Late Bloomer

Tracking Troublemakers

The innovative technology will also greatly increase the IRS' ability to track suspicious patterns of taxpayer conduct. "In the modernized world, we are going to integrate our existing capability with the core tax system, which keeps track of all taxpayer data," explains Cosgrave.

Because the IRS still uses antiquated tape technology, it can't access taxpayer data on "a random basis," Cosgrave says. "That problem means we can't use the core source of data for taxpayer searches."

But that'll soon change, and entrepreneurs beware. "[It'll be] much easier to ferret out the egregious cases and serve them up in a more aggressive enforcement model," says Dolan, "and at the same time look for the people who really just need a little help to get it right."

While much remains to be done, Dolan says that for the first time in many years, the IRS has finally accumulated most of the ingredients needed for modernization. "They have the arrows more lined up now than ever before," he says. "It is very likely that they will do it right this time."

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This article was originally published in the January 2001 print edition of Entrepreneur with the headline: Late Bloomer.

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