The IRS announced a “strategic pause” on its technology upgrades Friday, saying it wants to review all its systems to see what should be allowed to continue — including the popular Direct File program.
Begun by the Biden administration, Direct File gives taxpayers a free option to fill out and file their returns online, rather than use paid services such as TurboTax.
“Direct File is a program that is being reviewed together with many of the other technologies,” a senior IRS technology executive told reporters Friday.
Both Direct File and “Where’s My Refund,” another successful IRS tool, are still operating, as Tax Day approaches in a month.
He said the agency’s modernization effort is decades behind schedule and billions of dollars over budget and deserves an overhaul to see what works.
The pause is part of a broader overhaul at the tax agency, which is also planning thousands of staff cuts.
The senior tech official said they haven’t settled on a target number for cuts, but said the workforce does face changes, too.
“This is part of a holistic new approach to delivering on IRS’s critical missions and as a result we’re going to turn that organization around from all sides,” the executive said.
The IRS has been a major battlefield over the last 15 years, with Republicans working to pare down the agency and Democrats, when they had total control of Congress and the White House, working to build it back up again.
Direct File was one of the battles.
After Congress passed a law promoting a study of the program, the Biden IRS conducted the study, brushed aside legal questions and moved ahead with a full pilot program.
Direct File, which is available in 25 states this year, proved to be largely popular, though it also has persistent critics.
The IRS official who briefed reporters on Friday didn’t say what the review of the program — or other IRS technology — entails.
He did say that advances such as artificial intelligence are changing the way the agency thinks.
A decade ago, for example, the IRS was trying to figure out what to do with legacy computer systems written in old programming languages that are difficult to support.
Now, thanks to AI, the agency can extract the legacy code without needing a major reprogramming effort.
