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IRS Spent $12 Million Of Taxpayer Money On Email System, Find Out After It Doesn’t Work

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Eric Lieberman Deputy Editor
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The Internal Revenue Service (IRS) spent $12 million on a new cloud-based email system, but later found out that it was not usable.

The seemingly failed initiative was started in order to comply with the Obama administration’s latest push for increased cybersecurity.

The federal agency’s virtual infrastructure was apparently lackluster, including incapacity to archive emails, which is a critical feature to look up past communications.

“The existing system hardware … is experiencing numerous failures resulting in a significantly increased workload on enterprise e-mail support staff,” reads an audit of the purchase, conducted by the Treasury Inspector General for Tax Administration (TIGTA). “If the IRS does not efficiently upgrade its e-mail environment, it could adversely affect the IRS’s ability to effectively perform tax administration.”

The IRS Information Technology department looked into the enterprise cloud-based email project in order to upgrade the system’s capabilities.

The institution ultimately discovered that the new software was not compatible with the pre-existing software.

The TIGTA faulted executives of the IRS for deciding to purchase the cloud subscriptions without first establishing the Microsoft Initiative Program Office, which would have given the system the infrastructure it needs to support the new upgrade.

“We also believe that the results of the requirements determinations from that process should have been completed prior to the acquisition of the subscriptions,” the audit reads.

The IRS received documentation showing that the new “software subscriptions were not needed in Fiscal Years 2014 and 2015 when purchased because the infrastructure needed to run the software purchased via the subscriptions did not exist and IRS security requirements were not met,” the Office of Audit concludes.

“While the IRS may have acquired the software subscriptions in good faith, it did not follow the IRS IRMs [Internal Revenue Manual], violated the Federal Acquisition Regulation, may have violated the bona fide needs rule, never realized a $21 million savings by purchasing these subscriptions, and wasted $12 million.”

The IRS didn’t combat the analysis of the TIGTA that often, but did “strongly disagree” that it wasted taxpayers money. The tax agency purported that in 2010 it saved the public $127 million due to “an enterprise strategy to reduce the yearly expenditure on MS software and services.”

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