Open Letter to Elon Musk: Continue Critical IT Investments for the IRS

Elon Musk
Department of Government Efficiency (DOGE)

You have redefined innovation in the United States by revolutionizing banking, automobile and space industries. As the Head of DOGE, you are now taking on the challenge of streamlining government operations. A key priority should be driving modernization and innovation within the government itself.

While government technology may not be as glamorous as commercial innovations, it does provide the foundation for helping agencies achieve the highest level of effectiveness and mission success – especially when it comes to the Internal Revenue Service (IRS). Many agencies like the IRS still operate systems created in the previous century and need the momentum and impetus to continue to modernize to handle future challenges.

The IRS is a fundamental agency tasked with enforcing tax laws – laws that are the backbone of our nation’s ability to function. Last year alone, income taxes brought in nearly $5.1 trillion, representing 96% of total federal revenue. The revenue brought in by the IRS funds our nation’s collective aspirations, including national defense, infrastructure, education, and the further exploration of space. Without a modern and effective tax collection system, none of these endeavors would be sustainable.  

Americans don’t hate the IRS – they dislike the tax code. The post-COVID IRS recognizes the need for a modernized and better taxpayer experience. Through the implementation of President Trump’s Taxpayer First Act (TFA), the IRS has advanced its digital footprint; increased interactions with taxpayers, tax professionals and businesses by enhancing web portals; and standardized and modernized some key technical services.

These advancements have improved internal operations and uplifted the customer experience. The IRS now meets taxpayers on their terms – whether in person, by phone, or through digital channels.

Yet, the IRS is still burdened with outdated technology. The main underlying system dates to the 1960s and still relies heavily on COBOL, a programming language largely abandoned by modern software developers. While COBOL was groundbreaking in its time, it’s simply not equipped to meet the processing demands of today’s data-driven and rapidly evolving digital environment.

The IRS has a vast amount of data that can support easing taxpayer reporting obligations while also strengthening the US economy. However, the agency’s technological stagnation limits efficiency, hampers data utilization, and poses challenges to the voluntary compliance model that forms the cornerstone of our tax system.

Thankfully, the Inflation Reduction Act (IRA) of 2022 took a significant step in addressing this issue by providing funding to modernize the IRS’s IT infrastructure. These investments are designed to make taxpayer data more secure, usable, enhance system reliability, and ultimately build a tax collection process that matches the speed and complexity of modern financial systems.

For the IRS, modern technology will not only improve efficiency but also strengthen public confidence in the fairness and functionality of the tax system. This is reflected by the IRS’s Direct File initiative receiving the 2024 FedScoop 50 Innovation of the Year Award.

As a champion of innovation, I encourage you to support ongoing investment in technology modernization for the IRS. By working together, we can ensure that the systems underpinning our nation are as forward-thinking as the ambitions they help finance. 

Sincerely,
Kaamil Khan
President
Makpar Corporation