President Biden’s nominee to serve as the commissioner of the Internal Revenue Service (IRS), Daniel Werfel, pledged his commitment today to members of Congress that cybersecurity will be a “top priority” of his if confirmed.
During a Senate Committee on Finance hearing today to consider Werfel’s nomination, the nominee explained protecting taxpayers’ information is top of mind for him.
“When I sat down to think about what are the most important elements of tax administration that I could think of, data security was the first thing I wrote down,” Werfel told the committee. “It’ll be one of the first questions I ask if I’m fortunate enough to be confirmed. What is our baseline right now in terms of our cyber resiliency and our cyber performance? What are the risks? What is the, as we update the technology, that technology backbone? What changes do we need to make, not so that it’s bolted on and therefore potentially less robust, but deep in the roots of the system itself?”
“I don’t have a good feel for, right now, what the risk profile is, but it is a top priority to understand it because it’s mission-critical,” he added.
To better protect taxpayers’ information and bolster the IRS’ cyber posture, he noted that the IRS’ investments could be put to better use.
If confirmed, Werfel would take over the agency after the Inflation Reduction Act provided $80 billion of new funding over ten years for the IRS.
The new funding aims to help modernize the agency’s business systems, including nearly $5 billion to hasten work on the agency’s three-year-old IT modernization plan, which had already received $275 million from the fiscal year 2022 budget and a one-time shot of $1 billion under the American Rescue Plan Act in 2021.
“The Inflation Reduction Act certainly is an opportunity to strengthen the overall resources that we have, increase customer service, technology that is strategically placed within the customer service solutions that are efficient, that questions that taxpayers have can be answered by technology – and we should be putting those in place and testing those,” Werfel said. “I think all of these things would be part of a plan that I hope to work with this committee on for improving service.”
Sen. Bill Cassidy, R-La., asked Werfel about his openness to moving the IRS’ systems to the cloud, providing a cloud-based service that can offer greater security and an improved ability to handle highly-classified material.
“This question about information technology and how to make sure that, going forward, IRS investments are performing better for taxpayers is front and center in my priorities if I’m confirmed,” Werfel said in response.
“I would give this serious consideration,” he continued. “I think we want to move systems into the 21st century. And it goes without saying that technology that’s enabled in a cloud, as you point out, can be secure. It can be more efficient, and it [often] can be more cost-efficient. So, absolutely, it has to be an alternative.”
The nominee noted that it’s “premature” for him to give a firm answer on whether or not he will move to the cloud, but pledged his commitment to analyzing all IT modernization options.