IRS Finally Adopts Cloud Strategy, but Legacy IT Plagues the Agency, IG Says

Despite some progress on its enterprise wide cloud strategy, the Internal Revenue Service (IRS) struggles with legacy IT that prevents it from collecting billions in tax revenue, according to the Treasury Department Inspector General (IG).

“The IRS’s ability to successfully modernize its information technology foundation is critical to delivering modern taxpayer service and enforcement in a cost-effective way,” the IG states in the March 11 audit. “Moreover, legacy technology is preventing the IRS from collecting billions of dollars, protecting against fraud, and truly transforming the taxpayer’s experience.”

The agency’s Cloud First strategy only partially meets Federal guidance. IRS lacks an enterprise-wide cloud portfolio assessment, fails to outline specific details on decommissioning legacy systems, and is not prioritizing a Cloud Smart update to its strategy, among other shortcomings.

To improve the agency’s cloud approach, the IG asks the CIO to ensure that the IRS enterprise-wide cloud strategy is updated periodically to reflect new guidance and to develop all workstreams needed for implementing its cloud strategy.

On updating IRS legacy IT systems, the IG made three more recommendations to the CIO: approve the Cloud Governance Board charter providing the appropriate personnel with the authority to develop cloud guidance and standards; develop enterprise-wide policies addressing cloud requirements that must be met before procuring cloud services; and adhere to the Federal Information Technology Acquisition Reform Act (FITARA) and Cloud First policy by requiring all new IT projects be evaluated by the Enterprise Cloud Program.

IRS management agreed with all recommendations and plans to implement them by Fall 2021. Two recommendations, approving the Cloud Governance Board charter and updating the enterprise-wide cloud strategy, were met earlier this year.

“We agree with the recommendations, will update our cloud strategy and continue to evolve our existing processes to ensure new technologies implemented at the IRS follow rigorous methods,” Acting CIO Nancy Sieger wrote in a letter to the IG.

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