W&M Oversight Hearing Shines Light on IRS’s IT Failures

Walorski: IRS’s Latest $7.25 Million Contract with Equifax “Abject Failure”
October 5, 2017 — Blog    — Hearing   

The Oversight Subcommittee, chaired by Rep. Vern Buchanan (R-FL), held a hearing yesterday to examine the Internal Revenue Service’s (IRS) information technology (IT) modernization efforts. The hearing took place just weeks after the Equifax data breach – which put the personal information of millions of taxpayers at risk.

As Chairman Buchanan stressed in his opening remarks, the IRS’s outdated IT infrastructure not only fails to help taxpayers, in many cases it has hurt taxpayers:

“The importance of this topic cannot be understated. A modern and efficient IT infrastructure is essential for effective tax administration, something that we all would like to see.

He added:

“Work from both the GAO (Government Accountability Office) and the Inspector General has shown many instances where the IRS’s decision making had led to significant IT problems … As we examine tax administration reforms … changes to the budget must be coupled with better management and governance of the resources the IRS already has.”

Raising questions about how the IRS spends its resources, Rep. Jackie Walorski (R-IN) immediately asked the IRS to explain why it awarded Equifax – whose carelessness exposed the confidential information of 145 million Americans – a $7.25 million contract just last week on the last day of Fiscal Year 2017.

Neither Gina Garza, Chief Information Officer (CIO) of the IRS, nor Jeffrey Tribiano, Deputy Commissioner for Operations Support of the IRS was responsible for the latest Equifax contract nor were they aware that the contract was signed until this morning.

Rep. Walorski replied:

This is an abject failure. If nothing else it shows that the IRS structurally needs some reform and needs major change … I don’t think there is anything anybody can say other than pointing the finger.”

As David Powner, Director of Information Technology Management Issues at the GAO, pointed out, Congress has spent years working to support the IRS’s IT modernization through legislation. Referencing a law that Congress passed in 2014 – the Federal Information Technology Acquisition Reform Act (FITARA), he said:

“One of the provisions in that law [FITARA] is to strengthen CIO authorities. CIOs should approve the IT budget, they should approve major IT contracts, that’s a provision in the law. And I can tell you right now that was put in there because of this stuff [referencing the Equifax funding granted by the IRS] that’s happening … if we would simply approve IT contracts by CIOs, that would solve this problem.”  

Rep. David Schweikert (R-AZ) stated that the U.S. CIO required all agencies to leave the 20th-century technology behind and shift to integrated cloud-based systems. When he asked Ms. Garza why those efforts have fallen short, she replied:

“Although we do not have a cloud strategy documented, we have for the last several years been taking on elements of the cloud strategy.”

When Rep. Tom Rice (R-SC) asked if anyone on the panel thought that the modernization efforts of the IRS have been acceptable – every witness agreed the IRS is falling far short and failing taxpayers.

Chairman Buchanan ended the hearing by stating that the IRS needs an IT modernization plan, and that this plan needs to estimate expected economic returns before Congress commits additional funds to the agency.

“I’d like someone to tell me ‘here’s what we need to invest, but here’s the efficiency coming out of the system.’ … I’m big on planning personally as a business guy, because if you don’t have a vision you perish … we need to have a plan.”

 The Ways and Means Committee will continue working to ensure that taxpayers have a tax collecting agency that works for them.

CLICK HERE to learn more about the hearing.