IRS to Receive $80B for IT Modernization Under Inflation Reduction Act

A Senate bill will provide the Internal Revenue Service with $80 billion in funding from the $430 billion reconciliation package to upgrade its IT systems and digital asset monitoring capabilities.

The proposed legislation, called the Inflation Reduction Act, stated that the modernization effort will improve taxpayer services, operations and cybersecurity. It allows IRS to invest the fund in technology, including automated callback systems for phone lines, to have a more personalized customer experience and use the budget to boost criminal investigations linked to cybercrimes and cryptocurrencies, FedScoop reported.

The climate and tax bill addresses inefficiencies in the IRS resulting from the continuous use of outdated systems and incompatible digital case management systems.

Rep. Gerry Connolly, chair of the House Subcommittee on Government Operations, attributed the operational difficulties and a lack of personnel in the IRS to insufficient technology investments.

Employing old technologies also cost the agency more since it needs to train new hires in using legacy applications.

Earlier in 2022, IRS Commissioner Charles Rettig expressed his disappointment over uncertainties in IT funding provided by Congress that prevent the IRS from forming an efficient technology plan.

Democrats approved the bill on Sunday. The House is expected to pass the legislation when it returns from recess on Friday, moving the bill closer to becoming a law.