A Department of Government Efficiency (DOGE) representative said that the IRS has a number of decades-old, infrastructure-related problems and said that recent cuts have allowed the agency to save $1.5 billion.
Speaking to Fox News on Thursday, DOGE representative Sam Corcos said that while “a huge part of our government is collecting taxes,” the IRS “cannot perform the basic functions of tax collection without paying a toll to all these contractors.”
Corcos said that he’s found legacy contracts with outside technology consultants worth tens of billions of dollars for a systems modernization effort that is decades behind schedule.
That plan to modernize the IRS “is a huge program that’s currently 30 years behind schedule, and it’s already $15 billion over budget,” said Corcos, who is also the founder of health technology company Levels. “The IRS has some pretty legacy infrastructure ... and the challenge has been how do we migrate that to a modern system?”
The IRS is “now 35 years into this program,” he said elsewhere in the interview. “If you ask them now, it’s five years away, and it’s been five years away since 1990. It was supposed to be delivered in 1996, and it’s still five years away,” he added.
“I think we’ve so far stopped work and cut about $1.5 billion from the modernization budget, mostly projects that were putting us down this death spiral of complexity in our code base,” said Corcos, who also serves as a special adviser to the U.S. Treasury.
Both Corcos and Bessent praised the dedication of the IRS staffers, with Corcos saying that they have been “super cooperative” with the cost review. But he said that the agency’s IT costs are far above those of private-sector banks processing similar amounts of data.
Bessent also remarked that many IRS “employees are fantastic” but noted that an IRS consultant group has “constricted themselves around our government, and the costs are unbelievable,” which is “being passed on to the American taxpayer.” He did not name the consultant group in the interview.
“The entrenched interests, the consultants, the Democrats, mainstream media, they just want to blow this project out of the water,” Bessent told the outlet, referring to DOGE. “This is the opposite of government efficiency, not elimination, not extinction. Sam and his crew are making it more efficient to work for the American people. So what’s wrong with it working better, cheaper, faster, and with more privacy?”
The IRS last week said it was pausing technology modernization investments to reevaluate its operating approach in light of new artificial intelligence technologies. The pause marks another shift away from the original $80 billion in IRS investment funding over a decade that was included in former President Joe Biden’s 2022 Inflation Reduction Act.
The effort under the infrastructure bill was designed to make up for what its proponents said was years of under-funding to revamp outdated decades-old computer architecture, improving tax collection efforts from wealthy business owners and improving taxpayer services. Republicans said, however, that the measure would allow for tens of thousands of new IRS agents to be hired who they said would harass taxpayers while seeking to claw back some of that funding to the agency.
The Epoch Times has contacted the U.S. Treasury Department for additional comment.
