NATCPCERCA Customer Account Data Engine CADE Update

1
NATCP/CERCACustomer Account Data Engine (CADE)
Update

• September 3, 2008

2
Introductions
3
Agenda

• CADE Overview
• History
• Processing Statistics
• Release Highlights
• CADE R3
• CADE R4
• CADE R5
• Questions?

4
Why CADE?

• The age and complexity of the Current Processing
  Environment (CPE) inhibits modernization and
  technological advancements in the Customer
  Service and Compliance arenas.
• The Customer Account Data Engine (CADE) will
  provide the foundation for managing taxpayer
  accounts to achieve the IRS modernization vision.
  It consists of databases and related
  applications that will replace the IRS official
  repository of taxpayer information, the Master
  File.
• The IRS Vision and Strategy plans for a phased
  replacement of IRS computer systems to better
  support todays tax laws, policies, and taxpayer
  needs. CADE plays a key role in realizing this
  Strategy.

5
CADE and the Modernized IRS

• CADE posts and settles taxpayer accounts on a
  daily basis versus the weekly cycle method used
  in the Individual Master File (IMF) Processing
  Environment
• CADE dynamically posts and settles each
  transaction individually versus the batch system
  in IMF
• CADE will contain the modernized authoritative
  data store for tax account data
• CADE sets the standards for the other modernized
  systems by using business rules, standardized C
  coding in XML format

6
CADE Functionality

• When fully implemented
• CADE system primary functions
• Accept, validate, and store account data
• Post and settle accounts Dynamically
• Manage issues (records, notifies)
• Retrieve data (online transactions) for other
  applications
• Ensure CPE system integration
• CADE will be the single authoritative source for
  taxpayer account information
• CADE database will enable development of
  subsequent modernized systems
• CADE is the cornerstone of the IRS modernized
  systems

7
Release Approach

• CADE incrementally developed over multiple
  releases
• Deploy two releases per year
• Simplest accounts moved first increasingly
  complex tax returns processed with each
  incremental release
• Accounts are returned to IMF if incoming
  transaction is outside current CADE release scope
• Accounts are either on CADE or on Master File
  never split between systems

8
Release Highlights

• Release 1.2January 2005
• Tax law changes

• Release 1.3.1September 2005
• Address change on tax return

• Release 1.1July 2004
• Single never married, no dependents
• Refund or even balance
• Form 1040EZ (Electronic, Telefile Paper)

• Release 1.3.2
• January 2006
• Forms 1040 and 1040A with no
• attached forms or schedules
• Tax law changes

• Release 2.1August 2006
• 1040 Schedules A, B and R
• 1040A Schedules 1 and 3
• Head of Household without dependents
• Non-return based address changes
• Limited name change on return

• Release 2.2March 2007
• 1040 Schedules C, F and SE (without EIN), as well
  as supporting forms
• 1040 Schedules D and E and supporting forms
• Married filing jointly or married filing
  separately (only married once)
• Filers with certain dependents
• Telephone Excise Tax Refund (including 8913 and
  1040EZT)
• Tax law changes

• Release 3.1.a August 2007
• Disaster Area Designation
• Enterprise Application Integration Broker
  (Online Address Change)
• In-Transit Indicator for LAFFOL
• Validate Module Balance

9
Release Highlights (cont)

• Release 3.2- January 2008
• Certain Math Error notices
• Tax Law Changes
• Data conversion
• Form 2441 Child Dependent Care credit
• EIC
• Dependent database
• Split refund
• Indicates functionality to be deployed
  February 2008

• Release 4.1 - July 2008
• Surviving Spouse
• Decedent Returns
• R2CPE Archive/Delete
• Prior Year Processing
• TOP Overpayment Offsets
• Removal of Hard Coded Literals
• CR 394 Change to Address Processing
• Generate CP08 (Additional Child Tax Credit)
• Generate CP53 (Electronic Fund Transfer not
  Honored)
• Incorporate Legislative Economic Stimulus
  Requirements

• Release 4.2 - January 2009
• Last Name Change
• Technical Enhancements to The System
• Payment Posting and Return Posting Transaction
• Revenue Receipt BC
• Reuse CPE Common Code
• CI Refund Hold
• Penalty and Interest Potential
• Extension of Time for Filing
• Credit Elect
• EOY/BOY (Data Conversion and Initialization)
• Filing Season Changes
• Incremental Database Improvements (If Required
  for Filing Season Changes)
• Incorporate Legislative Economic Stimulus Phase
  2 Requirements

10
CADE Milestones
Release 2.2 deployed
First full year in production completes
Release 1.2 deployed first full year in
production begins
Release 1.3.2 deployed
Release 2.1 deployed
Release 1.3.1 deployed
Release 4.1 deployed
Release 3.1 deployed
Release 3.2 deployed
Release 1.1 deployed
Jul 2004 Jan 2005 Mar 2005 Sep 2005
Dec 2005 Jan 2006 Feb 2006 Jun 2006 Aug 2006
Mar 2007 Oct 2007 January 2008 July 2008
3.2 million taxpayers initialized 1.4 million
returns posted 427 million in refunds
CADE hits 1 billion in refunds
54 million taxpayers initialized
300,000 taxpayers initialized 3,000 returns
posted
CADE posts 1 million returns
11.2 million returns posted 11.6 billion In
refunds
76.4 million taxpayers initialized
13.3 million taxpayers initialized 7.3 million
returns posted 3.4 billion in refunds
34 million returns processed, posting over 30.3
million for a total of 44 billion in refunds
11
CADE Processing for this Filing Season

• CADE deployed Release 3.1 on August 08, 2007
• CADE deployed phase 1 of Release 3.2 on January
  14, 2008
• Phase 2, Supplemental Release 3.2, was deployed
  on February 19, 2008
• CADE Economic Stimulus deployed on April 20, 2008
• To date Approx. 22 million rebates processed
  resulting in 18 million rebate checks distributed
• CADE deployed Release 4.1 on July 28, 2008
• The number of returns posted in CADE this year
  has surpassed the total amount posted in CADE for
  all previous years
• In 2006, CADE posted a total of 7.3 million
  returns
• 2007, CADE posted over 11 million returns
• As of August, 2008, CADE has processed 34 million
  returns, posting over 30.3 million for a total of
  44 billion in refunds

12
Release 3 Overview

• Due to the complexity of this release, Release 3
  was designed to be deployed in phases to minimize
  risk
• The first phase Release 3.1 permitted processing
  of
• Disaster Area Designations
• Address changes in Real Time via Enterprise
  Application Interface Broker
• The second phase Release 3.2 Filing Season
  introduced
• Filing season changes including late legislation
• Data Model-Related Changes to position for
  processing of payments in Release 4
• Issuance of Math Error Notices
• The last phase Release 3.2 HVC introduced and
  high volume functions
• Form 2441 / Form 1040A Schedule 2 Credit for
  Child And Dependent Care
• 1040 Schedules EIC and Their Supporting Forms
• Split Refund Form 8888
• Deploying the Economic Stimulus Package nearly
  doubled the total number of refunds released and
  required simultaneous development

13
Release 4 Overview

• Focus is now on CADE Release 4
• Major objectives delivered in release 4.1
  Deployed 7/28/2008
• Surviving Spouse
• Decedent Returns
• R2CPE Archive/Delete
• Prior Year Processing
• TOP Overpayment Offsets
• Removal of Hard Coded Literals
• CR 394 Change to Address Processing
• Generate CP08 (Additional Child Tax Credit)
• Generate CP53 (Electronic Fund Transfer not
  Honored)
• Incorporate Legislative Economic Stimulus
  Requirements

14
Release 4 (Contd)

• Major objectives for release 4.2 (Jan. 2009)
• Build A
• Last Name Change
• Technical Enhancements to The System
• Build B
• Payment Posting and Return Posting Transaction
• - Returns received with Full Payment of
  Balance
• - Estimated Tax Payments
• Revenue Receipt BC
• Reuse CPE Common Code
• CI Refund Hold
• Penalty and Interest Potential
• Extension of Time for Filing (with and without
  remittance)
• Credit Elect

15
Release 4 (Contd)

• Major objectives for release 4.2 (Contd)
• Build C
• EOY/BOY (Data Conversion and Initialization)
• Build D
• Filing Season Changes
• Incremental Database Improvements (If Required
  for Filing Season Changes)
• Incorporate Legislative Economic Stimulus Phase
  2 Requirements

16
Release 5 Overview

• Major objectives to be delivered in release 5
• Name Change (TC013 - Change the Name on an
  account through IDRS)
• Address Change (TC014 - Change the Address on an
  account through IDRS)
• Request entity or module deletion on and off the
  TIF (TC902/901)
• Provide ZIP Code change (TC019) through IDRS
• Residential Energy Credits (Form 5695)
• Passive Activity Credit Limitations (Form 8582)
• Recapture of Low-Income Housing Credit (Form
  8611)
• Credit for Qualified Retirement Savings
  Contributions (Form 8880)
• Tuition and Fees Deduction (Form 8917)

17
Release 5 (Contd)

• Technical Improvements for release 5 (Contd)
• Business Transaction Based Recovery
• Balance Controls Incremental Improvements
• Historical Data Integration
• CADE Initialization Approach
• Return to CPE (R2CPE) Architecture
• Continuous Online Processing
• Complete conversion of existing services into the
  Component Framework
• EOY/BOY (Data Conversion Initiation)
• Incremental Database Improvements

18
Questions?