After repeated calls from members of the tax community--including National Taxpayer Advocate Nina E. Olson--the IRS has released a new six-year plan to modernize its infrastructure (IR-2019-77, 4/18/19). The plan features a wide range of proposals for improving services for both taxpayers and tax practitioners while still protecting sensitive data.
“Modernized systems are the key component to delivering quality service to taxpayers, providing efficient and robust enforcement activities and keeping taxpayer data secure,” said IRS Commissioner Chuck Rettig. “Our modernization plan includes multiple milestones and levels of accountability to ensure it is implemented efficiently and effectively. The integrity of our nation’s tax system depends on modernizing IRS operations and the supporting technical pieces. We look forward to working with Congress to implement this plan.”
The idea sounds good, but it won’t come cheap. The IRS estimates that the cost will range from $2.3 billion to $2.7 billion over the six years ending in its Fiscal Year (FY) 2024. Some components of the plan are already in place for this year, while the administration’s budget proposal for FY2020 shows $290 million in funding for the plan.
The new plan calls for delivering new capabilities each year for the next six years. This includes:
Consistently providing superior service to taxpayers and the tax community;
Enabling a strong and secure systems platform for taxpayer-facing applications;
Expanding the digital conversion of paper case files and documentation;
Leveraging existing data to detect tax noncompliance earlier;
Delivering long-term budget and personnel efficiencies as the IRS decommissions legacy IT applications, automates manual processes and expands advanced analytics programs;
Stabilizing the rising cost of maintaining legacy applications and infrastructure; and
Reinvesting savings to keep technology current and expand digital services consistent with similar trends in the private sector.
Significantly, the IRS has identified these four “Modernization Pillars” to build around for the future.
1. Taxpayer Experience: The IRS will expand digital options, improve traditional channels and provide simplified and proactive services for taxpayers and their representatives.
2. Core Taxpayer Services and Enforcement: Tax experience relies upon integrated case management, account management and real-time tax processing. This provides employees and taxpayers with a complete view of their interactions and history, regardless of the channel or the employee assigned.
3. 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.
4. Cybersecurity and Data Protection: The IRS will protect taxpayer data using advanced analytics and tools and align to government-wide cybersecurity standards and priorities.
Note that the nation’s tax collection agency didn’t develop this plan completely on its own. It is collaboration between the IRS, outside experts and other stakeholders and partners in the tax community.
The new plan, which will be dependent on future funding, also includes milestones and accountability to ensure it is implemented efficiently and effectively. The IRS will provide regular reports to Congress and oversight organizations in addition to working with partners in the tax community to implement the plan. More information can be found in Fact Sheet 2019-9.
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a...