IRS Spent $4.4 Billion on IT

IRS Commissioner: Agency lacked funds to save emails

John Koskinen
IRS Commissioner John Koskinen / AP
June 26, 2014

The IRS under the Obama Administration has spent over $4 billion on contracts labeled under information technology and software despite IRS Commissioner John Koskinen testifying this week that budgetary restraints prevented the agency from spending $10 million to save and store emails.

Koskinen said "declining budget resources" at the IRS caused the agency decided to reject spending the $10 million needed to ensure emails were properly secured.

A review of IRS spending by the Free Beacon shows the agency has spent a massive amount on what it labeled as IT/software and data processing contracts in the past five fiscal years. The official government’s spending website shows the IRS spent $4.4 billion during this time period.

A total of 12,543 contracts were awarded under this product code.

Records show the IRS under President George Bush spent a total of $5.3 billion in eight years for the same contractive services. If the IRS spending trends continue as they have thus far, the IRS under Obama is on track to far exceed what was spent during the Bush presidency.

Koskinen also said "continuing financial constraints have meant that this fiscal year, the IRS is spending minimal amounts supporting its $1 billion IT infrastructure." Records show the agency has already spent $642 million on IT contracts this fiscal year.

The IRS commissioner said Lois Lerner’s emails could not be retrieved due to a hard drive crash. However, records show his agency has spent tens of millions of dollars in contracts with at least two companies for information retrieval systems and a forensics program touted as securing and maintaining the integrity of data.

The IRS contracted with Unisys Corporation for $11.8 million, which included $4 million for "critical operation and maintenance of the files informational retrieval system" and $4.9 million for what the contract describes as "critical-exercise files information retrieval system (Exfirs) Operations and Maintenance."

The agency also awarded a total contract worth $5.9 million to Immixtechnology Inc. in 2010 for what was described as an "encase enterprise forensics suite."

The company website says the "EnCase® platform provides the foundation for government, corporate and law enforcement organizations to conduct thorough and effective computer investigations of any kind, such as intellectual property theft, incident response, compliance auditing and responding to eDiscovery requests—all while maintaining the forensic integrity of the data."

The Free Beacon found other government agencies, including the Federal Bureau of Investigation, have hired Immixtechnology for its expertise.

Records show several IT contracts awarded run in the tens of millions of dollars. They include a $47 million contract for an IBM ESSO order that was signed in December 2013 and a $44 million contract for what was described as "critical functions/IBM software subscription." Another contract for $27.6 million was awarded for IT/telecom, and still another contract awarded for IT for $58.5 million.

The IRS also contracted with Chicago-based Softchoice Corporation for ADP software; that  contract amounted to $108 million. Records show the contract was signed in March of 2010 and completed in December 2012—the time frame during which Lerner’s emails were lost.

Softchoice is a leader in electronic storage. This year the company was named as "Top US Storage Growth Partner of the Year."

The IRS explains on its website requirements for taxpayers to maintain records, including electronic records—which includes "databases, saved files, email, instant messages, faxes, and voice messages."

"It's important to note that the same timeframes that apply for keeping paper records apply to electronic records. Generally, that's until the statute of limitations for the tax return the records relate to has expired. It's normally three years from the due date of the return, or the date the return was filed—whichever is later," the IRS states.