The IRS is using some computer software that it hasn't paid for, and is paying for other programs its employees aren't even using, according to a new audit released Tuesday that said the tax agency could be violating copyright laws.
For at least three pieces of software, the IRS has installed programs it hasn't purchased, or is using the product on more computers than it paid for. And on another eight pieces of software, the agency was paying for more licenses than it was actually using. In yet another eight cases, the auditors couldn't even figure out the agency's software-use history because the IRS couldn't produce the licensing records.
All told, of 27 different pieces of commercial software reviewed by the Treasury Inspector General for Tax Administration, the IRS was only able to provide proper licenses for three of them.
"Until the IRS implements an effective program to manage software licenses, the IRS is incurring increased risks in managing software licenses. These risks include: 1) not complying with licensing agreements that could result in embarrassment, legal problems, and financial liability; 2) not using licenses in the most cost-effective manner; and 3) not effectively using licensing data to reduce software purchase and software maintenance costs," the auditors said in their report.
At the least, the auditor said, the IRS is breaking federal rules by not handling its software licenses better.
Software is protected by copyright laws, and most applications require a license. In some cases a site-wide license can be purchased for everyone, while in other cases each user has to be licensed. The auditors did not say what software programs the IRS was failing to buy enough licenses for.
The agency spent $235 million on software in 2011.
In its official response to the audit report the IRS agreed with the criticisms and accepted all six recommendations for how to get a handle on software use.
Terrence V. Milholland, the IRS's chief technology officer, said officials already taken some steps to centralize software licenses management.
"We believe a standard enterprise approach will lead to more success and savings in the future," Mr. Milholland said.
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