DRAFT - Performance Work Statement.pdf

The Office of Research, Applied Analytics and Statistics Data Analytics and Innovation Support 2.0

DRAFT PWS

SECTION C – PERFORMANCE WORK STATEMENT

A. Purpose

The IRS requires commercial consulting services to strategically improve tax compliance and internal operations using research, data-driven analysis, model development and project/business management to inform decision making mentioned in the sections below. Contractor support will discern methods with the IRS improving current frameworks, models and techniques; however, in some cases, no change may be needed.

B. Background

IRS Background

The IRS mission is to provide America’s taxpayer top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

To achieve the Mission, the IRS has key future strategic goals pertaining to this requirement:

• Empower and enable all taxpayers to meet their tax obligations.

• Protect the integrity of the tax system by encouraging compliance through administering and enforcing the tax code.

• Collaborate with external partners proactively to improve tax administration.

• Advance data access, usability, and analytics to inform decision making and improve operational outcomes.

• Drive increased agility, efficiency, effectiveness, and security in IRS operations.

As major tax legislation is passed, the IRS must quickly mobilize to determine impacts to the IRS mission and goals, including impacts to IRS business operations, Information Technology, financial reporting and external stakeholders (including taxpayers). In addition to changes brought about by new legislation, the IRS is continually seeking opportunities to improve taxpayer service, enforcement, and operations in an environment of limited resources and rapid changes in technology. The IRS is continuing to make significant strategic advances in the overall tax compliance landscape. Since taxpayer behaviors are endlessly changing, the IRS must proactively adapt to identify emerging taxpayer non-compliance trends.

As trends become more recognizable, the IRS must design new compliance processes, implement strategies to capture lost revenue and facilitate taxpayer voluntary compliance. Furthermore, as thieves adjust to changes in the tax environment, refund fraud through identity theft of individuals and businesses continues to evolve. To combat these trends, the IRS may benefit from increased use of complex analytical frameworks and models.

RAAS Background

The Office of Research, Applied Analytics and Statistics (RAAS) leads a data driven culture through innovative and strategic research, analytics, statistics, and technology services to support effective and efficient tax administration in partnership with internal and external stakeholders. RAAS focuses on solving IRS complex business issues, seeks to transform and continuously improve processes, and conducts cutting-edge research to improve tax administration and IRS operations. RAAS supports an environment fostering employee development and intellectual curiosity, actively seeking opportunities to transfer skills and knowledge to partners. RAAS delivers an unwavering commitment to precision and quality in the IRS.

The RAAS organization is unique in the IRS; by using data and information to better understand activities throughout the agency, RAAS gains cross-cutting strategic insights that may be difficult for others to see.

As a valued member of the IRS’s strategic planning processes, RAAS is routinely engaged in activities to promote government efficiency and effectiveness, drive innovation, ensure economic opportunity, and improve services to taxpayers facilitating their tax law compliance. As a trusted partner, the organization provides analytical skills to ensure their IRS business partners’ strategies are effective in tackling the most pressing problems. Contractor support will assist with identifying innovative, effective ways to problem solve complex programs and legislative requests within the government’s climate of budget constraints and shrinking staff.

C. Scope

The scope of the PWS includes creative application of data and analytic techniques to improve any of the

IRS’s operations. This includes progressive uses of data and advanced analytic techniques to promote efficiency and effectiveness, drive innovation, and improve IRS tax governance, compliance, procedures, and operations. The IRS seeks to improve business processes by enhancing data models and analysis by identifying and addressing potential knowledge gaps and facilitate business decisions. This includes guiding the development of IT solutions informed by improved business processes. (i.e., mapping, benchmarking, and analyzing business processes, evaluating performance of redesigned business processes and IT systems, etc.). Contractor support will enhance opportunities to improve tax administration in areas including, but not limited to:

• Modernize and improve tax administration.

• Improve the collection and audit of public revenues with the aim of decreasing tax evasion.

• Address criminal and fraudulent threats using predictive analytics, trend analysis, assessment and other appropriate contemporary analytical techniques.

• Provide high-quality service to taxpayers by addressing common taxpayer questions, concerns, and potential issues; develop appropriate response strategies to improve compliance and reduce burden.

IRS requires contractor support services to employ and utilize technical data analytics methodologies, and processes supporting the understanding, problem solving, issue identification, and decision making for IRS business partners.

RAAS envisions a combination of services including examining past activities, assessing current functional needs, and making assessments and recommendations based on scientific research and analysis to support future business performance metrics. Contractor services will include well-conceived executive dashboards, user-friendly dynamic workflows, and forward-looking predictive analytics.

Contractor support will help the IRS understand and address problems, overcome challenges, and recommend integrated solutions by the following set of activities, as needed:

• Create an understanding of business challenges.

• Leverage analytic skills and models to describe these objectives.

• Hypothesize potential solutions based on an appropriate mix of insights from relevant disciplines and subject matter expertise.

• Test the hypotheses.

• Evaluate hypotheses, using appropriate statistical methods and models from the relevant subject domains, and deploy solutions as appropriate.

• Develop strategic approaches assisting the IRS in identifying and addressing emerging challenges.

The Contractor shall develop and test hypotheses defining short and long-term security, user-experience, capability, tax compliance and service support strategies by working closely with IRS thought leaders and key executives to enhance key processes. Contractor will also provide rapid responses to emerging issues in all areas of the IRS, including, but not limited to, Taxpayer Behaviors, Identity Theft, Refund Fraud and Revenue Protection, Filing and Payment Compliance, Reporting Compliance, operational use of artificial intelligence techniques, system security and data privacy enhancement, data strategy and governance, emerging and advanced data analytics, and Taxpayer Services.

The IRS will use metrics and benchmarks from this work as an important point of reference in achieving program goals, implementing methods and efficiencies, and establishing processes for continued improvement. Contractor support will align within RAAS to ensure new or modified business capabilities and processes are defined and delivered based on the legislative requirement or initiative.

The contractor shall identify potential challenges that have not been observed.

The contractor shall provide experience-based insights of opportunities that the IRS may be missing.

The contractor shall provide innovative analytic approaches that the IRS should consider pursuing.

D. Requirements

RAAS has defined the following business Program Areas under this BPA. Each business Program Area includes multiple current initiatives and may incorporate additional initiatives in the future. The Program Areas may contain multiple tasks and the criteria for each will vary based on efforts (i.e., deliverables, procedures, resources, schedules, and other variables).

The Contractor shall be required to ensure that all Deliverables, Documents, and Services comply with the PMO program and project requirements, IRS CMMI standards, Section 508 standards, existing IRS standards and guidelines, and integrate with IRS security requirements. The standards for documentation quality are completeness, feasibility, understandability, accuracy, practicality, and format and will be defined within this PWS.

Program Areas and Desired Outcomes

The identified Program Areas are listed and described below but are not in priority order and not limited to this list. This section explains the overarching known categories of Program Areas and desired outcomes.

a) Authentication, Identity Theft and Fraud Protection

b) Taxpayer Experience, Behavioral Insights, and Compliance Analytics and Modeling

c) Examination Selection and Process Analytics Support

d) Unanticipated or Emerging Issues

e) Data Management, Data Systems Security and Privacy, & Data Strategy and Governance

f) Supervised and Unsupervised Techniques to Enhance Processes

a) Authentication, Identity Theft and Fraud Protection.

The IRS considers Identity Theft and Authentication fraud serious crimes. The IRS is working to eliminate both the impact and incidence of Identity Theft, especially where fraudulently prepared tax returns are used to steal refunds. The IRS is partnering with public and private sector organizations to develop applications, protocols, and control measures to better secure the personal data entrusted to the IRS.

RAAS collaborates with other internal operations to combat identity theft by identifying suspicious return filings, raising emerging issues, identifying protections, developing remediation tactics, creating “early warning systems,” identifying matching opportunities, developing long term strategies, and preventing refund fraud.

RAAS analyzes internal and external data to ensure information required to be protected for tax administration is secure and conducts analysis to verify security.

RAAS analyzes historical data to enhance existing identity theft detection.

RAAS will develop approaches to protect taxpayers’ information by:

1) identifying, developing and testing improved authentication tools and techniques given

National Institute for Standards and Technology (NIST) requirements,

2) addressing the increasingly short amount of time private information remains private, and

3) providing resistance to inquiries by the government which appear intrusive (legal, procedural and policy limitations) on information sharing between government agencies, and the technological architecture of the IRS.

Desired outcome: RAAS will identify, develop, test and deliver new and improved identity theft prevention and authentication implementation approaches.

b) Taxpayer Experience, Behavioral Insights, and Compliance Analytics and Modeling.

RAAS helps business partners scan the literature, academic research, and other publicly available information for advanced techniques to solve issues as they may arise to provide taxpayers top quality post-filing services by helping them understand and comply with all applicable tax laws and by applying the tax laws with integrity and fairness. This includes assisting in improving criminal investigation and field collection programs to ensure timely, accurate case actions on all collection activities.

RAAS provides innovative evidence-based solutions specifically designed to address tax collection within the IRS.

RAAS assists Collection functions in re-engineering notices using behavioral insights to improve payment rates and to encourage taxpayers to use self-service interactions rather than phone or correspondence.

RAAS helps in designing notices, forms, and documents, assuring adequate sample sizes for tests, supporting the sending of prototype notices, forms, and documents, and measuring and reporting the response.

RAAS assists Collection function in evaluating undelivered mail to provide data driven results in reducing undelivered responses and improving on address research as a key part of modeling efforts.

RAAS applies network analytics for identification of trends and patterns related to tax compliance and taxpayer service issues.

RAAS provides expertise in identifying and developing new approaches to artificial intelligence in the graph space and collaborate with IRS tax administration subject matter experts to identify new opportunities and use cases for graph databases.

RAAS continues to identify and deliver technical solutions more rapidly and where required in real or near real-time to enable pre-emptive treatment of emerging fraud. Creation of secure, web-based user interface(s) to allow IRS analysts and frontline staff to analyze and take informed action from the data.

Desired outcome: The IRS will be better positioned to address increasingly complex tax administration and compliance issues using the most current analytical techniques and an ability to leverage open-source technology for all aspects of the above. RAAS provides evidence-driven analysis for the purposes of selecting taxpayers for any compliance activity based on the expected collection results, improving collectability of delinquent accounts, and optimizing return selection to meet a complex set of legislative and operational requirements.

c) Examination Selection and Process Analytics Support.

RAAS is involved in providing evidence-driven analysis for the purposes of examination planning as well as more effectively leveraging information returns in the compliance process. There are multiple opportunities for improvement, including identifying the need for and finding ways to use new information returns, engaging taxpayers sooner, using new models to better identify taxpayers and issues to select, etc. While the IRS faces these challenges throughout the organization, they are most observable in the Collection and Examination functions.

Desired outcome: To resolve tax account issues such as tax delinquency, taxpayer account adjustments and providing information on IRS procedures.

d) Unanticipated or Emerging Issues.

Through the assessment of emerging trends in business and technology, the IRS will identify operational challenges where difficulties may arise. This functional area will help the IRS identify immediate and critical needs for processes transforming policy and legislative inputs into outputs and outcomes for tax administration. It requires an understanding of the overall risk environment for tax administration and an understanding of the components in the overall process.

This functional area will provide analytics supporting RAAS development, testing, and deployment of decision services supporting critical business processes, and emerging risk management strategies and challenges for tax administration.

RAAS focuses on solving IRS complex business issues by examining the environment for emerging tax compliance issues. As trends become more recognizable, the IRS must design new compliance processes, implement strategies to capture lost revenue and facilitate taxpayer voluntary compliance.

Desired outcome: The IRS will understand, identify and when possible, prevent emerging tax administration issues before those become advanced, understand emerging issues quickly to explore future innovation, emerging technologies, business processes and best practices to identify solutions and areas for immediate impact while reducing Taxpayer burden, and will be able to implement new governance structures, policies, procedures and training to serve as the framework for tax administration and compliance and address them before the performance is impacted.

e) Data Management, Data Systems Security and Privacy, & Data Strategy and Governance.

RAAS supports data management for the IRS to assist with planning, creating, and/or implementing enforcement strategies/plans for creating and maintaining data stored for analytical purposes primarily through the Compliance Data Warehouse (CDW), a research environment containing administrative records on tax returns, customer accounts, information returns, customer service, compliance management, and other data. In its role as a traditional data warehouse, CDW captures and standardizes data from multiple IRS data sources, letting users spend more time on analytics and less time searching for and integrating data. CDW is an enterprise data ecosystem for research and analytics that enables knowledge discovery and actionable decisions from the vast amount of new and diverse datasets. RAAS leverages network analytics, such as graph database, to facilitate fast, efficient queries and visualization of complex relationships between people, places, and things. DMD also oversees a complex imaging environment which scans and processes a variety of documents for customers throughout IRS.

Desired outcome: RAAS ensures the analytical data are well maintained to facilitate the understanding and development of compliance solutions and taxpayer service improvements, therefore, RAAS anticipates the continued need for predictive analytics, network analytics, the operational use of artificial intelligence analytics, imaging system improvements, system security and data privacy enhancement, data strategy and governance, and emerging and advanced data analytics to support its data management efforts.

f) Supervised and Unsupervised Techniques to Enhance Processes

Commercial supervised and unsupervised process enhancements (like, Amazon, Expedia, Netflix, etc.) use powerful algorithms to drive product recommendations, suggest movies to watch and suggest travel arrangements. These systems are also successfully implemented in insurance companies to highlight non-compliance in claims and invoices. There is broad interest in the IRS to streamline existing work by identifying the right issues to examine/classify, automate issue identification and data entry, and incorporate feedback to enhance accuracy over time.

Supervised and unsupervised algorithms have various applications across the IRS, including within CI, LB&I, and SB/SE. Recommendation systems are well-suited to problems such as case selection, issue identification, and issue sensing. Furthermore, they don’t require historical data to identify noncompliance in the current population. As the impact of the Tax Cuts and Jobs Act becomes more pronounced, recommendation systems can augment current models informed by historical data, which will become less reliable in a changing legal landscape.

Desired outcome: The IRS will understand emerging issues quickly to explore future innovation, emerging technologies, business processes and best practices to identify solutions and areas for immediate impact while reducing Taxpayer burden and will be able to implement new governance structures, policies, procedures and training to serve as the framework for tax administration and compliance and address them before the performance is impacted.

Current Initiatives and Tasks

This section describes examples of known initiatives, expected goals, and task descriptions.

The following table identifies how Program Areas relate to current initiatives. Additional Program Areas and initiatives may be added to the Program Areas in the future.

Program Area Examples of RAAS Initiatives

a) Authentication, Identity Theft and Fraud Protection • Identity Theft Models & Filters (IDTM)

• Return Integrity & Compliance Service (RICS) Taxpayer Protection Program (TPP)

• Identity Protection and Assurance (IPA)

b) Taxpayer Experience, Behavioral Insights, and Compliance Analytics and Modeling

• Tax Exempt and Government Entities (TEGE) Initiative: Detection of Non-Compliance-TEGE Employee plans (EP), Exempt Organizations (EO), and Tax-Exempt Bonds (TEB)

• Enterprise Planning Scenario Tools (EPST)

• Application of Behavioral Insights for

Correspondence and other Customer Experience

Strategies

• Compliance Research and Decisions (ERIS) /

Administration of Compliance Research and Related

Information

• SBSE Collections Undelivered Mail

• LB&I Issue Detection and Campaign

c) Examination Selection and Process Analytics Support • SBSE Non-Filer 2.0 (Non-Filer Strategy Development)

d) Unanticipated or Emerging Issues • Emerging Issues

• Emerging Compliance Issues

e) Data Management, Data Systems Security and Privacy, & Data Strategy and Governance

• Data Management

• LB&I Text Extraction & Analytics Research & Support

• Data Management CARES ACT (COVID-19) Support

• Graph Database

f) Supervised and Unsupervised Techniques to Enhance Processes

• Automation with Analytics

• Development of Issue Recommender Systems

The specific tasks will vary based on the scope, complexity and needs of each program and initiative. Some will be decided as the need arises.

Specific tasking will be identified for each program and will specify the operational organization, the effort and products to be provided as well as skill mix (see section E – Knowledge, Skills and Capabilities Required).

The contractor shall manage, track and invoice the work by Task Order (see section J - Performance Requirements, Standards and Surveillance).

A payment schedule will be agreed on per Task Order.

An IRS Initiative Manager (manages projects), Initiative Director (manages portfolios) and Contracting Officer Representative (COR) will be identified for each Task Order.

All services must be provided and performed under the supervision/management of the contractor’s manager and in collaboration with the IRS Initiative Manager and Director.

Future support shall include recommendations addressing the critical issues for management actions in the short and long terms.

RAAS Initiative Categories (Listed by Program Area)

a) Authentication, Identity Theft and Fraud Protection -

1) Identity Theft Models & Filters (IDTM)

Project Description: Recognizing successful identity thieves require taxpayer personal information, an authentication element for filing (e.g., prior year AGI), a method to file false returns at scale, and a mechanism for collecting the refund money, RAAS conducts critical research both in partnership with key business units to reflect ongoing challenges of defending against current and near term-term threats as well as new research to identify opportunities to prevent future attempts. Identity thieves evolve their methods and schemes over time creating an ongoing challenge to the IRS. The RAAS Identity Theft Research Portfolio is currently organized into 3 major areas of research.

1) Identity Theft Detection protects revenue by developing, testing, and monitoring models and filters deployed annually in IRS production systems. As fraudulent actors increase in sophistication, IDT Detection efforts must evolve to provide systemic solutions for identifying complex fraudulent patterns.

2) Identity Theft Innovation develops, tests, and pilots new tools and analytic techniques to detect identity theft missed by models and filters. These tools and techniques are unavailable in IRS production systems. IDT Innovation is conducting three selection pilots.

Through Joint Strike Force (JSF), IDT Innovation analyzes daily return submissions, identifies emerging threats, and recommends treatment options to key stakeholders.

3) Identity Theft Strategic Analyses provides IRS with a baseline estimate of IDT prevention, enhance and produce the neutral datasets, addresses knowledge gaps to reduce false detection, and provides strategic data and insights through the Service’s partnerships with States and industry.

Goal(s): RAAS will identify, develop, test and deliver new and improved identity theft prevention and authentication implementation approaches.

2) Identity Protection and Assurance (IPA)

Project Description: IPA supports compliance related priorities, activities, and methods to provide the IRS with a secure tax environment that protects sensitive taxpayer data and properly verifies the identity of taxpayers in all channels. The growth of the Internet has changed consumer expectations as they become increasingly more accustomed to and prefer using the web. To accomplish this, the IRS must create secure identity verification channels that ensure the correct entity, whether individual, business, power of attorney or other authorized actor allowed to access the account and comply with National Institute of Standards and Technology (NIST) guidelines.

Goal(s): The goals of the IPA workstreams are to:

• Identify and implement proven frameworks to holistically guide identity verification identity management efforts and address associated risks.

• Produce in-depth analysis of identity verification in IRS efforts to view how the public is interacting with the IRS, the results of which directly impact decision-making.

• Develop and enhance defenses and create innovative approaches and strategies to get ahead of potential system abuse.

• Identify opportunities to improve the authentication experience.

• Improve taxpayer interaction with IRS and increase efficiencies by implementing adaptive forms.

3) Development of Recommender Systems

Project Description: Issue Recommender is building models to identify issues on SB/SE audit returns and assign which employee type will perform the audit (classification) as well as identifying which returns to audit (workload selection).

Goal(s): Drive increased agility, efficiency, effectiveness and security in IRS operations.

b) Taxpayer Experience, Behavioral Insights, and Compliance Analytics and Modeling -

4) Tax Exempt and Government Entities (TEGE) Initiative: Detection of Non-Compliance-TEGE Employee plans (EP), Exempt Organizations (EO), and Tax-Exempt Bonds (TEB)

Project description: RAAS is responding to the TE/GE Commissioner's request for analytic support to explore ways to enhance anomaly detection in return data and improve exam case selections.

This project will improve TE/GE’s ability to leverage data to identify EO and EP non-compliance via improved efficiencies when selecting examination cases, the identification of currently undetected EO and EP non-compliance and increased exam change rates for TE/GE priority issues.

Goal(s): The goal of this project is to leverage existing and new sources of data, innovative analytic and statistical approaches, and subject matter expertise to develop data-driven issue identification and case selection methods for EO and EP. The effort will also conduct field tests of these approaches to adjust methodologies and inform decisions about operationalizing case identification and selection models.

5) Enterprise Planning Scenario Tools (EPST)

Project Description: IRS Examination previously developed work plans using a complicated system of spreadsheets, making it difficult to compare options and see tradeoffs. RAAS has developed EPST modules to help solve this issue. The tools help users develop a planning process and improve business outcomes, through automation and incorporation of predictive metrics and models. The tools also help address TIGTA and GAO recommendations regarding improvements in the allocation of resources and operational processes by implementing analytic capabilities and data-driven approaches to generate, evaluate, and monitor executable plans. The tools have reduced time to evaluate different planning scenarios and develop exam and collection plans which optimize the use of resources, document plan assumptions, and improve business outcomes.

Goal(s): To optimize the allocation of resources within and across Examination and Collection functions, improve business outcomes, and support the IRS vision as necessary. To build tools RAAS employees can maintain in house, when fully developed.

6) Application of Behavioral Insights for Correspondence and other Customer Experience

Strategies

Project Description: This initiative synthesizes best practices and lessons learned from prior notice collection studies to inform the design and execution of other correspondence and customer experience initiatives and strategies. This initiative will expand a performance monitoring initiative to include additional redesigned notices deployed into production, enabling RAAS to provide notice stakeholders with regular updates on business outcomes. RAAS will also work with ACS stakeholders to plan the next iteration of case selection models to enable stakeholders to evaluate expected business outcomes and determine the optimal volume and timing of issuing the redesigned notices and extend the application of behavioral insights to enhance the customer experience by redesigning Customer (CVP) queue announcements to nudge taxpayers towards self-service channels.

Goal(s): Expected outcomes include ability to track robust notices performance metrics (including response types and response channels) to identify most impactful changes being made to notices, forms, and publications and to encourage or drive taxpayers to utilize online self-service tools and reduce or eliminate wait times. Provide support in assessing the performance of programs against their intended goals through the development and maintenance of program evaluation and measurement criteria and methods.

7) Compliance Research and Decisions (ERIS) / Administration of Compliance Research and

Related Information

Project Description: Develop and implement an administration of Compliance Research related approach for various needs. Networking of data provides enhanced options for detection and treatment of preparer non-compliance.

RAAS and the Office of Promoter Investigations are collaborating to bolster the Service’s capabilities to identify and deter promoters and those enabling tax avoidance schemes by proactively identifying emerging promoter schemes. Current or prior projects have addressed syndicated conservation easements 179D deduction, abusive Individual Retirement Account tax structures, monetized installment sales and transfer pricing. With the Bank Secrecy Act (BSA) Initiatives, RAAS partners with SBSE Exam: BSA-Case Selection to analyze data managed by the Financial Crimes Enforcement Network (FinCEN) including Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) for the purpose of enhancing lead selection. RAAS leverages a variety of research methodologies including graph techniques to categorize related entities and Natural Language Processing of SAR narratives in support several BSA Workstreams including Form 8300 Non-Filer, Report of Foreign Bank and Financial Accounts (FBAR), Small Money Service Businesses (MSBs) and Modernization of Title 31 Wire Transmitter Headquarters Examinations.

Another example, the Employer Identification Number (EIN), there is an expanded pilot phase for RAAS support and partnership with SB/SE Fraud. In the past, the focus was using linked data to assist Fraud Technical Advisors in researching existing fraud referrals received from the field and identifying new fraud activities by applying pattern analysis of the linked data.

Goal(s): Review data to identify networks of preparers engaged in patterns, trends and risky behavior related to specific programs. Define the problem and advise a solution for risk mitigation.

A review of measures to assess operational benefits of enhanced data provided by linking, visualization, and pattern detection. This process should assess issues both internal and external to the agency. Internal assessment leads to an understanding of the agency’s strengths and weakness. The external assessment leads to an understanding of the opportunities and threats facing the agency.

8) SBSE Collections Undelivered Mail (Reference: IRM 5.19.16.3)

Project Description: The contractor shall support RAAS, IRS, and SBSE Collection in addressing Undelivered mail efforts for better understanding the reasons for undelivered mail and developing processes to reduce the extent of undelivered mail in Collection notice issuance and research.

Goal(s): Expected outcomes include ability to track undelivered mail impact to collection and identify changes to research, automate, and reduce undelivered mail intake and research.

9) LB&I Issue Detection and Campaign

Project Description: As the result of a TIGTA and GAO audit findings, a need for an improved process for allocating resources during the planning process was identified. Declining resources have led LB&I to develop different strategies to identify areas of non-compliance and to improve workload selection for returns reporting the non-compliant issues. For example, with fewer resources in the field, LB&I is designing different methodologies to bring taxpayers into compliance (i.e., soft letters, auditing campaign issues) rather than through the regular field audit taking several months or years to complete. The goal is to accurately select returns so the auditor can focus on the specific non-compliant issues order to reduce time spent on each exam. These new strategies should also reduce the no-change rate in LB&I. LB&I Issue Detection and Campaign Strategy Support: 1) Current state technology review and assessment of needs for the campaign approach, 2) Develop a compliance problem framing and sizing for immediate opportunities, and

3) Research, identify and leverage anomaly detection methods from academia and industry.

Goal(s): Identify areas of noncompliance undetected in existing rules, filters and other methods as necessary. Support campaign development to address identified issues.

c) Examination Selection and Process Analytics Support -

10) SBSE Non-Filer 2.0 (Non-Filer Strategy Development)

Project Description: The non-filer strategy is focused on assessing the current non-filer landscape and identifying innovative, high-impact opportunities to address non-filer challenges. RAAS is defining, designing, developing, and deploying research opportunities informing current and http://irm.web.irs.gov/link.aspx?link=5.19.16.3 future non-filer strategies. Opportunities under exploration include adjusting business rules and thresholds, leveraging third party data, and introducing new behavioral nudges.

Goal(s): RAAS and SB/SE Research have identified four strategy components framing existing research and guide the identification of future state opportunities:

• Enhance existing non-filer processes to streamline treatment, increase efficiency, and increase taxpayer responsiveness and resolution.

• Review and test existing analytics and develop new filters and models to identify and prioritize case selection.

• Assess case characteristics to improve current methods of allocating non-filer cases across potential treatment streams.

• Assess the overall resource requirements for discretionary campus work and determine the optimal allocation of resources across treatment streams to maximize revenue.

d) Unanticipated or Emerging Issues -

11) Emerging Issues

Description: Unanticipated or emerging trends as they relate to the scope of this BPA may arise at any time during the life of this effort. The Government desires to have a solution that can address and identify operational challenges where difficulties may arise. This will help the IRS identify immediate and critical needs for processes transforming policy and legislative inputs into outputs and outcomes for tax administration. As projects or initiatives may arise, it is critical to evaluate the risk environment for tax administration and understand components in the overall process. It could include, but not limited to, project management, business management, analytics, research, and data modeling supporting RAAS development of decision services supporting critical business processes, and emerging risk management strategies and challenges for tax administration.

Goal(s): The IRS will quickly review, assess, and address issues as it arises to explore future innovation, emerging technologies, business processes and best practices to identify solutions and areas for immediate impact while reducing Taxpayer burden. Assist the IRS to potentially implement new governance structures, policies, procedures, and training to serve as the framework for tax administration and compliance and address them before the performance is impacted. Provide support in assessing the performance of programs against their intended goals through the development and maintenance of program evaluation and measurement criteria and methods. This process should assess issues both internal and external to the agency. Internal assessment leads to an understanding of the agency’s strengths and weakness. The external assessment leads to an understanding of the opportunities and threats facing the agency.

12) Emerging Compliance Issues

Project Description: Apply network analytics for identification of trends and patterns related to tax compliance and taxpayer service issues. Provide expertise in identifying and developing new approaches to artificial intelligence in the graph space. Collaborate with IRS tax administration subject matter experts to identify new opportunities and use cases for graph databases. Identify and deliver technical solutions more rapidly and where required in real or near real-time to enable pre-emptive treatment of emerging fraud. Creation of secure, web-based user interface(s) to allow IRS analysts and frontline staff to analyze and take informed action from the data.

Goal(s): Ability to leverage open-source technology for all aspects of the above.

e) Data Management, Data Systems Security and Privacy, & Data Strategy and Governance -

13) Data Management

Project Description: RAAS provides ongoing data management support including, but not limited to the following activities: manage data imports; design, test and implement data imports;

conduct tests of historical data for compliance with database requirements.

Goal(s): Ensure data accuracy and effectiveness within CDW databases to better enable decision-making on an ongoing basis (monthly, quarterly, and annual basis).

14) LB&I Text Extraction & Analytics Research & Support conduct tests of historical data for compliance with database requirements.

15) Data Management CARES ACT (COVID19) Support conduct tests of historical data for compliance with database requirements.

Goal(s): Ensure data accuracy and effectiveness within CDW databases to better enable decision-

16) Graph Database conduct tests of historical data for compliance with database requirements.

f) Supervised and Unsupervised Techniques to Enhance Processes -

17) Automation with Analytics

Intelligent automation providing methods to extract, interpret, and classify information in documents, and possibly enhance the classification process through automation.

Goal(s): Drive increased agility, efficiency, effectiveness and security in IRS operations, data accuracy, and effectiveness.

18) Development of Issue Recommender Systems

Project Description: Recommender systems are ubiquitous in the private sector, but not used in the IRS now. Commercial recommendation systems (like, Amazon, Expedia, Netflix, etc.) use powerful algorithms to drive product recommendations, suggest movies to watch and suggest travel arrangements. Recommender systems are also successfully implemented in insurance companies to highlight non-compliance in claims and invoices. There is broad interest in the IRS in recommender systems to potentially streamline existing work by identifying the right Issues to Examine/Classify, automate issue identification and data entry, and incorporate feedback to enhance accuracy over time. This project supports the development of recommender systems within the IRS by testing recommender models with IRS data, developing potential business use cases, and adapting these models to work on large scale in the IRS environment.

Goal(s): Recommendation systems algorithms have various applications across the IRS, including within CI, LB&I, and SB/SE. Recommendation systems are well-suited to problems such as case selection, issue identification, and issue sensing. Furthermore, they don’t require historical data to identify noncompliance in the current population. As the impact of the Tax Cuts and Jobs Act becomes more pronounced, recommendation systems can augment current models informed by historical data, which will become less reliable in a changing legal landscape.

E. Knowledge, Skills and Capabilities Required

Capabilities

The Contractor shall have the capability to perform all the types of activities and tasks outlined in the following section.

a) Enact Administration and Enforcement Support

The Contractor shall have the capability to assist in identifying opportunities for new approaches to tackling IRS and RAAS challenges, often by drawing on deep industry and/or law enforcement experience (including techniques from other industry sectors or law enforcement domains). The Contractor shall have the capability to support the IRS enterprise research, planning efforts in the development of processes and procedures for integrating and conducting research across the IRS. This work may include framework conceptualization and application of governance mandates. These challenges may be operational or organizational.

The IRS has a long history of adapting to continually changing and newly emerging taxpayer behaviors. As trends become more apparent and recognizable, the IRS designs new compliance processes and implements strategies to capture lost revenue and increase taxpayer compliance. RAAS actively partners within the IRS and beyond to develop, accelerate, and strengthen strategic evidence-driven compliance initiatives and analytic problem-solving capabilities, to include the following:

o Leveraging (accelerating and/or extending) progress with high-value existing compliance initiatives;

o Modeling and contributing to a more evidence-driven and analytical culture within core compliance management activities; and o Building a service-wide capacity to continually analyze and apply data analytics to evolve compliance programs.

Tasks may include, but not be limited to:

o Interpreting Legislation and Policy o Identifying Efficiency Opportunities o Developing and Framing Issues o Creating Implementation Plans o Assisting in Development of Internal IRS Agency Programs and Solutions o Assisting in Development of Strategy

b) Conduct Data Exploration and Evaluation Operations.

The Contractor shall have the capability to provide RAAS and the IRS with Data Analytic support to mine data and configure large, complex data sets using sophisticated software and appropriate methods to identify undiscovered patterns and establish hidden relationships. These data analytics focus on application of appropriate evidence-driven methods, data-driven or knowledge-driven as appropriate.

The Contractor shall have the capability to apply advanced knowledge of statistical and mathematical theories and techniques relating to survey sampling, weighting, outlier and missing data adjustments, data analysis, projections, and variance estimation.

The Contractor shall have the capability to design research projects applying valid scientific techniques and utilize information obtained from baselines or historical data to structure uncompromised and efficient analyses. This work requires exploration and hypothesis development to gain insight/knowledge from the data. Applying research approaches to statistical data will be useful for determining attribution, identifying relationships between objects, tracking back differences in similar results, guaranteeing the reliability of the data; and allowing researchers to determine whether a data set can be used in their research.

The Contractor shall have strong troubleshooting and problem-solving capabilities and hands-on knowledge of Applied Predictive Technologies, Excel, SAS, R, SQL, Python and other reporting and associated tools.

The contractor shall have strong troubleshooting and problem-solving capabilities as well as hands-on expertise and knowledge of Applied Predictive Technologies, Excel, SAS, R, SQL, Python and other reporting and associated tools.

Tasks may include, but not be limited to:

o Data Analytics and Statistical Functions o Modeling and Simulation o Data Management o Evidence-Based Testing and Evaluation o Verification and Validation

c) Transition to Support

Once BPA is awarded, the Contractor shall conduct an orientation briefing for the Government. The goal is to provide a near-seamless transition between contractors and/or government staff with minimal impact to RAAS’s ongoing initiatives at the beginning of this BPA. The intent of the briefing is to initiate the communication process between the Government and Contractor by introducing key BPA participants, explaining their roles, reviewing communication ground rules, and assuring a common understanding of BPA requirements. The new Contractor shall develop and deliver a draft detailed start-up plan that encourages productivity. This plan shall identify the Contractor resources and roles involved in the start-up process, provide a list of risks and mitigation strategies, and contain a detailed, resource balanced project schedule.

The orientation briefing shall be held at the Government's facility and both parties shall mutually agree upon the date and time.

Topics to be discussed may include, but not be limited to:

o Knowledge transfer from existing contractor o Required Security Awareness and IT Training o Orienting Staff to Workspaces, Equipment, and Facilities o Task Order Project Management and Invoicing o Status Reports and Status Meetings o Data Protection Protocols

Knowledge and Skills

The Contractor shall ensure its leadership is fully engaged and available to IRS leadership. These leaders should possess a broad scope of influence within their organization and bring their breadth and depth of experience to each Task Order. This includes providing ongoing assessment of program status and recommendations for improvement as needed. The Task Orders issued under this BPA will be enterprise-wide and/or highly visible in nature which will require assert responsibility over the enterprise. For this reason, it is imperative contractor leaders remain active throughout each Task Order and fully understand each project’s status, issues and risks; and work with IRS leaders in providing executive-level oversight and direction to their staff.

In the table below, the contractor shall identify individuals considered as Key Personnel in their quoted staffing projection to fulfill Technical and Management Approach. Positions listed below may be used at BPA and/or Task Order Level. However, IRS is asking each Contractor to identify:

1. BPA Level - Key personnel being designated to be utilized across associated Task Orders:

o Point of Contact responsible for direction and coordination with government regarding changes, concerns, and/or updates to their overall BPA management (no cost associated)

2. Task Order Level - Program Manager and other key personnel shall be designated during the individual Task Order quotation (cost shall be included in associated Task Order).

BPA Key Personnel Roles

The contractor shall provide the full names and 1-page resumes, if desired, for the following key personnel roles in their proposal in response to this BPA. The leads involved in the program work should have had previous advisory roles for both private and public sector senior executives.

BPA Program Manager/ Team Lead –

• Oversees all contractor BPA work and is the primary point of contact for the IRS for matters pertaining to this BPA.

Contractor Security Team Lead –

• Ensures contractors are adhering to IRS physical and data security requirements, including completion of mandatory training.

Invoicing Team Lead –

• Submits invoices and other required documentation for payment.

Name Position or Role Contractor’s Schedule Labor

Category

TBD BPA Program Manager/

Team Lead

TBD Contractor Security Team Lead

TBD Invoicing Team Lead

The Contractor shall obtain the Contracting Officer’s (CO) written consent before removing, replacing, or diverting any of the personnel assigned to the positions. The Contractor shall (1) notify the CO and the COR reasonably in advance and (2) submit justification (including proposed substitutions) to the CO and the COR in sufficient detail to permit evaluation of the impact on this BPA. All proposed personnel substitutions shall possess capabilities equal to or exceeding the capabilities of the person to be replaced.

1. Contractor promptly notifies the CO in writing, at least fifteen (15) working days in advance of the proposed substitutions. The Government has 30 days to approve or disapprove key personnel or they are deemed acceptable substitutions. Contractor must provide:

a. detailed explanation of the circumstances necessitating the proposed substitutions,

b. complete resume for the proposed substitute, and

c. any other information requested by the CO needed to approve or disapprove the proposed substitution.

2. The CO will forward request to authorized Program Office representative (usually BPA or Task

Order Level COR) to conduct an evaluation of request. Representative will notify CO approval or disapproval.

Task Order Key Personnel Roles

The IRS will identify specific requirements for Task Order Key Personnel Roles as Task Orders are issued.

The Contractor shall make every effort to retain key personnel under each Task Order to ensure continuity until Task Order completion (acceptable reason for leaving the contract is personnel has left the company or death or other related circumstance).

The Task Order Program Manager shall be responsible for the performance of work performed under…