The Department of Government Efficiency (DOGE), a Trump administration initiative, has led to significant budget cuts at the Internal Revenue Service.
On Thursday, Sam Corcos, a member of DOGE and the founder and CEO of health technology firm Levels, announced that he has canceled about $1.5 billion in contracts from the IRS’ technology modernization budget.
Corcos, who also serves as a special adviser to the Treasury, told Fox News Channel that his review uncovered legacy contracts with outside technology consultants worth tens of billions of dollars, contributing to a modernization effort that has been delayed for decades.
“I think we’ve so far stopped work and cut about $1.5 billion from the modernization budget, mostly projects that were putting us down this death spiral of complexity in our code base,” Corcos said.
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The cuts come from an annual modernization budget of $3.7 billion, which is separate from the $3.5 billion allocated for IRS information technology systems. However, the size and legality of many DOGE-related spending cuts have been challenged in court.
Last week, the IRS announced it was pausing technology modernization investments to reassess its approach in light of new artificial intelligence advancements. This marks another shift away from the $80 billion in IRS investment funding originally included in former President Joe Biden’s 2022 Inflation Reduction Act.
The modernization plan was designed to replace outdated 1960s-era computer systems, enhance taxpayer services, and strengthen the IRS’ ability to conduct more sophisticated audits of high-income individuals and businesses.
For years, Republicans in Congress have worked to roll back IRS funding, arguing that it was intended to harass taxpayers. A series of stopgap funding measures have already reduced the original $80 billion by nearly half.
Despite the cuts, Corcos praised the IRS’ 8,000 career information technology employees, calling them “super cooperative” throughout the cost review. However, he pointed out that the agency’s IT costs remain far higher than those of private-sector banks processing similar amounts of data.
(REUTERS)
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