Cloud Exchange: IRS eyes cloud migration as an opportunity to retire legacy IT systems

The IRS, through its Enterprise Digitalization and Case Management Office, is accelerating its migration to the cloud, in order to wean the agency off manual, paper-based workloads.

EDCMO Co-Director Justin Abold-Labreche said the IRS is adopting a “cloud-first” strategy, and that enterprise case management is one of the largest cloud initiatives happening at the agency.

By modernizing business processes and migrating them to the cloud, the IRS is reducing its legacy on-premise IT footprint.

The IRS stood up the EDCMO to lead the agency’s migration of business processes from legacy systems onto a cloud-based enterprise case management system developed by Pegasystems.

The IRS has more than 60 legacy case management systems, designed at different times throughout the past 20 to 30 years.

“They don’t talk together effectively, so it’s hard for the taxpayer’s journey to flow through our systems in a way that our employees can easily see that and support the taxpayer,” Abold-Labreche said on Federal News Network’s Cloud Exchange.

The IRS is prioritizing what to migrate to the ECM platform in part by determining opportunities for the agency to decommission or retire legacy systems.

“We have a team of people that are actually focused on that decommissioning piece to say, ‘OK, what are the legacy systems out there on case management? What’s more expensive? What’s less expensive? What’s older? What’s younger? What’s written in code that is hard to get maintenance for? Where do we have real, immediate needs for new functionality that we’d have to make that trade-off between investing in old systems or migrating that faster into enterprise case management?  And then, what will it take to actually retire that, because that legacy environment is complicated. It’s tied together in ways that made sense at the time or were a product of having to deliver a service under tight funding conditions. And so we’ve got to disentangle that … What we want as our endgame is to retire as many of those 60-plus systems as we can,” Abold-Labreche said.

The IRS had its first business processes partially go live on the ECM platform last September, and later in 2020 migrated business processes from the agency’s Tax Exempt and Government Entities division to the enterprise case management system.

Prior to moving these processes to the cloud, Abold-Labreche said TE/GE’s correspondence processes were entirely manual, and that tax-exempt organizations that needed to reach out to the IRS could only do so through mail or fax.

“If you write to us, it’s scanned in now, and the cases are created systemically … so there’s no filing cabinet. We can actually route the work with all the attachments that employees need in the system. They can do some of the research that they used to have to go to multiple systems [for]. Some of that research they can do right from ECM,” Abold-Labreche said.

More recently, the IRS has migrated workloads from its Wage and Investment division that support two of the agency’s grant programs — the Volunteer Income Tax Assistance Program and the agency’s tax counseling program for the elderly.

“We’ve been able to take both programs, put them into enterprise case management, deliver a simplified case management and routing work assignment within ECM to be able to speed up the ability for us to service these grant applications and ensure accuracy, and good return on investment,” Abold-Labreche said.

The IRS, as part of this modernization effort, will soon enable individuals to submit 3949-A information referrals through its website, in order to report suspected tax law violations by a person or a business.

“Right now, you use the 3949-A information referral, and you have to type it out, write it by hand, mail it to one of our campuses. They open it up, they look at it, and they say ‘Hey, this looks like it’s related to a small business, so let’s send it to our Small Business/Self Employed division.’ They package it back up, mail it out there, somebody in the SB/SE field office opens it up and says, ‘I can see why they would say this is about a small business, but it’s really about an estate, and it’s more related to another part of the IRS’ … We’re going to move away from all of that. Thanks to the great IT organization we have, we will go live on IRS.gov with a digital upload opportunity, so if you have a suspicion that someone is engaging in tax wrongdoing and avoiding their tax responsibilities, you can fill that 3949-A out through a guided digital upload tool.”

Through this digital system, Abold-Labreche said taxpayers don’t have to worry whether the IRS received its information referral in the mail. But the IRS will still accept mailed and faxed referrals.

“In the near-term, we’re still preserving a paper channel, because many people do have access to the internet, but some people don’t, and we don’t want to take away a channel that is important for them,” Abold-Labreche said. “But we really encourage people to take advantage of that digital channel, because it is the most cost-effective way and the fastest way to get that possible report of wrongdoing to someone who can act on it,” he said.

The IRS is adopting an agile approach to cloud migration and is focused on program increment delivery every 12 or 13 weeks, broken up into two-week iterations. Abold-Labreche said his office is working on early-stage projects with both the agency’s Criminal Investigation division and its Independent Office of Appeals.

Abold-Labreche said his office is also looking at what it can accomplish in 12 months that meet the goals of the Taxpayer First Act, which sets goals for the agency to improve taxpayer service.

The EDCMO is just one aspect of a larger, multi-year integrated modernization business plan to overhaul the IRS’ IT systems.

Abold-Labreche said the IRS’ IT services act as the “backbone of the organization, and allowed the agency to support up to 61,000 employees teleworking during the COVID-19 pandemic

“We collectively as the IRS, relying on that IT support, have really stepped forward to be able to continue to operate and deliver services in this challenging period,” Abold-Labreche said.

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