IRS Modernization Plan Announced

NSTPInternal Revenue Service (IRS)

IRS Announces Modernization Plan
The IRS announced a modernization plan on April 18th that would improve services for taxpayers and “deliver long-term budget and personnel efficiencies.” The plan would be implemented in two three-year phases over the course of six years and cost between $2.3 billion and $2.7 billion through fiscal year 2024. “The integrity of the nation’s voluntary tax compliance system depends on a modernized IRS IT infrastructure,” IRS Commissioner Charles Rettig said. He added that it was critical that lawmakers allocate additional funding over a multi-year period as it embarks on modernization so “we don’t start and stop and start and stop” and “our people can get the job done.” The IRS said it has identified four “Modernization Pillars” that reflect the scope of the agency’s mission and future development needs. Initiatives that help accelerate the IRS IT transformation have been grouped under each pillar. Over time, the IRS plans to include new initiatives based on emerging priorities and advances in technology, consistent with the broad outlines of the Modernization Pillars and input from partners in the tax community. The Modernization Pillars include:
  • Taxpayer Experience: The IRS will expand digital options, improve traditional channels, and provide simplified and proactive services for taxpayers and their representatives.
  • Core Taxpayer Services and Enforcement: Tax experience relies upon integrated case management, account management, and real time tax processing so that employees and taxpayers have a complete view of their interactions and history, regardless of the channel or the employee assigned.
  • Modernized IRS Operations: The IRS will use innovative technologies and processes, such as Cloud, Agile, DevOps, Application Programming Interfaces, robotic process automation, and next generation infrastructure, to reduce costs and manual effort.
  • Cybersecurity & Data Protection: The IRS will protect taxpayer data using advanced analytics and tools and align with government-wide cybersecurity standards and priorities.
The IRS says it wants to make it easier for taxpayers to check their information and payment options online. The plan would also enable the IRS to offer live, online customer support, conduct real-time tax return processing, and simplify identity verification. One part of the plan calls for the implementation of callback technology to reduce call wait and case resolution times. Former Commissioner John Koskinen noted that between fiscal years 2012 and 2017 the IRS lost almost 15% of its full-time workforce because of the budget cuts. The entire agency is understaffed, and people with years of experience retire each year without being replaced, Koskinen said. “For information technology, in some areas there are only one or two people left who understand the operations of specific parts of the system,” he said. “And, because of staff shortages, there is only one team in many areas with the expertise to do certain work, which means that they cannot work on several problems or improvements at once.” Despite the agency’s urgent need to upgrade its services, IT infrastructure and staffing, it should be noted that since 2010, the IRS’s budget has been slashed by more than 20 percent in inflation-adjusted dollars. President Donald Trump’s 2020 funding request proposes increasing the agency’s base budget to $11.5 billion from the current congressional appropriation of $11.3 billion. But the amounts are still far below what the agency received in 2010, which would equal about $14 billion in today’s dollars. Trump’s request, which serves as a marker of administration priorities, would put $290 million toward modernizing the agency’s technology. This is less than 13% of the minimum $2.3 billion the IRS estimates it needs for this six-year modernization effort. Put another way, it is already short of the number needed to be one sixth of the way to $2.3 billion.