AI and Application Modernization

Presented by IBM

Modernizing legacy systems is one of the most significant challenges federal agencies face, and the Internal Revenue Service (IRS) is no exception. Kaschit Pandya, Chief Technology Officer at the IRS, and Fred Collins, Distinguished Engineer for IBM Consulting, explored how artificial intelligence (AI) is playing a pivotal role in transforming the IRS’s technology landscape.

Pandya explains that while AI has long been part of the IRS’s toolkit—primarily through machine learning—the introduction of generative AI represents a new frontier for modernization. This advanced form of AI has the potential to revolutionize how the IRS manages and upgrades its legacy systems. By converting outdated programming code into actionable business logic and modern programming languages, AI tools dramatically reduce the time required for system updates. Tasks that once took weeks can now be accomplished in a matter of hours, enabling faster implementation of critical updates.

Collins highlights how IBM’s AI capabilities are instrumental in this transformation. IBM’s tools not only automate code conversion but also generate detailed documentation, ensuring that systems remain understandable and maintainable over time. This approach reduces the risk of errors and allows IRS engineers to focus on higher-value tasks, such as developing new features and improving taxpayer-facing applications.

The IRS’s modernization efforts are driven by a need for greater scalability and performance. With millions of taxpayers relying on its services, the agency must ensure that its systems can handle increased demand efficiently. AI helps achieve this by enabling a seamless transition from legacy systems to cloud-ready architectures. These modernized systems not only improve operational efficiency but also support the IRS’s broader mission of delivering better services to taxpayers.

Pandya stresses the importance of a methodical approach to AI adoption. “AI is a powerful tool, but it’s not a hammer looking for nails,” he says. The IRS is careful to ensure that AI addresses real problems, rather than being applied indiscriminately. This thoughtful implementation strategy ensures that resources are used effectively and that the benefits of AI are maximized.

The collaboration between the IRS and IBM is a testament to the value of public-private partnerships in addressing complex challenges. IBM’s expertise in AI and application modernization has enabled the IRS to accelerate its modernization journey while minimizing disruptions to its operations. Collins notes that this partnership is not just about technology but also about building trust and fostering innovation.

Looking ahead, the IRS’s modernization efforts will continue to rely on AI to address emerging challenges. As the agency moves toward more agile and efficient systems, it is setting a standard for other federal agencies to follow. By leveraging AI to modernize its technology infrastructure, the IRS is ensuring that it can meet the needs of taxpayers today and in the future.

This interviews was part of the program AI for Agencies: Modernization and Taxpayer Service which explores the transformative role of artificial intelligence within federal agencies, with a focus on the IRS's efforts to modernize operations, enhance taxpayer experiences, and optimize workforce management. Hosted by Francis Rose and presented by IBM, the program features in-depth discussions with leaders from the IRS and IBM on AI’s strategic implementation, from use-case-driven approaches to its impact on application modernization and human resource management.