IRS Highlights the Danger of Aging Government Tech Infrastructure

With the world evolving at every turn, one institution seems left in the dust: the Internal Revenue Service. The IRS is notorious for not addressing its aging technology infrastructure–slow processing, long wait times, and archaic processes.

Why should you care? The IRS’ shortcomings are hurting taxpayers and putting them at risk.

What Does Aging Tech Infrastructure Mean?

When we talk about “aging tech infrastructure,” we’re referring to the outdated systems, networks, and hardware that underpin essential public services. This can include everything from old servers and operating systems to obsolete software and inefficient communication networks used by local governments, schools, healthcare facilities, and other public entities.

Much of this infrastructure was built decades ago, and while it may have been cutting-edge at the time, it’s now increasingly vulnerable to failures, security breaches, and inefficiencies. But instead of upgrading these systems to keep up with today’s demands, many government agencies have been forced to patch up these older systems, creating a situation where the costs continue to rise, and the risks continue to grow.

What’s the Deal with the IRS?

The IRS has been around for a long time–and so have its tech systems. Here are the highlights (or shall we say “low” lights of the current IRS infrastructure:

• Current systems are over 60 years old.
• Recent audits show the agency still does not have a clear plan for modernizing existing systems.
• The closure of the IRS’ Technology Retirement office–responsible for decommissioning legacy systems (systems over 25 years old) has only exacerbated existing issues.

The Costs: Wasting Taxpayer Money

At the heart of the problem lies the cost of maintaining these outdated systems. Beyond just the IRS, governments often spend vast sums of taxpayer money simply to keep old systems running. Here's why:

1. Frequent Repairs and Workarounds: As technology ages, it becomes prone to malfunctions, and keeping it functional requires ongoing repairs and patches. Each time a system fails or becomes inefficient, it costs taxpayers in the form of IT personnel hours, emergency repairs, and temporary fixes. These “Band-Aid” solutions, while necessary, are expensive and unsustainable in the long run.
2. Inefficient Use of Resources: Older systems are often slow and cumbersome. This results in inefficiencies across various public services, from delayed response times for emergency services to longer waits for benefits processing. The slower a system operates, the more people and time it takes to get things done, which means higher operational costs for government entities.
3. Missed Opportunities for Innovation: Outdated technology can prevent governments from adopting more efficient and cost-effective solutions, such as cloud computing, automated systems, and AI-driven analytics. By clinging to old systems, public agencies cannot capitalize on modern innovations that could save taxpayers money in the long run. Essentially, it’s a cycle where money is spent maintaining outdated solutions rather than investing in newer, more efficient technologies.
4. Security and Compliance Failures: Older systems are also more vulnerable to cyberattacks and data breaches, which can be both costly and damaging. Without regular updates, aging tech lacks the necessary security features to protect sensitive information from hackers. The fallout from a data breach, particularly in government-run services like health care, law enforcement, or public housing, could not only cost millions in recovery and litigation but can also erode public trust in vital institutions.

The Risks: Safety, Security, and Reliability

The dangers of relying on aging government tech aren’t just financial—they also put the safety and security of citizens at risk.

1. Public Safety: Imagine a fire department relying on a decades-old dispatch system or a police department depending on outdated software to track criminal activity. These systems must be fast, reliable, and able to handle urgent requests. When technology fails in these high-stakes environments, lives can be lost. An outdated 911 dispatch system, for example, can lead to miscommunication and delayed response times during emergencies, potentially costing lives.
2. Health and Well-being: The healthcare sector, particularly public health programs like Medicare and Medicaid, relies heavily on tech infrastructure to manage patient records, process claims, and allocate resources. A failure in this system—due to obsolete software or hardware—could result in delayed treatments, mishandled medical records, or incorrect billing. Not only does this affect the individuals relying on these services, but it can also lead to expensive legal actions and costly corrective measures.
3. Data Security: One of the most alarming risks of aging tech infrastructure is the potential for data breaches. Government agencies like the IRS store a wealth of sensitive information, from social security numbers to criminal records and health histories. When systems are outdated, they become easier targets for hackers. Recent high-profile cyberattacks, including those targeting local government agencies, demonstrate how vulnerable public sector infrastructure can be. The financial fallout from these attacks—along with the loss of trust—can have long-lasting consequences.
4. Increased Downtime: Older systems are more likely to crash, creating service disruptions. Whether it’s a county’s tax department unable to process payments or a city’s public transportation system going offline, these failures aren’t just inconvenient—they’re costly. And when these systems go down, the impact often falls directly on the taxpayers who fund them.

Why Isn’t Anything Being Done?

Given the clear risks and costs associated with aging government tech infrastructure, it begs the question: why isn’t more being done to address this issue? The answer is multifaceted:

• Lack of Funding: Updating tech infrastructure is expensive, and many local and state governments face budget shortfalls, including the IRS. Politicians may prioritize more immediate, visible needs—like road repairs or police salaries—over investing in long-term technology upgrades.
• Complexity of Upgrades: Transitioning from legacy systems to modern ones can be a daunting task. It requires not only new technology but also retraining staff, migrating data, and ensuring that new systems can integrate with existing workflows. This complexity can delay necessary upgrades, leaving taxpayers at risk.
• Bureaucratic Red Tape: Government procurement processes can be slow and cumbersome. Outdated systems may still work “well enough” for certain agencies, leading to inertia. Overcoming the bureaucracy to modernize these systems is a significant challenge.

A Call to Action: Modernizing Our Infrastructure

Upgrading public sector tech infrastructure should be a top priority for governments at all levels, specifically at the IRS. Here’s what the focus should be on:

• Prioritizing Investment in Technology: Governments must allocate more funding to modernize infrastructure, including hardware and software upgrades. The money spent today on these upgrades could save taxpayers money in the long run by reducing maintenance costs, improving efficiency, and mitigating security risks.
• Adopting a Proactive Maintenance Model: Rather than waiting for a system to fail, governments should adopt a proactive approach to tech infrastructure. Regular audits, scheduled upgrades, and preventative maintenance can help avoid costly breakdowns and downtime.
• Embrace Innovation: Governments should be more willing to explore new technologies, like cloud computing, AI, and machine learning, which can enhance efficiency and reduce long-term costs.
• Cross-Collaboration: Federal, state, and local governments should collaborate to share resources, tools, and best practices for modernizing tech infrastructure. Collaboration can help streamline processes and make upgrades more affordable.

The need for modernization is urgent—not just for the IRS but for many government agencies. Taxpayer security, public safety, and much more are on the line. 

If your business is ready to do its part–reach out to us. We make IT simple–because your business and reputation depend on it.