The Internal Revenue Service (IRS) is charged with enforcing the U.S. tax code and has historically fulfilled this charge efficiently. The IRS is among the most cost-effective government agencies, costing just 33 cents for each $100 it collects (Internal Revenue Service (IRS) 2021a). The effectiveness of the agency is associated with factors like a relatively high voluntary compliance rate and the use of technology to improve audits and enhance taxpayer service. Technology-supported audits have dual roles; they increase perceived detection, which deters noncompliance, and they increase actual detection, which identifies noncompliers; both roles help to improve revenue collection. Technology-supported taxpayer service increases the cost-efficiency of the agency and taxpayer satisfaction. This study provides a historical overview of the computerization of the IRS, noting obstacles, like budget constraints, politicization of the agency, historically short leadership tenure, risks associated with private-sector contracts, and taxpayer privacy concerns.

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