The IRS spent $12 million on an unusable email system, according to a report by the Treasury Inspector General for Tax Administration (TIGTA). The agency purchased two years’ worth of email software subscriptions before finding out the system was not unusable. 

The IRS was required to procure new software because of a 2014 Office of Management and Budget directive that required federal agencies to manage permanent and temporary email records starting December 2016.

As the report notes, the IRS failed to perform the required and necessary cost analysis, security assessments, and requirements analysis prior to purchasing the software. As the report notes:

“The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise.”

As a result, the software was never used despite $12 million in taxpayer funds being spent acquiring two years’ worth of licenses. In addition, the IRS failed to ensure the contract was awarded with full and open competition as required by federal law. As the report notes:

“The IRS violated the Federal Acquisition Regulation requirements by not using full and open competition in its acquisition of Microsoft Office 365 ProPlus and Exchange Online monthly subscriptions.”

This is not the only time the IRS has struggled with technology. A TIGTA report released last year found that the IRS failed to upgrade Windows software on its computers and servers by end of life deadlines, despite being expected to spend almost $140 million in taxpayer funds. At the time of the report, the agency had spent nearly four years upgrading this technology, but had only upgraded half of its servers.