Democratic lawmakers pressed Frank Bisignano on the IRS-ICE data-sharing agreement. The CEO said the tax agency is prioritizing risk management and touted its AI work.
By Matt Bracken, FEDSCOOP
The IRS is undergoing a “thorough” cybersecurity review following reports of improperly disclosed taxpayer information, the agency’s CEO told lawmakers Wednesday — a revelation that some Democrats said skirted the actual privacy issues at hand.
Appearing before the House Ways & Means Committee, Frank Bisignano said he’s prioritized risk management since taking over as IRS CEO in October. Rep. Richard Neal, D-Mass., ranking member of the panel, had asked the Wall Street veteran and former fintech CEO what the IRS was doing to respond to the “numerous allegations that confidential taxpayer information has been leaked” since the beginning of the second Trump administration.
“We have a weekly risk management meeting to go through all the issues, inclusive of that [is] cyber,” Bisignano replied. “Risk management is a primary job. It allows for preparedness. A thorough review of all cyber is undergoing right now, and we are also … having outside reviews.”
Neal didn’t explicitly state which privacy issues he was referring to, but there have been several involving the IRS and taxpayer data: ongoing litigation involving the tax agency’s data-sharing agreement with Immigration and Customs Enforcement, the accessing of PII by the so-called Department of Government Efficiency, and the 2019 contractor leaks of the tax returns of President Donald Trump, Jeff Bezos and other wealthy individuals.
Bisignano, who continues to pull double-duty as head of the Social Security Administration, has touted his private-sector privacy bonafides in previous appearances before Congress. But Rep. Suzan DelBene, D-Wash., said she was “deeply concerned” that the former Fiserv CEO doesn’t “take the responsibility to protect Americans’ … sensitive information seriously.”
DelBene pointed specifically to the IRS-ICE pact and a federal judge’s opinion last week that the tax agency broke federal law “approximately 42,695 times” when it shared taxpayer addresses with the Department of Homeland Security component via an improper matching process.
“You told ranking member Neal earlier today that you have implemented a risk management function that includes risk management meetings that discuss cyber policy. Unfortunately, this issue wasn’t caused by cyberattack,” DelBene said. “It was caused by your department illegally handing over taxpayer information to the Department of Homeland Security.”
Bisignano noted that those events occurred prior to his appointment to the IRS, but it’s still his “responsibility to get it right.” He declined to comment further, citing pending litigation on the matter, but pointed again to the agency’s embrace of risk management and its goals in “protecting Americans’ privacy, increasing collections and driving higher service.”
Earlier in the hearing, Bisignano told Rep. Mike Thompson, D-Calif., that nobody at the IRS had been dismissed or disciplined over the ICE data disclosures — which the IRS’s chief risk and control officer admitted in a court filing was done improperly.
Modernization, AI and filing season
Less contentious exchanges during Wednesday’s three-and-a-half-hour hearing centered on the IRS’s modernization and AI efforts under Bisignano. Several Republicans praised the CEO for making progress on digitization efforts and decommissioning legacy systems during his time on the job.
Bisignano said the agency has seen a 43% uptick in “online usage” — a statistic he largely attributed to the “fabulous CIO who reports to me, who had been three levels down in this organization and promoted up, and is doing an outstanding job.” He praised agency work on its “Where’s my refund?” page, claimed the public is getting “quicker refunds and bigger refunds,” and re-framed how he views modernization.
“We’re not modernizing the IRS. It’s not a word I use,” he said. “We’re transforming the IRS, and we can only do it through advanced technology, and that will increase compliance and increase simplification, and you should expect [the 2027 filing season] to be far better than ‘26, and ‘26 is far better than ‘25 and ‘24 — by a boat load.”
Some Democrats during the hearing expressed skepticism about how the IRS would be able get through the filing season unscathed in the aftermath of a 19% workforce reduction. The IRS late last year moved about 1,000 staffers from the agency’s Office of the Chief Information Officer to the Office of the Chief Operations Officer.
FedScoop reported last month that IT employees with no direct tax experience were involuntarily shifted to customer service and analysis roles for this filing season. The IRS has lost 16% of its IT workforce since Trump took office, per the Treasury Department watchdog, leading to an inventory backlog and project delays.
Treasury Secretary Scott Bessent previously said the IRS would make up for staff cuts with an “AI boom,” and several lawmakers Wednesday questioned how the emerging technology fits into the equation. Rep. Greg Murphy, R-N.C., asked Bisignano how AI will help the IRS go after tax cheats — “a 100% bipartisan thing” — without the technology adversely affecting average Americans.
“Right now, we are heads-down on implementing things that make it easier for our workforce to get to the answers,” Bisignano replied. “I believe AI will be part of increasing the compliance rate, 100%. I believe AI will be part of speeding up everything we’re doing.
“I don’t see a world where an organization cannot use enough AI and be responsible with AI,” he continued. “And ‘responsible’ has to be that we have overseers of it, we have [a] governance model for it, and we also have people that are actually reacting to it. It will change the way our workforce works in a better way.”
The agency has seen success so far in using AI in customer service functions, Bisignano said later in the hearing, enabling “representatives to answer more calls in a day with more timely information” collected quickly and in one place by the technology. The IRS has also deployed AI on the processing of amended returns.
“It’s one of the great tools that we have here throughout the whole process,” Bisignano said. “And you know, it will affect the compliance positively over time. Here also is the ability to gather information, bring it together, give answers that need to be reviewed by a human, give them categorical opportunities or tell them where to search for. So I’m excited for it.”
