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Accenture Strengthens Tie with IRS

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Globally accredited management and technology consulting company Accenture plc’s (ACN) Federal Services unit will now provide information technology (IT) services to the Internal Revenue Service (IRS) for improving its customer services. Financial terms of the 5-year contract, awarded by the U.S. Department of the Treasury, were kept confidential.

Per the deal, Accenture Federal Services will help to automate work processes within IRS’ Account Management Services (AMS) system. For this, Accenture will analyze the business requirements; design, develop and test the new automation process and provide post-implementation support.

The IRS, a U.S. federal agency, operates under the Department of the Treasury and is responsible for collecting taxes and interpretation and enforcement of the Internal Revenue Code. IRS manages its taxpayers’ accounts (account opening, periodic updates, posting of payments, reconciliation of deposits, account adjustments, and settlements) through the AMS system.

With the automation of the AMS system, it will be easier for the tax agency to provide tax payers immediate access to integrated account data, enable real-time transaction processing and settle accounts.

The IRS has always been prudent in modernizing its business processes and hence has selected Accenture as its IT infrastructure partner for its rich experience. Last year, in February, Accenture signed a 10-year contract with IRS in order to bring three of IRS’ web portals under one umbrella. Accenture will combine the consumer-facing website, IRS.gov (designed by Accenture and one of the most popular website for the tax payers), the registered-user portal for tax preparers and the agency’s employee intranet.

The new IT infrastructure will help IRS streamline its operations, while making the whole system easier for tax payers. Accenture shares a longstanding relationship (more than 20 years) with the IRS. In the past, Accenture served as a trusted partner of the IRS, helping the agency implement a number of new systems, processes and capabilities.

Accenture has been winning federal deals frequently. In an effort to better serve government clients, Accenture formed the U.S. Federal Advisory Board in 2012. The company has also invited experts with years of experience in Fed activities to join the board. This will provide Accenture more insight into the current requirements to deal with critical IT operations.

Therefore, the expertise should strengthen Accenture’s position, helping to secure a larger number of government contracts, thereby boosting its revenue streams.

While Accenture’s prospects look bright, increasing competition from IBM Corp. (IBM), a strained spending environment, and broad European exposure may temper growth to some extent.

Currently, Accenture has a Zacks Rank #4 (Sell) primarily due to downward estimate revisions by analysts. But not all stocks in the sector are performing as badly as Accenture. CRA International Inc. (CRAI) and Information Services Group Inc. (III) , with a Zacks Rank #1 (Strong Buy) are worth buying.

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