IRS RESPONSE TO RECOMMENDATION: ​The IRS plans to establish measurable ZPI metrics that assess capacity not just against average receipt volume, but against peaks during filing season, including (i) weekly scanning throughput relative to peak-period inventory and intake to confirm the program can meet surges; (ii) error rates and resulting rework volumes; (iii) end-to-end cycle times for paper-originated returns from receipt through posting; and (iv) refund timeliness, including comparisons between scanned and manually processed returns. The IRS continues to consider this request among all prioritized enhancement and critical maintenance resource needs.

CORRECTIVE ACTION: The IRS plans to establish measurable ZPI metrics that assess capacity not just against average receipt volume, but against peaks during filing season, including (i) weekly scanning throughput relative to peak-period inventory and intake to confirm the program can meet surges; (ii) error rates and resulting rework volumes; (iii) end-to-end cycle times for paper-originated returns from receipt through posting; and (iv) refund timeliness, including comparisons between scanned and manually processed returns. The IRS continues to consider this request among all prioritized enhancement and critical maintenance resource needs.

TAS RESPONSE: TAS appreciates the IRS’s agreement to establish measurable ZPI performance benchmarks. Because ZPI is central to the IRS’s plan to reduce paper processing, improve refund timeliness, and move toward a more digital processing environment, these metrics should be treated as a priority operational safeguard rather than as one enhancement competing with other maintenance needs. Vendor scanning capacity must be measured against filing season surges, not average volume, because paper receipts can spike dramatically during peak periods. Delays translate directly into taxpayer harm, including delayed refunds, prolonged uncertainty, and additional contacts with the IRS.

TAS encourages the IRS to implement these benchmarks before further scaling ZPI or reducing reliance on existing paper-processing capacity. Weekly throughput, error and rework rates, end-to-end cycle times, and refund timeliness comparisons between scanned and manually processed returns will allow the IRS to determine whether ZPI is improving taxpayer outcomes or merely shifting paper-driven delays into a new workflow. Transparent, outcome-based metrics can ensure modernization and transformation produce faster refunds, fewer errors, and more predictable service for taxpayers.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): Ongoing

IRS RESPONSE TO RECOMMENDATION: The IRS shares the National Taxpayer Advocate’s objective of reducing paper processing, improving taxpayer service, and ensuring digitalization efforts are efficient, secure, and cost-effective. As noted in the Annual Report, continued reliance on paper-based processes contributes to delays, errors, and increased taxpayer burden.

The IRS conducted analysis in 2025 to inform its current approach to expedite digital intake and paper processing reduction. This analysis evaluated effectiveness, cost, and risk considerations associated with using external vendors for scanning and digital intake solutions and the implementation of the ZPI. That analysis did not include a full cost comparison of developing and maintaining equivalent in-house capabilities.

The IRS will not conduct a separate study as prescribed in this recommendation but will continue to evaluate performance, cost, and risk through established program governance, contract oversight, and operational monitoring processes. This approach allows the IRS to make informed adjustments while maintaining continuity of current digitalization efforts.

CORRECTIVE ACTION: ​The IRS conducted analysis in 2025 to inform its current approach to expedite digital intake and paper processing reduction. This analysis evaluated effectiveness, cost, and risk considerations associated with using external vendors for scanning and digital intake solutions and the implementation of the ZPI. That analysis did not include a full cost comparison of developing and maintaining equivalent in-house capabilities.

The IRS will not conduct a separate study as prescribed in this recommendation but will continue to evaluate performance, cost, and risk through established program governance, contract oversight, and operational monitoring processes. This approach allows the IRS to make informed adjustments while maintaining continuity of current digitalization efforts.

TAS RESPONSE: Although the IRS conducted a 2025 analysis of external vendor scanning and ZPI implementation, the analysis did not include a full comparison of the long-term costs of external vendors with the costs of developing and maintaining equivalent in-house digital intake capacity. That comparison is the central purpose of the recommendation. TAS does not view ongoing program governance, contract oversight, and operational monitoring as substitutes for a comprehensive make-or-buy analysis. Those tools may help the IRS manage the model it has chosen, but they do not answer whether that model is the most cost-effective, resilient, secure, and taxpayer-protective approach over time. Given the sensitivity of return and correspondence data, the operational consequences if vendors cannot process peak volumes, and the taxpayer harm caused by delayed refunds and unresolved accounts, TAS continues to recommend that the IRS conduct a full cost and risk analysis comparing vendor-based scanning with in-house digital intake capacity staffed by IRS employees. That analysis should include total lifecycle costs, data security, operational resilience, taxpayer rights risks, and lessons learned from prior outsourcing of core tax administration functions.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Close

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: The IRS currently maintains and will continue to maintain a dual-track work model until ZPI vendors and internal scanning systems consistently demonstrate the ability to handle peak filing season volumes, dependent on approved budget. Additionally, there are no plans for further staff reductions in Submission Processing beyond regular attrition.

CORRECTIVE ACTION: The IRS currently maintains and will continue to maintain a dual-track work model until ZPI vendors and internal scanning systems consistently demonstrate the ability to handle peak filing season volumes, dependent on approved budget. Additionally, there are no plans for further staff reductions in Submission Processing beyond regular attrition.

TAS RESPONSE: The IRS’s commitment to maintain a dual-track work model until ZPI vendors and internal scanning systems consistently demonstrate peak-volume capacity directly addresses TAS’s recommendation. Maintaining internal Submission Processing capability during the transition is essential because paper-processing failures create internal backlogs and delay refunds. They also prolong account uncertainty, increase taxpayer contacts, and may force taxpayers to resubmit documents or wait months for resolution.

TAS also supports the IRS’s statement that it has no plans for further Submission Processing staff reductions beyond regular attrition. At the same time, attrition can reduce operational readiness if staffing falls below the level needed to handle filing season surges or vendor shortfalls. TAS encourages the IRS to monitor the effect of attrition and budget constraints on peak-season capacity and to preserve sufficient trained staff until objective ZPI performance data demonstrates that scanned intake can be processed timely and accurately at scale.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: At the discretion of the Contracting Officer (CO), where applicable, the IRS will use enhanced debriefings to include (i) release of redacted source selection decision documents and (ii) limited post-debrief Questions and Answers (Q&As). The IRS’s adoption of the enhanced debriefings will be in accordance with the Revolutionary Federal Acquisition Regulation Overhaul (RFO), which is used to empower COs to use their discretion in allowing for determination of how and when to apply rules, regulations, and policies on a specific contract (RFO section 1.102(a)(7)). A policy communication will be issued to encourage and highlight, where applicable, that releasing the source selection decision document is an option for stakeholders to include as part of the enhanced debriefing process.

The Office of the Chief Procurement Officer (OCPO) Policy will also provide training on the RFO that encourages and highlights limited post-debrief Q&A’s and will provide requirement language for COs to use in soliciations at their discretion. Additionally, the OCPO will continue to follow the RFO along with the Treasury Debriefing and Explanation Guide for vendor interactions.

CORRECTIVE ACTION: At the discretion of the Contracting Officer (CO), where applicable, the IRS will use enhanced debriefings to include (i) release of redacted source selection decision documents and (ii) limited post-debrief Questions and Answers (Q&As). A policy communication will be issued to encourage and highlight, where applicable, that releasing the source selection decision document is an option for stakeholders to include as part of the enhanced debriefing process.

The Office of the Chief Procurement Officer (OCPO) Policy will also provide training on the RFO that encourages and highlights limited post-debrief Q&A’s and will provide requirement language for COs to use in soliciations at their discretion. Additionally, the OCPO will continue to follow the RFO along with the Treasury Debriefing and Explanation Guide for vendor interactions.

TAS RESPONSE: The IRS’s planned policy communication and training on enhanced debriefings represent some progress. Releasing redacted source selection decision documents and allowing limited post-debrief questions and answers can improve transparency, help vendors understand award decisions, and reduce protests based on uncertainty or incomplete information. These measures are particularly important for modernization and digitalization procurements, where procurement delays can directly become taxpayer service delays.

But TAS’s concern is consistency. The IRS’s response leaves enhanced debriefings largely to the discretion of the contracting officer and frames them as an option rather than the standard practice for major modernization procurements. TAS continues to recommend that the IRS make enhanced debriefings the default for major IRS modernization and digitalization contracts, subject to appropriate redactions and documented exceptions where an enhanced debriefing is not appropriate. A predictable debriefing practice would better support competition, improve vendor confidence in the process, and reduce avoidable procurement friction.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 10/01/2026

IRS RESPONSE TO RECOMMENDATION: ​​

In accordance with the request to track protests, the IRS currently maintains information on acquisition protests. This information is stored on protest logs that are categorized by the government’s fiscal years and shared with the appropriate stakeholders. The information below explains protests fields that have been recorded in the IRS Quality Assurance (QA) team’s protest logs. Consistent registration of protests by staff will strengthen reliable analytics, help identify trends, and create actionable lessons learned that may reduce rework and improve procurement timelines moving forward.

1. Procurement identifiers:

• Solicitation or Contract Number
• Brief description of the requirement
• Solicitation Point of Entry (e.g., SAM, GSA, NASA SEWP, Internal IDIQ/BPA, etc.)

2. Protester Information:

• Protestor
• Forum (GAO or agency-level)
• Date filed
• Protest issue narrative (reason/grounds)
• Legal Counsel Name
• Recorded disposition (e.g., denied, dismissed, withdrawn) when available
• Corrective action narrative (what the agency elected to do) as applicable

3. Governance and Impact Data:

• Estimated contract value
• Date SPE/CPO Notified of Receipt
• Date SPE/CPO Notified of Disposition
• Major acquisition (Yes/No)
• GAO Case number
• Contracting officer/contact info
• Assigned GSL Attorney
• Current Status (Open/Complete/Closed)

Moving forward, OCPO will establish lesson learned notes that summarize key findings from protests. OCPO will also provide information from the protest logs and lessons learned to operations leadership with the goal of refining solicitation design, evaluation practices, and procurement timelines for modernization initiatives.

CORRECTIVE ACTION: OCPO will establish lesson learned notes that summarize key findings from protests. OCPO will also provide information from the protest logs and lessons learned to operations leadership with the goal of refining solicitation design, evaluation practices, and procurement timelines for modernization initiatives.

TAS RESPONSE: The IRS’s existing logs provide a strong foundation for the acquisition protest analytics and lessons-learned program TAS recommends. The data fields identified in the IRS response (including procurement identifiers, protester information, protest forum, protest grounds, disposition, corrective action, estimated contract value, and major acquisition status) should allow the agency to identify recurring issues and improve future procurements if the information is captured consistently and analyzed systematically.

To fully implement the recommendation by September 30, 2026, the IRS should ensure the program goes beyond recordkeeping. The value of protest analytics lies in using the information to identify preventable errors, recurring friction points, time-to-award impacts, repeat protest patterns, and corrective actions that could have been avoided through clearer solicitations, better evaluation documentation, or earlier legal and quality assurance review. TAS supports the IRS’s commitment to provide protest log information and lessons learned to operations leadership and encourages the IRS to use this information to refine modernization procurement timelines and reduce delays that ultimately affect taxpayers.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 09/30/2026

IRS RESPONSE TO RECOMMENDATION: ​​The IRS does not agree to implement the TAS recommendation.

The IRS currently has quality assurance practices and controls implemented within the pre-award acquisition process that help mitigate protest risk and strengthen procurement integrity. These practices and controls include the following which cover the scope of this recommendation:

Solicitation Package Review – QA conducts structured reviews of solicitation packages to promote clarity, consistency, and compliance including:

• Verification of required Federal Acquisition Regulation (FAR) clauses, department clauses, and regulations;
• Review of Statement of Work (SOW) / Performance Work Statement (PWS) / Statement of Objectives (SOO) to clarify and align with acquisition strategy;
• Confirmation of clear and consistent proposal instructions;
• Review of Source Selection Plan (SSP) and Technical Evaluation Plan (TEP) for alignment of solicitation criteria; and
• Review of supporting acquisition documentation (i.e., market research).

Evaluation Documentation Review:

• Alignment of evaluation findings with solicitation criteria;
• Support for strengths, weaknesses and ratings with proposal citations;
• Verification of traceability between evaluation factors and conclusions; and
• Review of award decision memorandum for defensible tradeoff rationale and technical acceptability.

Additionally, QA maintains ongoing dialogue with IRS General Legal Services (GLS) to remain informed of evolving protest risks and legal interpretations affecting source selection documentation. GLS maintains responsibility for assessing protest risk associated with source selection documents with QA focused on compliance. QA uses protest log data to identify recurring themes and corrective action patterns and incorporates lessons learned into internal review checklists and guidance.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS response identifies several quality assurance practices that are materially related to TAS’s recommendation. Reviews of solicitation packages, SOWs, PWSs, SOOs, source selection plans, technical evaluation plans, evaluation documentation, award decision memoranda, and coordination with General Legal Services all help strengthen procurement integrity and reduce protest risk. TAS recognizes these existing controls and views them as partially responsive to the recommendation.

The remaining gap is not the absence of review activity but rather the lack of a formal, risk-focused pre-award review process for major modernization acquisitions. TAS recommends a specific safeguard for high-impact procurements. For example, before award, the IRS should confirm that solicitation requirements are unambiguous, evaluation criteria were applied as written, and the award decision is fully documented and defensible. General compliance checks and post hoc use of protest data do not fully substitute for a structured pre-award protest-risk review with defined triggers, scope, documentation, and accountability. TAS continues to recommend that the IRS formalize such a process by September 30, 2026, building on the review controls and legal coordination the IRS already has in place.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: In addition to the IRS response implementation efforts described in Recommendations 2-4, 2-5, and 2-6, which would be applicable to this recommendation as well, the IRS will continue to leverage Chief Counsel assistance when appropriate. The IRS follows the Treasury Debriefing and Explanation Guide, which provides that regardless of the method of debriefing (but especially if the debriefing is written), the COs should ensure that their assigned Legal Counsel has been consulted, and the contract file documented accordingly. This Guide also recommends consulting legal counsel as part of the debriefing preparation, which the IRS routinely follows as part of its standard procedures. Furthermore, the IRS acquisition policies require the COs to request and ensure legal counsel is present at a debriefing when a contractor’s legal counsel will be in attendance.

As part of addressing this recommendation, the IRS agrees to use performance-based, phased contracts, where possible, to validate vendor capability before scaling.

Additionally, OCPO will issue policy communication to stakeholders on continuing to leverage Chief Counsel assistance and will provide training on using performance based, phased contracts.

CORRECTIVE ACTION: As part of addressing this recommendation, the IRS agrees to use performance-based, phased contracts, where possible, to validate vendor capability before scaling.

Additionally, OCPO will issue policy communication to stakeholders on continuing to leverage Chief Counsel assistance and will provide training on using performance based, phased contracts.

TAS RESPONSE: The IRS has agreed to several concrete actions that would improve modernization and transformation procurements, including continued use of Chief Counsel assistance when appropriate, policy communications and training, and use of performance-based, phased contracts where possible to validate vendor capability before scaling. These are meaningful steps. Phased, performance-based contracting is particularly important for projects like ZPI, where the IRS must confirm that vendors can perform accurately and timely at filing season scale before relying on them for core processing functions.

However, this recommendation remains only partially addressed because several of the recommended safeguards are still discretionary or incomplete. Enhanced post-award debriefings are not yet the default for major modernization procurements; the protest analytics program must still be formalized and used to drive lessons learned, and the IRS has not committed to a structured pre-award protest-risk review for major modernization acquisitions. TAS continues to recommend that the IRS adopt these practices as routine controls for major modernization procurements, with documented exceptions where appropriate. These improvements are within the IRS’s control and need not await broader FAR reform. Implemented together, they would reduce avoidable protests and corrective actions, improve vendor accountability, validate capability before full-scale deployment, and protect taxpayers from modernization delays that result in slower refunds, unresolved correspondence, and prolonged account uncertainty.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 10/01/2026