IRS IT overhaul set to finish by 2028, former official says

After decades of attempts, modernization of the IRS’s information technology systems will be completed by 2028, former Acting IRS Commissioner Michael Faulkender said during Thursday’s  AICPA Town Hall webcast.

When asked how close the IRS was to modernization of its computer systems, Faulkender replied:

“I will give you the same line that I gave a number of times when I was acting commissioner. For 35 years, the IRS was five years away from its IT modernization. We will not say that in the 36th year. The plan was to get it done by the end of this term, so by 2028.”

Faulkender, who was deputy Treasury secretary and acting IRS commissioner for several months in 2025, said modernization of the IRS IT systems previously focused on taking millions of lines of computer code in languages like Fortran – developed in the 1950s – and translating them into more modern languages.

But now, artificial intelligence can reprogram the old code, said Faulkender, who also was an assistant Treasury secretary from 2019 to 2021. “So maybe humans don’t know how to program in those languages anymore, but AI does know how to program in those languages, so we actually don’t need to update code that actually works,” he said.

In the past year, the focus of modernization shifted “to get systems to talk to each other, to have an overreaching [application programming interface (API)] where all of the information was simultaneously available.”

Faulkender did not mention the IRS job cuts, which included 2,163 IT staffers, or 25% of that business unit, according to a May 2025 report from the Treasury Inspector General for Tax Administration. In addition, 48 senior IT employees were placed on administrative leave in March 2025 due to reorganization plans, the report said.

In December, the IRS sent a letter to about 1,000 additional IT employees, saying those employees were being reassigned, the Federal News Network reported.

When a tax professional is on the phone with an IRS customer service agent to discuss a client’s tax return, “a significant portion of that time is spent literally reconstructing the tax filing, because that information gets spread across about 18 different systems,” Faulkender said.

A complex tax return would require the IRS customer service agent to delve into separate systems to reconstruct the return, he said, because every time Congress created a new program within the tax code, the IRS would create a new silo that did not talk to existing systems.

A uniform API that reads all the systems allows a customer service agent to reconstruct the filing more quickly, he said. “And what that means is that we’re going to have enormous change in how quickly our customer service agents can access that information, but also in terms of what kind of platforms are going to be available at irs.gov so that there’s more self-service of a number of these questions.”

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.