A new report from the Government Accountability Office (GAO) reveals that the Internal Revenue Service (IRS) has paused its IT modernization programs and is developing a new IT modernization framework.
According to the Sept. 16 report, the IRS had 23 active IT modernization programs as of September 2024. However, in March 2025, the IRS told GAO that it had paused its modernization programs “because it was reevaluating its priorities.”
“The agency subsequently shared a draft modernization framework it was developing that included nine initiatives that it planned to pursue instead of the 23 programs. The nine are designed to meet specific technology demands, such as a unified application program interface,” the GAO report says.
“According to a June 2025 Taxpayer Advocate report to Congress, to enable this reprioritization, many projects continue to be paused or have been canceled,” it adds.
The pause in the IRS’s IT modernization efforts comes after the agency spent a considerable amount of money on IT in fiscal year (FY) 2024. According to the report, the IRS spent about $5 billion on IT in FY 2024, including $1.5 billion on modernization programs reported to Congress.
In addition, GAO said that from FY 2020 through FY 2024, the IRS spent $6 billion on modernization and $19 billion overall on IT.
Notably, the IRS received approximately $4.8 billion through the Inflation Reduction Act of 2022 to modernize its business systems. That funding will remain available through the end of fiscal year 2031.
In written comments to the report, IRS Chief Information Officer (CIO) Kaschit Pandya explained that the new IT modernization framework will “consolidate efforts into key initiatives.” The CIO said these include enhancing application programming interfaces, automating processes, and integrating modern technology to replace legacy systems.
According to GAO, the nine initiatives in the framework aim to meet specific technology needs, “such as developing a unified application program interface, reducing reliance on paper records, and improving taxpayer service.”
“IRS did not provide the broader strategic vision for the framework, nor implementation details, but said it would continue to evolve the framework through stakeholder engagement and cross-functional coordination,” the federal watchdog said.
“As IRS fully develops its new IT modernization framework, it will continue to be important for the agency to (1) align new initiatives with documented agency strategic objectives, and (2) have program plans that address key elements. In addition, for the 23 programs that IRS was previously pursuing, it is also important that IRS consider the usability of the work performed to date,” GAO said.
While GAO did not offer any new recommendations in its report, the federal watchdog said that it has previously made 33 recommendations to the IRS to address legacy system risks and to improve modernization plans.
The IRS has not yet implemented 10 of those recommendations, according to GAO. In written comments on a draft of the report, the IRS agreed with GAO’s findings.