The IRS’s National Taxpayer Advocate, Erin M. Collins, is calling on Congress to help reallocate certain funds from the IRS’s Inflation Reduction Act funding to assist in its modernization efforts.
Collins discusses this need in detail in the agency’s mid-year report to Congress, making it clear that the IRS needs to continually modernize to meet taxpayers’ demands after many years of abysmal services.
“When I look back eight years from now on how the IRS spent its Inflation Reduction Act funding,” Collins said, “the changes I consider ‘transformational’ will primarily involve the deployment of new technology and innovative thinking.”
The report notes that the agency has made great progress in modernizing many of the tax agency’s technological capabilities but that more funding will be needed going into the future.
“I encourage members to ensure that taxpayer services and technology modernization – the truly ‘transformational’ component of the IRS’s Strategic Operating Plan – are adequately funded to meet the needs of the taxpaying public and to conduct regular congressional oversight to ensure the funding is well spent,” she said.
The agency was originally granted $80 billion in funding from the Inflation Reduction Act (IRA), but this number was eventually reduced to $58 billion.
Of that, just $3.2 billion was allocated to taxpayer services and $4.8 billion for business systems modernization.
The report notes that the agency will need to continue to enhance transparency by modernizing its technological processes.
“As the IRS’s modernization of technology involves the implementation of artificial intelligence, such as in existing voicebots and chatbots, the IRS must remain transparent about its use of AI, particularly as those uses affect taxpayer rights and data privacy,” Collins says in the report.
