IRS Legacy Technology Costs the Country ‘Billions,’ IG Says

sorapon udomwettaynan/

The IRS isn’t capitalizing on its cloud strategy as it should be.

In the midst of another tax season, the Treasury Inspector General for Tax Administration says the IRS’ slow pace in transitioning to cloud services as opposed to the legacy technologies now in operation is costing taxpayers.

In an audit released this March, the Treasury IG renewed its concerns with IRS cloud adoption, following a scathing 2017 audit that criticized IRS leadership for being seven years late in developing its cloud strategy.  According to this month’s audit, the IRS finally has a cloud strategy but its lack of execution is costing taxpayers “billions” of dollars and leading to an unsavory taxpayer experience for millions of Americans.

“The IRS’s ability to successfully modernize its information technology foundation is critical to delivering modern taxpayer service and enforcement in a cost-effective way,” the audit states. “Moreover, legacy technology is preventing the IRS from collecting billions of dollars, protecting against fraud, and truly transforming the taxpayer’s experience.”

According to the audit, the IRS solidified its cloud strategy in December 2017 and built its cloud inventory to 26 platform-, infrastructure- and software-as-a-service implementations by December 2019. As part of its enterprisewide cloud strategy, IRS identified 10 key workstreams—or IRS business activities—suitable for cloud computing.

However, the audit states “work has not started on all workstreams, including the high priority cloud services procurement workstream.”

Moreover, the IRS lacks internal guidance or formalized processes regarding cloud services. While the tax-collecting agency created a Cloud Governance Board charter, the body is “not approved.”

The IG recommended the IRS review and update its cloud strategy annually, and address the scope of workstreams. It also called on the IRS to develop a “multiyear plan” to complete the workstreams, and develop guidance and requirements to be considered when acquiring cloud services. The IRS agreed with all the IG’s recommendations.