For a number of years the IRS has been attempting to modernize its operations. The IRS' public relations effort in support of Tax Systems Modernization, or TSM, emphasized that the IRS is struggling to perform in the 90s with computers out of the 60s. General Accounting Office (GAO) reports on TSM have criticized the IRS on its handling of the $4 billion appropriated for TSM over the years. For the current fiscal year, the IRS received a cutback in overall appropriations from $7.3 billion to $7.1 billion (rather than the requested $800 million increase) in part because of Congress' concerns over the billions to date spent on TSM.

In recent Congressional hearings, IRS personnel have acknowledged that TSM efforts "went off track" and actions were being taken to correct matters. The Congressional Committee responsible for IRS appropriations, meanwhile, is losing patience. Chairperson Lightfoot, at a March 13 press conference, implied he was being lied to and stonewalled by the IRS regarding its modernization program.