IRS modernization still lacks funding

The tax agency is pursuing two modernization plans but lacks funds from Congress to fully implement replacement for 60-year-old systems.

Shutterstock photo ID: photo ID: 245503636 By Mark Van Scyoc Sign outside the Internal Revenue Service building in downtown Washington, DC on December 26, 2014.
 

There are two efforts underway at IRS to modernize expensive and obsolete legacy systems, but so far funds haven't been appropriated for a tech refresh, the tax agency's chief said at an Oct. 7 hearing.

The IRS released a six-year integrated business plan in April 2019 that called for the retirement of legacy systems in fiscal year 2024, and there's a separate effort underway as mandated by the Taxpayer First Act, but so far appropriations have not been forthcoming.

"We have yet to receive the funding requested on an annual basis," IRS Commissioner Charles Rettig said about funding of the integrated business plan. He added, "there is no [appropriation] associated with the Taxpayer First Act."

Currently IRS spends about $3 billion annually on IT, with 80% going to maintaining legacy systems including some with code dating back 60 years. Just 20% is spent on modernization efforts.

The problem of IRS legacy systems is so acute that this August, House Majority Leader Steny Hoyer (D-Md.) proposed a $2 billion addition to the Technology Modernization Fund – a revolving fund administered by the General Services Administration and the federal CIO – to support a major IRS tech refresh.

The IRS has never applied for TMF funding, the agency told FCW, in response to a request for documents under the Freedom of Information Act.

At the hearing, subcommittee chairman Rep. Gerry Connolly (D-Va.) said he planned action to get to the bottom of the legacy problem at IRS.

Right now, it's not even known precisely how many legacy systems are fielded by the tax agency. Vijay D'Souza, GAO's director of information technology and cybersecurity, said the number was likely in the hundreds but that "it depends a little bit on how the agency defines a system."

"This subcommittee is going to formally request [the Government Accountability Office] for a comprehensive inventory of the scope of this problem and challenge," Connolly said.

Part of the issue with modernization at IRS is prioritization.

"So as the budget for these modernization activities has been cut, or as we've had situations like a lapse in appropriations or continuing resolutions, IRS has continually had to re-plan and reprioritize its efforts," D'Souza told lawmakers. "That takes time and it slows things down." Additionally, the changes to the tax code in 2017 have drawn attention away from IT upgrades.

"IRS had to shift its IT resources to implement those changes versus some ongoing activities that had planned do to enhance its systems," D'Souza said.

Lawmakers called out IRS progress on dispersing more than $266 billion in economic impact payments to individuals as authorized under pandemic relief legislation, with many Americans still waiting on funds.

However, the legacy systems under fire continue to perform fairly well despite the volume of tax returns and other transactions. Rettig noted that the tax processing set speed records in 2020, even with most of the agency's facilities shuttered because of COVID-19.

D'Souza explained that a modern system is preferable not because of the ability to process high volumes of transactions, but "in terms of the capabilities it provides… the ability to provide services online, to provide information more quickly to taxpayers."

Additionally, modernized systems would cost less to maintain and would not rely on a shrinking pool of workers versed in the legacy software codes of the 1960s and 1970s and would be easier to defend against cyberattacks.

Currently, IRS has 132 pending cybersecurity recommendations from GAO. Rettig also told lawmakers that the agency deals with 1.6 billion attempts to attack IRS systems annually – more than 2.5 million attacks per day.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.