Head Of Tech Latest To Leave The IRS As Concerns Grow About Cuts And Data Sharing
The Internal Revenue Service (IRS) logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
The chief information officer at the IRS will leave his position at the end of the month. Rajiv Uppal's departure follows several high-profile defections from the tax agency since the beginning of the year.
Uppal was named CIO at the end of December 2023 as part of restructuring at the IRS under former commissioner Danny Werfel. Before joining the IRS, Uppal served as the Director of the Office of Information Technology and Chief Information Officer for the Centers for Medicare and Medicaid Services (CMS), part of the U.S. Department of Health and Human Services (HHS), and brought over 25 years of information technology expertise to the IRS from both the public and private sectors. His portfolio included working with venture capital firms, government entities, and Fortune 500 companies. He holds a master's degree in Systems Science from Louisiana State University and a bachelor's degree from the Indian Institute of Technology.
Uppal's position was created as part of Werfel's plans for a new leadership structure at the agency. As envisioned by Werfel, the organizational structure featured a single Deputy IRS Commissioner instead of two and four new IRS chief positions to oversee taxpayer service, tax compliance, information technology, and operations.
The new organizational structure also included Doug O'Donnell as Deputy IRS Commissioner and Melanie Krause as Chief Operating Officer. Since Werfel's departure, O'Donnell has left the agency. Melanie Krause is slated to leave on April 28, 2025, the same day as Uppal. Krause stepped in as acting commissioner in early March following the retirement announcement of Doug O'Donnell. O'Donnell had served in the role for just a few short weeks following former IRS Commissioner Danny Werfel's departure on January 20, 2025 (one week before the tax season officially kicked off). O'Donnell's departure on February 28 marked a remarkable 39-day span of rotating commissioners. Krause becomes the third commissioner or acting commissioner to leave the agency in less than 80 days.
Uppal's domain included the current IRS information technology division, a key area of focus for the agency. "Our work in the technology arena is critical to our current work on everything from filing season to our phone lines and our online tools," Werfel said at the time. "And we must continue to make foundational improvements in this area to ensure the success of our transformation work and bringing new tools to help taxpayers. Creating this position will be critical to making sure information technology works closely with our business units and our transformation teams to create successes for taxpayers and the tax system, now and in the future."
The IT department at the agency has faced a series of recent challenges, including reduced funding. Republicans in Congress have clawed back roughly half—$40 billion out of the $80 billion—of the Inflation Reduction Act (IRA) funds. The extra money was intended to help the IRS hire 87,000 new workers, including customer service and IT workers, over the next decade. Werfel had previously estimated that, factoring in attrition, the IRS was approaching 90,000 full-time employees—the same as roughly a decade ago and far below staffing numbers in the 1990s.
During the 2025 tax season, around 50 IT executives were placed on administrative leave as part of efforts to reduce the agency's workforce. Thousands more agency employees are expected to receive pink slips in mid-May, about a month after Tax Day, April 15, and it's unclear how many of them will be tech-focused.
IRS technology has been at the center of controversy at the agency since the beginning of the year. In February, Elon Musk's Department of Government Efficiency (DOGE) raised eyebrows when it requested access to sensitive taxpayer data at the IRS. According to various reports, DOGE sought access to the Integrated Data Retrieval System (IDRS). You can think of the IDRS as a master file, which includes tax returns and other taxpayer information, including bank records.
Taxpayers and tax professionals alike have expressed concerns about the safety of IRS data, especially since DOGE would not offer a reason why it needed to access the data. Unfettered access to that data isn't typically granted to anyone—even the IRS Commissioner. In a recent op-ed for Bloomberg Tax, Werfel wrote that if he, as the former IRS commissioner, had requested access to all the data in the IRS systems, "the agency's data security team would rightfully say "no." I would have no compelling need, and there was no legal basis for me to demand it."
The request for access is even more concerning following an NPR report that staff members at the National Labor Relations Board were alarmed about a spike in data leaving the agency following DOGE access to agency systems—data that might have included sensitive information on unions, ongoing legal cases, and corporate secrets. According to NPR, "members of the DOGE team asked that their activities not be logged on the system and then appeared to try to cover their tracks behind them, turning off monitoring tools and manually deleting records of their access — evasive behavior that several cybersecurity experts interviewed by NPR compared to what criminal or state-sponsored hackers might do."
Closer to Tax Day, taxpayers and tax professionals reported mistakes on the IRS website. One such problem? The extension payment date for taxpayers logged into the IRS website was incorrect. While payment should be made by April 15, 2025, taxpayers who logged in to pay see an April 22, 2025, due date. The site says, "Your payment is due on April 22, 2025, regradless of filing for an extension." (Yes, the 'regradless' typo was on the IRS site, too).
Errors appeared in other spots on the website, too, including misidentifying the amended tax form as Form 104X (it's Form 1040X) that was recently "filled" instead of "filed."
Both errors have since been fixed, but other errors remain on the site, including processing updates and problems with the installment agreement option. Additionally, the tab for searching for charities has been removed altogether from the home page—if you're looking to confirm charitable status, you'll have to perform a search to find the page first.
Just before the reports, Elon Musk tweeted on X (formerly Twitter) that the Department of Government Efficiency (DOGE) had made a fix to the IRS website. It's not clear whether the changes and the errors are related or whether DOGE had access to other parts of the IRS website. A request made to the IRS asking for more information, including information about the scope of changes made by DOGE, was not answered.
More recently, the Trump administration plans to eliminate the IRS Direct File program. While Republican lawmakers had previously targeted the program, the free tax software program had been marked as safe for the 2025 season, with now Treasury Secretary Scott Bessent committing to the program during his confirmation hearing. "I will commit that for this tax season … Direct File will be operative," Bessent said. However, less than 48 hours after the end of the regular tax filing season, AP News reported that the program will be axed.
Earlier in the filing season, Musk posted on X (formerly Twitter) that he had "deleted" 18F, the group responsible for creating the technology behind the program. The tweet was in response to a post suggesting that "the far left government wide computer office" was recently taken over by Musk allies. That caused some users on social media to incorrectly report that the program itself had been axed in February (it remained open).
18F was not a group inside the IRS but a team of designers, software engineers, strategists, and product managers within the General Services Administration (GSA). The team collaborated with other agencies to fix technical problems, build products, and improve public services through technology. On March 1, 2025, the group was officially shut down.
The changes—including the data sharing—have directly contributed to a flurry of high-level departures. In addition to Uppal, former commissioners or acting commissioners Werfel, Krause, and O'Donnell have all left or made plans to leave the agency since January. And weeks after O'Donnell departed, acting IRS chief counsel William Paul was removed. Paul was reportedly demoted because he refused to cooperate with Elon Musk's Department of Government Efficiency, as DOGE representatives allegedly sought to share taxpayer information with other federal agencies.
The agency is reportedly taking advantage of the departures to review a number of recent technology initiatives. Details, to date, have been sparse.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
Trump's ‘big beautiful bill' to make wealthy even richer and punish poor
Donald Trump's 'big, beautiful bill' will hand thousands of dollars to the rich and leave poorer Americans worse off, a US spending watchdog has warned. The top 10pc of households will get a windfall of $12,000 (£8,800) per year from the Bill's tax cuts, while the bottom 10pc will see a net loss of $1,600 per year because of benefits cuts, according to analysis by the Congressional Budget Office (CBO). This means the richest people in America will get a cash boost worth 2.3pc of income while the poorest households will see losses worth 3.9pc. Mr Trump's 'One Big, Beautiful Bill Act', as the legislation is known, was narrowly passed by House Republicans last month and is currently under scrutiny by the Senate. The president has set a July 4 deadline for a final version of the Bill. The Bill has come under heavy fire for driving up America's debt burden just as economists are sounding alarm bells over the sustainability of the US debt pile. Earlier this month, Mr Trump's former 'first buddy' Elon Musk slammed the Bill as a 'disgusting abomination' that he said would saddle America with 'crushing' debt. The US lost its last triple-A credit rating in May after a downgrade from influential credit agency Moody's. According to the CBO, the measures outlined in the Bill will add $2.4 trillion to the US deficit over the next decade. The Bill includes tax cuts worth $3.7 trillion over the next 10 years – primarily through extending the income tax cuts Mr Trump introduced in 2017 which are due to expire at the end of this year – alongside $1.3 trillion in spending cuts. The bulk of the spending cuts will come through reductions in Medicaid, which funds health insurance for low-income families, and the Supplemental Nutrition Assistance Program (Snap), which provides food stamps for the poorest in America. This means that although households will technically benefit from the tax cuts, the benefits for the lowest earners will be far-outweighed by the cost of their lost benefits. Around 16m Americans are expected to lose their health insurance as a result of the Bill. In a letter to Democrat lawmakers, who had requested the analysis, Phillip Swagel, the CBO director, said: 'The changes would not be evenly distributed among households. 'The agency estimates that in general, resources would decrease for households toward the bottom of the income distribution, whereas resources would increase for households in the middle and top of the income distribution.' Households in the middle of the income distribution would gain just $500 per year, or 0.5pc of their annual income. Speaking on Thursday, Mr Trump said the Bill was 'one of the most important pieces of legislation ever signed, ever approved, so it's going to be something very special.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
2 hours ago
- Yahoo
A complete guide to SEP IRAs: Why those who are self-employed should take a look
A SEP IRA is a tax-advantaged retirement account that's an especially attractive option for workers who don't have access to an employer-sponsored plan. The annual contribution limits for an SEP IRA are significantly higher than those of traditional and Roth IRAs. A SEP IRA could be an ideal retirement plan if you own your own business and don't hire other employees. About 16.5 million people in the U.S. are self-employed, according to 2023 data from the Bureau of Labor Statistics. For many of these workers, planning for retirement has its own quirks and challenges. They can't rely on a company for a retirement plan, and the modest contribution limit for a traditional or Roth IRA just isn't going to cut it. Rather than run the risk of having a lower standard of living in retirement, self-employed workers do have other savings options to boost the size of their retirement nest egg, including the SEP IRA. With a higher contribution maximum and a lot of flexibility, the SEP IRA might be the retirement plan that best suits many self-employed workers. A SEP IRA, or Simplified Employee Pension Individual Retirement Account, has many features similar to an IRA, but comes with a few extra perks that make it especially desirable for those without an employer-sponsored plan. A SEP IRA is a tax-advantaged retirement plan for anyone who is self-employed, owns a business, employs others, or earns freelance income. SEP IRA contributions are considered employer contributions, so the business makes them to the employee (which may be you). The SEP IRA is designed for simplicity — especially if you own your own business and don't hire other employees. Make tax-deductible (traditional) or after-tax (Roth) retirement contributions as a self-employed person Contribute the lesser of 25 percent of your income or $70,000 in 2025 Easy to open with an account provider Must contribute an equal percentage of compensation for any employees First of all, rather than limiting your annual IRA contributions to $7,000 — the maximum that workers under age 50 can contribute to traditional and Roth plans in 2025 — SEP IRAs allow a company to contribute up to the lesser of 25 percent of your compensation or $70,000 in 2025. For workers who double as their own bosses, this also provides an opportunity to set aside more than they could in an employer's 401(k), which caps 2025 employee contributions at $23,500. The SEP IRA is subject to the same investment, distribution and rollover rules as IRAs, according to the IRS. Traditional SEP IRA: While you can take distributions from your SEP IRA at any time, withdrawals before the age of 59 ½ will be included in your taxable income and may be subject to a 10 percent tax penalty. Additionally, the IRS requires you to take required minimum distributions in the year you turn age 73, as you would with a traditional IRA. Roth SEP IRA: The Roth SEP IRA was created in 2023, as part of the SECURE Act 2.0. You may take out contributions at any point without tax or penalty, since you've already paid tax on the money. But any earnings withdrawn before the age of 59 ½ are subject to a 10 percent tax penalty. There are no required minimum distributions on Roth accounts. You're eligible to contribute to a SEP IRA if you're self-employed — even if you have other retirement accounts. If your business is a side hustle and you still have a regular employer, you can open a separate SEP IRA and contribute, while still socking money away in a 401(k) with that employer. Plus, a SEP IRA is different from an IRA, so you can contribute to both. 'For the self-employed individual, [a SEP IRA is] really an easy and cost-effective way to save a decent-sized chunk of money into a retirement plan,' says Tim Steffen, director of advanced planning at Baird, a financial advisor. Realize, though, that if you end up hiring people, the SEP IRA must treat them the same as you. If you contribute a large percentage of your earnings to a SEP IRA, you'll have to contribute that same percentage of your employees' income to their own retirement accounts. Qualified workers who need to receive the same percentage from your employer contribution as you do include those who: Are at least 21 years old Earn more than $750 annually Have worked in your business three out of the last five years Keep that in mind as you move forward. For some business owners, a SIMPLE IRA might offer a better solution. If you open a SEP IRA at a brokerage, the account allows you to invest in potentially high-return assets such as stocks and stock funds. But you'll also be able to invest in a whole range of securities offered by the brokerage, including bonds, options and more. The contribution limit for a SEP IRA for 2025 is straightforward. Your maximum contribution is the lesser of: 25 percent of the employee's compensation $70,000 Remember, the SEP IRA is an employer contribution (not an employee contribution), so it's made by the company rather than the individual worker. There are no catch-up provisions for older workers in SEP IRAs. The SEP IRA is a popular retirement plan for the self-employed because it offers many useful advantages, but it's not the perfect plan for everyone. Provides a way for you to save for retirement: If you're self-employed, you might not have many options for tax-advantaged retirement savings, and the SEP IRA can help. Tax-deferred or tax-free: You can choose to contribute on pre-tax basis (traditional) or after-tax basis (Roth), meaning your money will not be taxed until withdrawn or it will come out entirely tax-free, depending on which plan type you choose. Easy to set up: A broker offering SEP IRAs can guide you through a few simple steps after you fill out one IRS form. Make bigger contributions: Contribution limits are higher than traditional and Roth IRAs, as well as more than what you can contribute to a 401(k) at a typical employer, though a solo 401(k) may let you save even more. Flexibility: You don't have to contribute every year, whether for yourself or your employees. Employees must be treated the same as you: This is an employer-only contribution. Employees don't make their own contributions and you must contribute the same percentage of employee compensation as you do to your own SEP account. No catch-up contributions: If you're over the age of 50, there are no catch-up contributions like you see with IRAs and 401(k)s. However, the higher contribution limits of a SEP IRA might outweigh this negative. The SEP IRA is a popular retirement account, and those who have the option for a SEP IRA may also be considering a 401(k) or a Roth IRA account. Here are some of the key differences:A SEP IRA is available only if your employer offers it, and in some cases, the employer may be you. If you're a single freelancer, the account allows you to stash as much as 25 percent of your company's earnings in your account tax-deferred, up to an annual maximum of $70,000 in 2025. The account's distribution rules are like those of a traditional IRA or Roth IRA, depending on which type of plan you've selected.A 401(k) is an employer-sponsored retirement plan that lets you save money on a tax-deferred or tax-free basis. Employees can save up to $23,500 in 2025, and employers may add matching funds into the account as well. The account comes in two major varieties: the (pretax) traditional 401(k) or the (after-tax) Roth 401(k). One-person businesses may also open a solo 401(k) and save even more.A Roth IRA allows anyone with earned income (or even spouses of those with earned income) to contribute. Contributions are made with after-tax money, and you'll be able to grow the account tax-free and then withdraw your money tax-free in retirement. Annual contributions are limited to $7,000 in 2025. The good news is that you can contribute to all these plans. However, your maximum contribution to the SEP IRA and the 401(k) together is $70,000 in 2025, including both employer and employee contributions. You can max out your employee contribution in the 401(k) at your day job, taking full advantage of an employer match there, and then still add money to your SEP IRA, until you hit the annual maximum. And regardless of how much you contribute to either a 401(k) or a SEP IRA, you're still able to contribute to a Roth IRA (or a traditional IRA), up to the annual maximum. Setting up a SEP IRA is simple. Start by filling out and filing IRS Form 5305-SEP. Rather than sending the form to the IRS on your own, you can use a broker like Fidelity Investments or Vanguard to sign up and provide the form for you. Compare SEP IRA custodians before making your choice, though. Review minimum investments, fees and investment options offered. Find out how other employees can access their accounts as well, should you choose to add employees. Remember: Your SEP IRA is a type of retirement account, not an actual investment. As with any investment account, how aggressively you invest and the types of assets you buy depends on your age, the age at which you plan to retire and your risk tolerance. Carefully consider your own future needs as you choose investments for your portfolio. In general, asset allocation models suggest that you weight your retirement portfolio toward stocks while you're young and further away from retirement. As you move closer to retirement, many experts suggest reducing the risk level of your portfolio and boosting its income component by rebalancing it to include more bonds. The reason? Stocks historically have generated bigger returns over the long term than fixed income assets, but suffer more price volatility in the short term. Your account provider should have a variety of stocks, ETFs, bonds and mutual funds to choose from. Each of your employees should have their own accounts with the provider so they can choose their own investments and asset allocation. If you're self-employed and looking for a way to contribute to a tax-advantaged retirement plan, a SEP IRA can be a good option. It offers you the chance to contribute a hefty sum each year and have your savings grow tax-deferred or even tax-free. A SEP IRA can be especially useful if you don't have any other employees (and don't plan to hire them in the future).. — Bankrate's Erin Kennedy contributed to an update of this article.
Yahoo
6 hours ago
- Yahoo
‘Dead on arrival' House GOP budget sparks blame game 18 days before deadline
Photo via Getty Images With just 18 days to go until the deadline to pass a budget before the state government shuts down, Arizona lawmakers are finally taking action — but the spending plan put together solely by House Republicans was criticized by opponents as farce that will never actually become law. As with any other legislation, the state budget must be approved by a majority in both the Arizona Senate and House of Representatives — which are both controlled by Republicans — and get a signature from Democratic Gov. Katie Hobbs. The deadline to pass the budget is the end of the state's fiscal year, June 30. Senate Republicans and Hobbs have collaborated on their own budget proposal, which is expected to be introduced June 16. After negotiations between Hobbs and House Republicans broke down a few weeks ago, that chamber's budget leaders decided to craft their own proposal. During a House Appropriations Committee meeting Thursday, committee Chairman David Livingston said that, even though Hobbs, House and Senate Democrats and Senate Republicans were left out of the drafting process, the budget proposal still included some of their requests. 'Some people in this room are very happy,' the Peoria Republican said. 'I have other people in this room that are very disappointed. That's the case. This budget, I think, comes down the middle.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX But during a Thursday morning press conference, Democratic lawmakers fiercely disagreed with that assessment, claiming that the House Republican budget proposal was cobbled together rapidly after the lawmakers who created it skipped out on three weeks of budget negotiations between Hobbs and Senate Republicans. 'Now, in a desperate attempt to become relevant to the budget, House Republicans have introduced this sham, written haphazardly behind closed doors to appease the far-right Freedom Caucus. And, as you would expect, it is awful,' said House Minority Leader Oscar De Los Santos. The proposal, De Los Santos said, is dead-on-arrival and has no chance of getting a signature from Hobbs. And that's assuming it garners the backing of at least 31 of the chamber's 33 Republicans. Livingston agreed that the final budget will look different than the one his committee approved Thursday, saying that he welcomed amendments to it. But Republican Rep. Matt Gress, a former budget director for Gov. Doug Ducey who worked with Livingston to craft the House proposal, repeatedly promised that the majority of their plan would make it into the final product. Livingston said that the top priorities in the budget bills that he sponsored are supporting law enforcement — including a 5% raise for Department of Public Safety and corrections officers — as well funding roads, infrastructure and rural hospitals. While the proposal provides continued funding for the Department of Developmental Disabilities Parents as Paid Caregivers Program, which was at the center of a bitter fight between Hobbs and legislative Republicans this spring, it includes proposals that lawmakers know Hobbs would never agree to. Those include a significant shift in control of federal funds from the governor to the legislature and new restrictions and monitoring requirements on entitlement programs, like the Arizona Health Care Cost Containment System — the state's Medicaid program — and the Supplemental Nutrition Assistance Program, formerly called food stamps. It would also bar Arizona's public universities from providing scholarships to students without legal immigration status, even if the money comes from private donors. 'I mean, this is a hodgepodge of vetoed bills,' De Los Santos said, claiming that the scholarship ban is a 'slap in the face' to the voters that passed Proposition 308. In 2022, Arizona voters approved Proposition 308, which guarantees in-state tuition and access to state-funded financial aid for every Arizona student regardless of citizenship status as long as they attend a high-school in the state for at least two years and graduate. During Thursday's Appropriations Committee meeting, Livingston blamed Hobbs for ending budget negotiations between her office and House Republicans, claiming that she simply stopped sending them counter-proposals. A spokesman for Hobbs told the Arizona Mirror that wasn't true. 'Representative Livingston's comments are out of touch with reality and make clear he is in over his head,' said Christian Slater. 'His sentiment is not shared by the number of stakeholders who spoke today in opposition to his partisan and reckless budget, or Senate Republicans, House Democrats, and Senate Democrats, who are all in active negotiations with the Governor's Office. 'As Senate Republicans themselves have publicly noted, the House Republicans have refused to engage in serious negotiations.' Taking a dig at Republicans in the Senate, Livingston also called the proposal they've negotiated with Hobbs the 'governor's budget.' Senate GOP leaders declined to respond to Livingston's statement. During the Appropriations Committee meeting, representatives from industries, state departments and other causes gave some praise to the budget plan, but mostly criticized it for cutting funding to programs they said were vital to people in need. Livingston asked that any of them who requested more funding for their causes to find an equal amount of money from somewhere else in the budget to cut. None of them had immediate suggestions. Budget documents were first posted online late Wednesday afternoon, and were made up of 15 complicated, multipage bills. The Appropriations Committee meeting began at 10:30 a.m. Thursday. Democrats on the Appropriations Committee complained that the process of voting on the House Republican budget was a waste of time, with a bipartisan budget plan soon to be released by the Senate. 'A vote on this budget is a vote to waste time on distraction,' said Rep. Kevin Volk, a Tucson Democrat. The budget bills ultimately were approved by the Appropriations Committee along party lines. Lawmakers in the House are in for a long day Friday, with plans for amendments to the proposals and a possible vote likely sometime that evening. SUPPORT: YOU MAKE OUR WORK POSSIBLE
