IRS IT Annual Key Insights Report Provides Window into Modernization Progress

In July, IRS released its IT Annual Key Insights Report which summarizes major accomplishments related to its six year Integrated Modernization Business Plan and previews the agency’s broader modernization journey in the years ahead.

IRS is three years into its modernization journey to improve information technology systems, cybersecurity, and how the agency interacts with taxpayers and the tax community.

Listed below are highlights from the annual report mapped to the eight major goals of IRS’s broader IT strategic plan:

The final pages of the report are dedicated to looking ahead. The report states, “With limited funding, we replanned and delivered more than 80 new capabilities and enhancements in the first 3 years of implementing the IRS Integrated Modernization Business Plan that collectively improved the efficiency and security of our technology environment.”

Given the progress the agency made in the first three years of modernization with only partial funds received from the American Rescue plan, the report states that the agency may be able to double IT modernization programs with additional funding expected from the American Rescue Plan.

Nancy Sieger, IRS CIO, said in the report, that although the agency dealt with “unprecedented demand due to the pandemic” it made significant progress in reaching IT modernization goals.

According to the report, IRS plans to publish an updated IRS Integrated Modernization Business Plan called “Mod Plan 2.0” in FY 2022. The updated plan will provide a “long-term approach to technological advances” and incorporate lessons learned from the last three years of modernization efforts.

In looking ahead, the report states, “By FY 2023, the IRS aims to deploy a new and modern IT services platform that ultimately provides both internal and external stakeholders with a more reliable, accurate and better experience. Our SaaS implementation will enable informed decision-making, quicker service restoration and improved efficiency, scalability and adaptability.”

A summary of future foundation technology focus areas as listed in the report is shown below:

In addition to monies from the American Rescue Plan, IRS was just allotted $4.75B from the Inflation Reduction Act specifically for Business Systems Modernization to include development of callback technology and other technology to provide a more personalized customer service but not including the operation and maintenance of legacy systems. In total, the Act provides IRS funding of $80B for taxpayer services, enforcement, operations support, design of a free eFiling system, and funding for other IRS offices.

In a memo last week to IRS Commissioner Charles Rettig, Treasury Secretary Janet Yellen requested a plan from the agency for accomplishing the requirements set forth in the Inflation Reduction Act legislation.  IRS has six months to develop and deliver its plan for IT overhaul and staff expansion stemming from the bill.

As IRS continues to modernize, federal contractors my find opportunities to provide products and services to the agency in the areas of PaaS, SaaS, multi-cloud management, data management, analytics solutions, IT management, legacy system re-architecture, and cybersecurity.