Is our tax money being squandered on billion-dollar technology contracts to foreign workers while American tech professionals are sidelined? The staggering amount of waste from within the IRS is slowly being revealed for the country to see, with 80% of the agency’s budget spent on…nonsense.
At a glance:
• The IRS spends a shocking 80% of its technology budget on contractors with minimal results
• Despite processing data comparable to a mid-sized bank, the IRS maintains an inflated budget and workforce
• Many contractors employ cheaper H-1B visa workers instead of qualified American professionals
• Treasury Secretary Scott Bessent likened private contractors to “pythons” constricting government resources
• New leadership is working to cut $1.5 billion from modernization efforts and reduce contractor dependence
Wasteful Spending and Foreign Worker Dependency
A bombshell report from a consultant hired by the Department of Government Efficiency (DOGE) has revealed that the IRS is hemorrhaging billions on technology contractors with minimal return on investment. The agency processes data comparable to a mid-sized bank but operates with a substantially larger budget and workforce, raising serious questions about fiscal responsibility.
Approximately 80% of the IRS technology budget goes directly to contractors and software licenses with almost no oversight or accountability. This arrangement has created a system where taxpayer dollars flow freely to private companies while efficiency and innovation stagnate.
Treasury Secretary Scott Bessent didn’t mince words when describing the situation, comparing private-sector contractors to predatory snakes. “They’re like a boa constrictor, they’re like a Python… They constricted themselves around our government, and the costs are unbelievable that are being passed on to the taxpayer,” Bessent stated.
That’s one way of putting it!
H-1B Visa Exploitation Undermining American Workers
Perhaps most concerning is the revelation that many contractors rely heavily on imported H-1B workers who are paid significantly less than their American counterparts. These foreign workers are unlikely to report inefficiencies or corruption due to their precarious visa status, creating a perfect environment for waste and abuse.
“It’s hard to really grasp the scale of this,” said Sam Corcas, the DOGE consultant who uncovered these issues. The practice known as “featherbedding” allows contractors to maximize profits while minimizing productivity, all at taxpayer expense.
If Social Security was privatized and the same amount was invested in a Dow Jones Indexed Fund twenty Years Ago would the Private Fund be better for the recipents?
To answer this, let’s consider what would happen if Social Security contributions had been privatized and invested…— #ColdWaterPatriot (@jr_pettaman) February 24, 2025
Trump Administration Taking Action
The IRS technology modernization system, originally due for completion in 1996 but started in 1990, exemplifies the agency’s chronic inability to complete critical projects. Decades of delays have resulted in outdated systems that struggle to handle modern tax processing requirements, despite billions spent on so-called upgrades. It was all for…what?
New leadership at the IRS is finally taking decisive action to address these longstanding issues. Approximately $1.5 billion has been cut from the modernization budget, with a renewed focus on reducing complexity and empowering in-house civil service technology experts instead of relying on costly contractors.
The ultimate goal of these reform efforts is to dramatically improve government efficiency and tackle the massive national debt that has ballooned under previous administrations. By reducing contractor dependency and rebuilding internal technological capabilities, the IRS aims to better serve American taxpayers while safeguarding their financial contributions from waste and abuse.
