IRS Sets Sights on Data, Cyber in Next Phase of Modernization Plan

The IRS is nearing the end of its two-part modernization plan first phase, a thee-year journey that set the infrastructural and digital foundation upon which the IRS will build on in the second phase throughout fiscal years 2023 to 2025.

As for what will occur in phase two, IRS CIO Nancy Sieger hinted at some of the near and far future modernization initiatives that her agency will embark on next during an FCW virtual event Tuesday. More specifically, she highlighted three key main modernization features for the agency: data, cybersecurity and digital services.

“I believe that the keystone to success in a digital environment is strong cybersecurity and a strong data strategy,” Sieger said. “Data continues to be one of our most significant assets, and IRS information technology is unlocking the power of data by delivering a state-of-the-art enterprise data platform that improves access to data and enables more self-service reporting. That will be something you’ll see heavily in the next iteration of our modernization plan. We will then move into the use of analytics and AI in our space.”

Sieger added that a strong foundation around data can enable better analytics and testing capabilities. Advancements in the agency’s data capabilities and respective testing are allowing the IRS to better prepare for its filing season in the winter.

Recently, the IRS has been putting the “final touches” on its changes to the filing system for the coming tax season, and the agency will enter its testing phase. Sieger said this will lead to improved self-service options with the digital filing space for taxpayers — strides that were made possible due to funding from the American Rescue Plan.

“A lot of that expansion is in the digital space,” Sieger said. “We have accelerated some of the self-service options through your online account. We have accelerated our new secure access system, enabling more citizens to authenticate with the IRS. We have accelerated our multilingual delivery of our services, and next year we will keep … our modernized e-file system open 24-7.”

Improvements in the coming year will include an expansion in taxpayers’ ability to upload pictures of tax documents via computers and mobile devices, and in the message center, taxpayers will be able to opt-in to receiving electronic or opt-out of receiving paper notices.

In terms of cybersecurity, Sieger acknowledged that the current technological environment has created new challenges in the cybersecurity space for federal agencies, so the IRS will be focusing on implementing systems to keep taxpayer information secure.

“Cybersecurity continues to be our constant focus,” Sieger said. “We’ll be moving taxpayer-facing applications to a modernized identity-proofing system … which has more robust security and more help for those citizens and engaging in that new way of authenticating.”

More broadly, the IRS will also be adopting modern cybersecurity practices and architectures, such as zero trust.

“We’re also continuing to focus on protections against external threats through implementing a zero trust architecture,” Sieger said. “If fact, when you look at our modernization plan, you will see many of our cybersecurity high-level focus areas — zero trust architecture, data encryption on our system — so our employees know that security’s first. That is just as important to us as increasing our velocity — increase our security and staying ahead of threats.”