].
Development of CADE was first discussed in 2000 in the IRS Modernization Plan. The original operational date was set at Nov 1st 2006. Programming and development began in 2003 but actual processing on the system was delayed until 2005.[2]. The system initially processed only 1040EZ tax returns, the simplest type of electronic tax returns. In 2006 the capacity was increased for the system to begin processing a limited number of more complex 1040 forms and other support forms. In 2007 the system began to process Schedule C forms and other more complex tax forms.
Because the system is still unable to handle the full load of IRS tax returns, a hybrid approach is used by the IRS with the overwhelming majority of tax returns still being processed with the old system. Current processing loads and returns done by CADE are used for testing purposes to determine the systems functionality.[3]
The system, although beset by regular set backs due to funding, is expected to be fully operational by 2012.
The basic functionality of CADE included ability to process the following items:
- The ability to change client addresses manually
- Processing of Married Filing Jointly & Separately without dependents (Married Once)
- Processing of “Clean” Dependents (Dependents that clearly legitimate)
- Processing of Head-of-Household without Dependents or with “Clean” Dependents
- The ability to do Annual Archiving of tax returns
- The ability to do Limited Name Changes on Tax Returns
- Processing of 1040 Schedules A, B, and R
- Processing of 1040A Schedules 1, and 3
- Ability to match tax return data to Social Security Administration (SSA) information for verification.
- Ability to interface with and update the Census Bureau statistics
- Processing of 1040 Schedules C, E, F w/o EIN their supporting forms, including Sch. SE
- Processing of 1040 Schedule D and its supporting forms
Benefits of CADE
Benefits to the Public
CADE will offer many benefits to the public and the IRS. Foremost among these is the speed in which it will be able process tax returns. Under the current system processing tax returns can take as long as one week and customers have to wait between 14-35 days for the IRS to deposit their refund or mail them a check. Under the CADE processing will be complete generally within 24 hours and deposits issued within 48-72 hours. Check mailing times have not yet been determined, but there will still be a significant decrease in wait times.
Benefits to the IRS
CADE will also be capable of superiors security and fraud protection mechanisms by being able to more easily detect errors and inconsistencies in tax returns. This will be done in part by interfacing with other government systems to verify information. The system will also provide superior in-house functionality for the IRS to access information, reports, compliance issues, notices, and revenue accounting. The system also provides superior internal security by using and tracking what information is accessed by employees.
Compatibility
CADE will be able to interface with the following governmental database systems for enhanced tracking and reporting:
- Refund Information File (RFIF)
- Questionable Refund Program/Refund Interest Program/Electronic Tax Administration (QRP/RIP/ETA)
- Duplicate Direct Deposit (DDD)
- Statistics of Income (SOI)
- 701 Exec, Microfilm Replacement System (MRS)
- IMF Weekly Reports
- Return to CPE and IMF
- Taxpayer Address Request (TAR) – Legacy Account Formatted File (LAFF) Summary
- Corporate Files Online (CFOL)
- Interim Revenue Accounting Control System (IRACS) Recap Data
- Interim Revenue Accounting Control System (IRACS) Refund Data
- Financial Management Information Systems (FMIS)
- Reciprocal Accounting Control Record (RACR)
- Individual Master Files (IMF)
- Electronic Certification System (ECS)
- Microfilm Replacement System (MRS)
- Individual Return Transaction File Online (IRTFOL)
- Return Transaction File (RTF)
- Refund Timeliness Program (RTP)
- Enterprise System Management (ESM)
- Taxpayer Account Transcripts
- Send to Current Processing Environment (CPE)
- LARS-format Balance and Control Data
- Balancing Reports
- Security Administration System (SAS) Reports
- Service Center Input Processing Automation System (SCIPAS) Reports
- Accountability Acceptance Vouchers (AAV) Reports
- Obligation Balance Validation Reports
- Weekly Obligation Balance Data
- CADE Initialization to IMF.
- IMF Annual Conversion
- CPE for Address Change – this information goes to the following CPE systems:
- Enhanced Entity Index File (EEIF)
- Key Index File (KIF)
- Name Search File (NSF)
- National Account Profile (NAP)
- Address Error Report
- CADE R2CPE Reports
- CPE for Discriminant Index Function (DIF) Processing
- Social Security Administration Self Employment Data
- US Census Bureau Economic Data (Census)
Impact on industry
CADE is expected to impact the tax preparation and tax bank product industry in a significant way. By enabling deposits to be made within 72 hours, the new system will defeat the purpose of refund anticipation loans. It is also expected to greatly increase the demand for E-File.
The only setback will be for taxpayers who do not have established bank accounts to receive direct deposit. The wait time for checks by mail will still be a week at minimum.
References
External links
- "Treasury office faults IRS computer security". USAToday. October 16, 2008