Accenture Wins Spot on $2.6 Billion Agreement To Modernize IRS Systems

Diccon Hyatt is an experienced financial and economics reporter who has covered the pandemic-era economy in hundreds of stories over the past two years. He's written hundreds of stories breaking down complex financial topics in plainspoken language, emphasizing the impact that economic currents would have on individuals' finances and the market. He's also worked at The Balance, U.S. 1, Community News Service and the Middletown Transcript.

Accenture Federal Services has won a spot on a seven-year purchase agreement worth up to $2.6 billion in contracts to modernize IRS systems.

The agreement covers 400 IRS systems, the company said Wednesday in a statement. Accenture will help the IRS develop “new ways for taxpayers and tax professionals to interact with the agency,” the company said. The unit of Ireland-based services and consulting company Accenture (ACN) won’t have the business all to itself—it will still have to compete for contracts with rival services firm Maximus, which said last week that it had also been given a position on the “blanket purchase agreement.”

Among IRS modernization efforts already underway is a proposal to create a free online tax filing tool as an alternative to tax preparation vendors like TurboTax and H&R Block. The IRS plans to launch a pilot program next year.

The new filing system is one of the reforms mandated by the Inflation Reduction Act of 2022, which gave the agency $80 billion over 10 years to modernize systems, improve customer service, and enforce the tax code.

Reforms will result in “faster processing of returns and quicker distributions of the credits and benefits that are vital to so many Americans,” Jessica Powell, a managing director in Accenture Federal Services and IRS client lead said in a written statement.

The IRS’s computer systems are long overdue for upgrades, according to a February report by the Government Accountability Office, the government’s in-house watchdog. As of last August, the IRS was still using outdated computer applications, software, and hardware that was up to 64 years old, increasing costs and creating security vulnerabilities.