Despite the additional challenges brought by the Tax Cuts and Jobs Acts (TCJA) and the partial government shutdown, the Internal Revenue Service (IRS) managed to close the tax season 2018 on a high by rolling out the much-awaited IRS Integrated Business Modernization plan. This extremely ambitious six-year roadmap forms a strategic framework that underpins the requirements of the agency to upgrade, tweak, and modernize its technology infrastructure to uplift the facilities and provide better experience to both tax practitioners and taxpayers.
Elaborating further, the proposed IT modernization plan comprises different initiatives and proposals aimed to be implemented in multiple levels to enhance the way the agency interacts with the tax community and individual taxpayers while upgrading the cybersecurity and data protection protocols. Besides upgrading IT systems, the agency is planning to develop a cutting-edge architecture to take the country’s tax system to the next level. This multi-year plan, which will rely heavily on future funding, also encompasses different business objectives along with multiple milestones and levels of accountability. The agency has planned to keep a close eye on the project and make necessary changes in the plan (if required) to align with the changing legislative, administrative, and business requirements as well as tax professionals feedback and technological advancements.
How modernization is going to benefit the tax community and the taxpayers?
The IRS has been continuously adding new systems in their network to cope up with the ever-increasing work pressure. However, this has resulted in increased expenses along with making the agency’s technical ecosystem more complicated and perplexing.
This is the reason why the IRS has decided to embrace innovative solutions to boost the process of infrastructure upgradation. By doing this, the federal government revenue service is expecting to ensure improvement in the facilities for both tax professionals and taxpayers while stabilizing the maintenance costs. Every year, for the next six years, the IRS will be replacing the traditional practices with modern technology that will eventually help the agency to:
1. Deliver high-quality service to the tax community and the taxpayers.
2. Enforce a highly secure and reliable platform for taxpayer-oriented applications.
3. Strengthen the digital transformation of traditional filing systems and documentation.
4. Extract and use existing data to identify tax noncompliance.
5. Stabilize the budget for maintaining the technology infrastructure and applications.
6. Reinvest saved capital to keep up the pace with the technology trends along with consistently promoting digital services.
Four ‘Modernization Pillars’ of IRS Integrated Business Modernization Plan
The agency pointed out four “Modernization Pillars”, which comprise online tools, web applications, advanced data analytics, and improved cybersecurity. These four pillars signify the agency’s mission and vision along with the future development requirements. All the strategies that will boost the IT transformation of the agency have been categorized and listed under each pillar. Over the years, the IRS will be including new strategies and initiatives suggested by the tax community as per the changing technology and priorities.
The agency has decided to add more digital options along with enhancing the traditional platforms and deliver simplified services to enhance the experience of the taxpayers and their representatives.
2.Core Taxpayer Facilities and Enforcement
The overall experience of the taxpayers depends heavily on integrated case management, account management, along with real-time processing. This allows both the taxpayers and the IRS employees to get a complete overview of their previous interactions and history, irrespective of the platform or the employee assigned.
3.Updated IRS Operations and Workflow
The agency will be implementing innovative technology solutions like the Cloud, DevOps, Agile, Process Automation Tools, and Application Programming Interfaces powered by the state-of-the-art infrastructure to alleviate manual efforts and keep a check on the rising costs.
4.Data Protection and Cybersecurity
Ensuring data protection is paramount. The federal government revenue service has decided to ensure all-round protection of the taxpayer data by implementing advanced analytics and hi-tech tools based on enterprise-grade security measures.
The Overall Cost Estimation, Oversight, and Accountability of IT Modernization Plan
As mentioned above, the agency will be upgrading and modernizing its technology infrastructure as well as the taxpayer services in two 3-year phases starting from this year itself. The overall approach, feasibility, cost, schedule, and the agency’s capability to deliver the same have been independently reviewed and authenticated. The agency has estimated that it will be spending anywhere from $2.3 billion to $2.7 billion in the next 6 years to attain their modernization objectives.
It is to be noted that the overall pace of the agency to deliver the new capabilities will depend significantly on the annual funding levels given to the agency. The assigned employees of the IRS will be reporting to Congress on a regular basis and also work in collaboration with the representatives of the tax community to implement the plan.