A recent audit by the Treasury Inspector General for Tax Administration (TIGTA) reveals that the IRS lacks a clear strategy for modernizing its legacy systems, leading to significant delays and security vulnerabilities for taxpayers.

The IRS's IT infrastructure costs have surged by 35% from $2 billion in 2019 to $2.7 billion in 2023, with expectations for continued increases if legacy systems are not retired.

The closure of the IRS's Technology Retirement Office in early 2023 has exacerbated the situation by eliminating a dedicated program for managing outdated IT systems.

TIGTA has recommended the re-establishment of the Technology Retirement Office or the creation of a similar program to address the IRS's modernization challenges.

Currently, a significant portion of the IRS's technology is obsolete, with 33% of applications, 23% of software, and 8% of hardware considered essential yet outdated.

Some IRS systems still rely on outdated programming languages like COBOL and assembly language, which are decades old and hinder modernization efforts.

The IRS has allocated tens of billions from the 2022 Inflation Reduction Act towards its technology transformation, which the agency's commissioner has termed a 'generational imperative.'

In March, the Government Accountability Office criticized the IRS for lacking a detailed technology agenda, which could impede its transformation efforts.

The IRS plans to incrementally replace legacy capabilities with new common platforms for case management and other operations, prioritizing objectives set by the Transformation Steering Committee.

The current state of the IRS's technology poses a serious risk to taxpayers, who depend on the agency for effective financial management.

TIGTA's report also highlighted inaccuracies in how the IRS identifies its legacy technology, prompting the agency to commit to improving the accuracy of its technological assessments.

Despite some improvements since 2020, the IRS has only successfully implemented two out of four recommended modernization strategies, indicating a poor track record in updating its technology.