Treasury partners with tech contractors on IRS modernization

The Treasury Department reported it has made significant progress on modernizing information systems at the Internal Revenue Service and signed agreements with a number of third-party contractors to help deliver the improvements.

The Treasury said Tuesday it has entered into a series of Blanket Purchase Agreements with several technology providers. All the tools have been vetted by the Federal Risk and Authorization Management Program, or FedRAMP, which provides a standardized approach to security assessment, authorization and monitoring of cloud products. Earlier this year, the Treasury Department announced a "strategic pause" on technology modernization efforts amid budget and staffing cuts at the IRS.

To modernize taxpayer-facing services and online accounts at the IRS, the Treasury has extended its contract with Salesforce. The agreement aims to support improvements to individual and business online accounts, the Tax Pro Online Account, and authenticated online services, including customer contact centers.

For tax processing, the Treasury said it's continuing to advance its Zero Paper Initiative, reducing paper-based filings and accelerating digital adoption. To support this work, Treasury has executed contracts with Iron Mountain and three other industry partners: GovCIO, VASTEC, and 22nd Century. The IRS separately confirmed this week that it's phasing out paper refund checks by Sept. 30 as part of an executive order signed by President Trump in March.

To continue improving data integrity and technical infrastructure, the Treasury Department has awarded a contract to Palantir to enable a common API layer that supports developer platforms, workflow automation, and data analytics. According to the Treasury, the work will support federal employees, increasing efficiency for their professional duties. Palantir has reportedly also been working with the Department of Homeland Security's Immigration and Customs Enforcement unit on developing technology for tracking noncitizens and deporting them. The IRS has come under pressure this year to share information with ICE and DHS on suspected noncitizens, leading to the departures of several high-ranking IRS officials, including former acting commissioners.

The Treasury Department said it plans to continue to engage with industry partners and leverage modern technology solutions to achieve its modernization goals, and will provide updates as more contracts are awarded and milestones achieved.

The IRS and the Treasury have been faulted for problems in the technology systems being used, including a recent report from the Treasury Inspector General for Tax Administration on vulnerabilities in the IRS's Big Data Analytics platform.