The wait for your refund might get longer, or at least less innovative.
IRS Acting Commissioner Melanie Krause, in an email to staff (seen by Bloomberg Law and reported by Tax Notes), announced a “standing down” of the agency’s Transformation and Strategy Office.
“During this transition, we are reviewing projects and initiatives under the IRS Strategic Operating Plan to determine their status and ensure alignment with future priorities,” Krause reportedly wrote in an email to employees on March 28.
The news arrives following claims of Department of Government Efficiency (DOGE) proposals to significantly reduce the agency workforce by May 15.
Oldie but not that goodie. A memorable 2022 photo essay from the Washington Post illustrated outdated technologies in local IRS offices charged with processing returns, including ’70s-era mail openers and the 2001 operating system Windows XP.
In February 2023, the US Government Accountability Office (GAO) determined 33% of IRS applications, 23% of software, and 8% of hardware as “legacy.”
That number is inflated. The Inflation Reduction Act (IRA) of 2022, signed by President Biden in August that year, allocated more than $79.4 billion for the IRS “to be used through September 30, 2031,” to improve taxpayer services and update antiquated computer systems. (Congress later adjusted the amount to approximately $57.8 billion.) As of September 30, 2024, the IRS had spent 16%, or $9 billion, of those IRA funds.
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What’s the plan? In July 2023, the IRS announced a chief transformation and strategy officer tasked with “making short-term and long-term improvements” to the agency’s five-objective Strategic Operating Plan, which included improving taxpayer services, resolution of taxpayer issues, enforcement on taxpayers with complex filings, cutting-edge technology, and workforce culture. Some technology ideas included “business online accounts” at IRS.gov, chatbots, and real-time alerts for easy-to-fix errors and missed credits.
How’d they do? While the IRS has reported recent digital improvements, including amended business forms that can be filed electronically, a March 2025 examination from the oversight group Treasury Inspector General for Tax Administration (TIGTA) also noted that the agency was unable to provide clear contracts for many legacy systems. (The IRS agreed with TIGTA’s recommendations, according to the study, conducted between December 2023 through October 2024.)
Leave IT. Approximately 50 IRS IT employees were reportedly placed on administrative leave this month—a move that followed other agency layoff announcements and planned reductions in early 2025.
A recently departed IT worker told FedScoop this week that DOGE representatives have been consulting with the agency’s CTO and deputy CIOs, without the “strategic” expertise of managers that have “the 100,000 foot view” of ongoing IRS tech projects and priorities.
An IRS spokesman did not return IT Brew’s request for comment.