A major effort to upgrade the Internal Revenue Service’s technology systems has hit significant obstacles, according to recent statements made by government technology advisers during an interview with Fox News.
Sam Corcos, a technology expert working to modernize the IRS under the Department of Government Efficiency, explained that the project is facing delays that span more than three decades and has exceeded its original budget by billions of dollars. Appearing alongside Treasury Secretary Scott Bessent, Corcos described the magnitude of the challenges ahead.
“I was brought in to evaluate the IRS modernization project, particularly focusing on the operations and maintenance budget,” Corcos shared. “This effort is now 30 years behind its original schedule and has gone more than $15 billion over budget.”
He went on to describe how outdated the IRS’s infrastructure remains. “The IRS is still relying on legacy systems — including old mainframes running COBOL and Assembly code — that should have been replaced decades ago. Most major financial institutions have already modernized their operations, but these systems remain.”
Corcos emphasized how, in private industry, a transition of this scale would normally take a few years and cost a fraction of what has already been spent. “In the private sector, this might take three to five years and cost a few hundred million dollars. Here we are 35 years later, and it’s still incomplete. The original deadline was 1996.”
He warned that the outdated systems make basic functions, like tax collection, overly complicated and expensive. “The IRS depends heavily on outside contractors to keep these old systems running. That dependency adds tremendous costs to the taxpayers.”
Treasury Secretary Bessent added that much of the problem stems from reliance on long-standing contractors rather than IRS employees themselves. “Many of the staff members working at the IRS are dedicated and talented,” he said. “But the network of consultants surrounding these systems has become a major obstacle. It’s almost like a stranglehold on progress, driving up costs and slowing down modernization efforts.”
Bessent stressed that the goal is not to eliminate important government functions but to make them more efficient, affordable, and secure. “If we can make government work better, faster, and at a lower cost — all while protecting citizen privacy — that should be the goal,” he stated.
Meanwhile, separate comments by Elon Musk, head of the Department of Government Efficiency, have added even more urgency to the need for reform. During a conversation with Senator Ted Cruz on a podcast, Musk discussed the discovery of so-called “magic money computers” — systems embedded within several federal departments that process large financial transactions with limited oversight.
Musk explained that there are about 14 such systems primarily located at the Department of Treasury, but also found in other agencies such as Health and Human Services, the State Department, and the Department of Defense.
“These systems are able to process payments and move money with very little tracking,” Musk noted. He suggested that spending inaccuracies in these departments could lead to discrepancies amounting to as much as 5% of their total budgets.
Senator Cruz pointed out that if Musk’s estimates are accurate, these errors could potentially amount to trillions of dollars in financial mismanagement across federal agencies.
Musk emphasized that more transparency and modernization are needed to prevent these irregularities and ensure that taxpayer money is handled properly.
As the IRS and other departments push forward with efforts to modernize, these revelations have highlighted the critical need for updated technology, stricter accountability, and smarter financial management across the federal government. Though the challenges are daunting, leaders like Corcos, Bessent, and Musk appear committed to driving improvements for the benefit of American citizens.