In a recent announcement, tech startup executive Sam Corcos has revealed that he has canceled contracts worth $1.5 billion from the Internal Revenue Service’s technology modernization program budget. Corcos, who is a member of President Trump’s Department of Government Efficiency, has identified legacy contracts with outside technology consultants worth tens of billions of dollars for a systems modernization effort that is years behind schedule.
Corcos has already cut $1.5 billion from the IRS modernization budget, out of an annual budget of $3.7 billion. This move comes as part of a larger effort to reevaluate the agency’s operating approach in light of new artificial intelligence technologies, after pausing technology modernization investments last week.
The original $80 billion IRS investment funding over a decade, included in former President Biden’s 2022 Inflation Reduction Act, aimed to revamp outdated computer architecture, improve taxpayer services, and enhance tax collection capabilities through more sophisticated audits. However, Republicans in Congress have long pushed to reduce this funding, arguing that it was excessive and potentially targeting taxpayers.
Corcos praised the dedication of the IRS’ information technology employees, but noted that the agency’s IT costs are significantly higher than those of private-sector banks processing similar amounts of data. The move to cut contracts and reevaluate technology modernization efforts is seen as a significant step towards improving efficiency and reducing taxpayer burden.
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