Security and Modernization among IRS Top Management Challenges
Published: October 24, 2019
The IRS faces most of the same management challenges in FY 2020 as it did in FY 2019, including taxpayer data protection, security, operations modernization and reducing improper payments.
Last week the Treasury Inspector General for Tax Administration (TIGTA) released its annual assessment of the most serious management and performance challenges facing the IRS in FY 2020. According to TIGTA, the following are the most critical management and performance challenges for the IRS this fiscal year in order of priority:
- Security Over Taxpayer Data and Protection of IRS Resources
- Implementing Tax Law Changes
- Addressing Emerging Threats to Tax Administration
- Supporting an Enhanced Taxpayer Experience
- Modernizing IRS Operations
- Improving Tax Reporting and Payment Compliance
- Reducing Fraudulent Claims and Improper Payments
- Impact of Global Economies
- Protecting Taxpayer Rights
- Achieving Operational Efficiencies
All of the areas were also listed as challenges in TIGTA’s FY 2019 assessment. However, the scope of some challenges was broadened for inclusion in the FY 2020, such as “Implementing Tax Law Changes” which would have encompassed the FY 2019 category of “Implementing the Tax Cuts and Jobs Act and Other Tax Law Changes.”
In addition, human capital is an underlying problem for all of the management challenges cited in the report. IRS Commissioner Charles Rettig has said that the agency “essentially lost an entire generation of IRS employees” through a hiring freeze that extended from 2011 through 2018. And approximately 45% of the IRS workforce will be eligible to retire within the next two years.
TIGTA acknowledged IRS progress on improving electronic authentication controls on its public-facing applications but found that the applications were not yet compliant with NIST authentication guidelines. IRS also needs to ensure that contractors or other third parties adequately protect taxpayer data. TIGTA also found significant vulnerabilities within the IRS Bring Your Own Device (BYOD) program. According to TIGTA, the IRS also needs to do more to protect against internal threats.
IRS is also working to reduce and prevent the filing of fraudulent tax returns. The IRS will be using 193 identity theft filters for the 2019 tax filing season. In addition, the IRS continues to explore programs and processes to improve the sharing of identity theft information through the Identity Theft Tax Refund Fraud Information Sharing and Analysis Center (ISAC).
Another challenge for FY 2020 is improving the taxpayer experience, which aligns with a key aspect of the President’s Management Agenda and is an important component of the IRS’s mission. Taxpayers have multiple options for IRS assistance including toll-free telephone lines, face-to-face assistance at Taxpayer Assistance Centers or Volunteer Program sites, and self-service using IRS.gov and other social media channels (e.g., Twitter, Facebook, YouTube). IRS continues to implement technology-based solutions to improve customer service, due to budget and human resource constraints. This approach allows the IRS to focus limited telephone and walk-in resources on customer issues that require person-to-person interaction.
As the IRS strives to overcome its FY 2020 management challenges, they will need contractor help to conquer some of these hurdles such as IT systems modernization, reducing fraudulent claims and improper payments, improving digital services, and continually enhancing cybersecurity programs. Contractors should look for opportunities to solve IRS problems in these strategic areas.