WASHINGTON - Security is the top management challenge facing the Internal Revenue Service (IRS) in Fiscal Year (FY) 2011, according to the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA is required by the Reports Consolidation Act of 2000 to provide its perspective on the most serious management and performance challenges confronting the IRS for inclusion in the Department of the Treasury's annual accountability report. The Treasury report can be found on the Department's website (www.treas.gov).

In its annual memorandum outlining the management and performance challenges the IRS must address for FY 2011, TIGTA also listed the following challenges in order of priority: modernization; tax compliance initiatives; implementing health care and other tax law changes; providing quality taxpayer service operations; human capital; erroneous and improper payments and credits; globalization, taxpayer protection and rights; and leveraging data to improve program effectiveness and reduce costs.

"Due to recent events at IRS facilities and the potentially expanding role of the IRS, security has replaced modernization as the top challenge facing the IRS," says J. Russell George, the Treasury Inspector General for Tax Administration, in the memorandum's introduction. "Animosity towards the tax collection process is nothing new, but the Austin incident and other recent events point to a surge of hostility towards the Federal Government. The ongoing public debate regarding the recently enacted health care legislation may also lead to increased threats against IRS employees and facilities, underscoring the need for continuing vigilance in the area of physical security."

Another change to the FY 2011 memorandum was the expansion of the Implementing Tax Law Challenge to include the tax-related health care provisions of the Patient Protection and Affordable Care Act. The IRS estimates that at least 42 provisions will either add to or amend the tax code and at least eight will require the IRS to build new processes that do not exist within the current system of tax administration.