Customer Account Data Engine


Customer Account Data Engine

Customer Account Data Engine (CADE) is an update (currently under development) to the IRS e-file system, used for filing United States income tax returns.

Contents

Development

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 should 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, with an original operational date of November 1, 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, where the overwhelming majority of tax returns are still processed with the existing, older system. Current loads and tax returns processed by CADE are used for testing purposes to verify system functionality.[3]

The CADE system, although beset by regular setbacks such as funding and other issues, was previously expected to be fully operational by 2012, but is now targeted for 2018-2020.[citation needed]

Basic CADE functionality includes:

  • Ability to change client addresses manually
  • Process Married Filing Jointly & Separately without dependents (Married Once) returns
  • Process “Clean” Dependents (Dependents that are clearly legitimate) returns
  • Process Head-of-Household without Dependents or with “Clean” Dependents returns
  • Process Annual Archiving of tax returns
  • Process Limited Name Changes on Tax Returns
  • Process 1040 Schedules A, B, and R
  • Process 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 Census Bureau statistics
  • Process 1040 Schedules C, E & F w/o EIN supporting forms, including Sch. SE
  • Process 1040 Schedule D and supporting forms

Benefits

Benefits to the Public

CADE will increase the speed of tax return processing. Under the current system, processing tax returns can take as long as one week and taxpayers have to wait between 14–35 days for the IRS to deposit their refund or mail them a check. Using CADE, tax returns will be generally completed within 24 hours and deposits issued within 48–72 hours. Check mailing times have not yet been determined, but there is expected to still be at least one week.

Benefits to the IRS

CADE will also be capable of superior security and fraud protection mechanisms with automated detection of tax return errors and inconsistencies. This will be done in part by interfacing with other government systems to verify information. CADE 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 logging information accessed by IRS employees.

Compatibility

CADE is planned to eventually interface with the following IRS and 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.

See also

References

External links


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