IRS releases modernization plan

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The Internal Revenue Service has rolled out an ambitious IT modernization plan that seeks to create, tweak or retire at least 20 systems, programs and applications at the agency.

The document provided more detail on a six-year plan that would update core tax administration systems, IRS operations and cybersecurity, a key goal laid out by Commissioner Paul Rettig in his confirmation hearing last year.

In a section at the beginning of the plan signed by Rettig, Deputy Commissioner for Operations Support Jeffrey Triband and Deputy Commissioner for Services and Enforcement Kirsten Wielobob wrote that the ultimate goals of the plan are to improve the taxpayer experience and build greater resilience into IRS technology systems.

"We all know that advances in technology will require adjustments over time and that challenges lie ahead," they wrote. "If and when disaster strikes, the story shouldn't be that a system went offline but rather how quickly we recovered and resumed normal operations."

The plan is based around improving agency operations in four areas: the taxpayer experience, core taxpayer services and enforcement, modernizing IRS operations and implementing better cybersecurity and data protection.

A key goal of the plan is to dramatically simplify the agency's technical environment, laying out changes, improvements and planned replacements for more than 20 systems, applications and programs that would take place in two phases through 2024. One project involves converting more than 200,000 lines of legacy assembly-language code to more modern software, a root cause for many longstanding IRS IT woes. The conversion should make it easier to retire the Individual Master File, the agency's primary tax processing system that relies on programming code dating back to the 1950s.

The Return Review Program, the IRS' main fraud-detection system, has been flagged by agency officials and Congress as a cornerstone of future tax enforcement activities. The system is credited with a dramatic drop in instances of tax return fraud and identity theft since 2015, and the plan calls for improvements to data access and visualization reporting, the creation of new fraud filters and the expansion of the system's functionality to other business units in line with recommendations by the Government Accountability Office.

Another initiative involves identifying and purchasing a new enterprise case management system to digitize case information and automate work processes. IRS officials hope that a new system will not only make tax enforcement initiatives more efficient, but also provide an "incremental and low risk alternative to traditional solutions, which may involve a complete redesign of older systems."

Finally, the agency has been taken to task by congressional appropriators in recent years for lacking a cloud strategy. The modernization plan lays out a raft of cloud-based initiatives, including the development of a request for information to map out an enterprise cloud ecosystem.

The report all but admits the agency has been overwhelmed in recent years by budget cuts, major changes to tax law and the demands associated with filing season to properly focus on the gargantuan task of modernization, though it does cite CADE 2 and the Return Review Program as limited examples of success in this environment.

Still, even that mostly reactive posture is becoming less realistic as the agency's IT infrastructure continues to age.

"The cost of maintaining the current complex technology ecosystem continues to grow every year on an unsustainable trajectory," the report said. "The cost of operating these systems is overtaking other important components of effective tax administration and limiting capacity to deliver quality service."

In order to execute the plan, the IRS said it needs a tranche of new funding from Congress as well as a number of new or restored authorities, such as streamlined critical pay hiring powers.

The agency received general support for the plan from legislators last week when Rettig appeared before the Senate Finance Committee. However, the overall price tag -- between $2.3 and $2.7 billion over six years -- was received skeptically by Chairman Chuck Grassley (R-Iowa), who complained that Congress had "appropriated billions of dollars" to modernization efforts over the years with little evidence that it was "spent efficiently and effectively."

About the Author

Derek B. Johnson is a former senior staff writer at FCW.


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