An alarming financial and operational predicament looms over the Internal Revenue Service (IRS).
According to Fox Business, the modernization program of the IRS, severely overextended both financially and temporally, has exceeded its budget by $15 billion and is 30 years overdue.
The Department of Government Efficiency (DOGE) has raised significant concerns regarding the delayed and costly IRS modernization efforts. Initially slated for completion in 1996, the IRS is still wrestling with outdated systems, having not achieved its modernization targets.
Sam Corcas, appointed to oversee the IRS modernization review by notable figures Donald Trump and Elon Musk, has himself criticized the lingering reliance on outdated technology. In a recent interview on "The Ingraham Angle," Corcas lambasted the IRS's continued use of ancient mainframes that operate on COBOL and Assembly languages—technology long abandoned by most financial institutions.
"The IRS has some pretty legacy infrastructure. It’s actually very similar to what banks have been using. It’s old mainframes running COBOL and Assembly. And the challenge has been, how do we migrate that to a modern system? Virtually every bank has already done this, but we’re still using a lot of those same systems, and typically in industry, it takes a few years, maybe a few hundred million dollars, and we’re now 35 years into this program."
Contrasting the IRS to a typical midsize bank's IT department, Corcas highlighted an astonishing discrepancy in staffing and budget allocations that underscore the agency’s inefficiency.
The sprawling nature of the agency's IT operations includes a whopping 8,000 staff members and an annual operations budget of $3.5 billion. Corcas pointed out that this is considerably larger than the resources allocated by midsize banks, which typically employ between one to 200 IT personnel with a yearly budget of about $20 million.
"I don’t really know why yet, but I will tell you that 80% of that budget goes to contractors and licenses," Corcas remarked, revealing a substantial dependence on external parties for operational needs.
Treasury Secretary Scott Bessent has echoed these concerns, equating the impacts of IRS contractors to "boa constrictors" that tighten their grip on governmental functions.
The IRS restructuring involves significant personnel changes, with plans to lay off approximately 6,000 employees during the tax season as part of a federal workforce downsizing effort initiated by the Trump administration. This comes as the entire federal spending aims to be reduced by $2 trillion, under guidance from the DOGE.
The main focus of the modernization efforts is "how do we turn this around," considering the IRS is "way beyond any reasonable cost for what you would expect of a private company" for such a modernization program.
Despite the daunting numbers and critical oversight, DOGE reports some progress with a claimed $115 billion in estimated savings or about $714.29 per taxpayer.
In summary, the IRS's attempt to modernize its technology and operations remains vastly over budget and behind schedule, leading to significant financial scrutiny and strategic workforce cuts.
The agency's heavy reliance on outdated technology and costly contracts has drawn substantial criticism, emphasizing the need for a more efficient and cost-effective approach to government operations.
