August 29, 2023
Secretary Stephen Cummings
Office of the Secretary of Finance
Patrick Henry Building
1111 East Broad Street
Richmond, VA 23219
RE: Funding for Replacement of Virginia Department of Taxation’s Integrated Revenue Management System
Dear Secretary Cummings:
The Virginia Society of Certified Public Accountants (VSCPA) Tax Advisory Committee is writing to urge Governor Youngkin to include funding for the Virginia Department of Taxation (TAX) in his introduced budget for the 2024-2026 Biennium in order for TAX to replace its aging legacy tax system.
TAX’s Integrated Revenue Management System (IRMS) is used to collect most of the taxes remitted to the state, including individual income tax and sales taxes that together comprise the majority of net General Fund revenue. IRMS launched nearly twenty years ago and was built on a programming language (PowerBuilder) that is no longer used in application development nor taught in educational institutions. These limitations have created significant cybersecurity risks and jeopardize TAX’s ability to comply with federal regulations for the handling of Federal Tax Information (FTI), and potentially exposing Virginia taxpayer data.
This antiquated technology has become increasingly difficult for TAX to support, make system enhancements and meet taxpayer and tax practitioner expectations in a timely and cost-efficient manner. The limited available support for IRMS has been primarily dedicated to addressing legislative mandates, annual filing system changes and major defects. Resource constraints have often resulted in TAX requesting delays to effective dates of tax policy legislation. The inability to utilize automation techniques prolongs development cycles for new features, the testing for which is time consuming and manual. IRMS deficiencies have also hindered the TAX’s capacity to provide the type of online and electronic services that taxpayers and tax practitioners deserve, many of which could expedite and limit the need for interactions with the agency.
The Committee believes it is essential that TAX procure a modern integrated tax system solution that includes vendor hosting and managed services. Such a system will provide a fully integrated and functional taxpayer portal that is not possible through IRMS. This portal will allow taxpayers and tax professionals the ability to access account information online, submit online requests, and more easily file returns and make payments. Moreover, investing in a new system will allow TAX the ability to better assist taxpayers and provide reliable implementation and execution of future tax law changes.
Virginia businesses and individual taxpayers deserve a tax system that prioritizes and provides service, security, and accountability. Modernizing the state’s tax software system will satisfy these goals while promoting good stewardship of public resources.
The VSCPA is the leading professional association in the Commonwealth dedicated to empowering CPAs to thrive. Founded in 1909, the VSCPA has nearly 13,000 members who work in public accounting, industry, government and education. Please feel free to contact me or VSCPA Vice President, Advocacy Emily Walker, CAE, at (804) 612-9428 or
[email protected] if we can be of further assistance.
Sincerely,
Sarah Adams, CPA
2023–2024 Chair
Tax Advisory Committee Virginia Society of CPAs
CC: Deputy Secretary of Finance Charles Kennington
Tax Commissioner Craig M. Burns
VSCPA Legislative Counsel Patrick Cushing