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By David Lawder
WASHINGTON (Reuters) - The tech startup executive charged by the Trump administration with reviewing the Internal Revenue Service's technology modernization program said on Thursday that he has canceled contracts worth about $1.5 billion from the tax agency's budget.
Sam Corcos, founder and CEO of health technology firm Levels, and a member of President Donald Trump's informal Department of Government Efficiency, told Fox News Channel that he has found legacy contracts with outside technology consultants worth tens of billions of dollars for a systems modernization effort that is decades behind schedule.
"I think we've so far stopped work and cut about $1.5 billion from the modernization budget, mostly projects that were putting us down this death spiral of complexity in our code base," said Corcos, who serves as a special adviser to the Treasury.
That's from an annual modernization budget of about $3.7 billion, which is in addition to a $3.5 billion information technology systems budget, he said.
The true size and legality of many DOGE-related cuts in government spending have been challenged in court.
The IRS last week said it was pausing technology modernization investments to reevaluate its operating approach in light of new artificial intelligence technologies.
The pause marks another shift away from the original $80 billion in IRS investment funding over a decade that was included in former president Joe Biden's 2022 Inflation Reduction Act.
The modernization effort was aimed making up for a decade of under-funding to revamp outdated 1960s-era computer architecture, improving taxpayer services and boosting the IRS' capability to increase tax collections through more sophisticated audits of the ultra-wealthy and business owners.
Clawing back the supplemental funding has long been a target of Republicans in Congress, who argued that it was aimed at harassing taxpayers. Subsequent stopgap government funding measures have whittled the original $80 billion down by as much as half.
Corcos praised the dedication of the IRS' 8,000 career information technology employees, saying that they have been "super cooperative" with the cost review. But he said that the agency's IT costs are far above those of private-sector banks processing similar amounts of data.
(Reporting by David Lawder)
