Tysons-based contractor enlisted to help modernize IRS

The American tax system may finally get dragged into the modern world, with an assist from a federal contractor based in Tysons.

Maximus has signed an agreement with the Internal Revenue Service to participate in a $2.6 billion push to modernize the agency’s computer systems and databases, the government services company announced yesterday.

Under the seven-year contract, Maximus will compete with other awarded companies to upgrade technology dating back to the 1960s, consolidating over 400 different systems into “a new, cloud-based architecture,” according to a public relations representative for the company.

Other awardees include Booz Allen Hamilton, which is also headquartered in Tysons.

“The IRS laid out an ambitious plan to transform how the agency provides services and capabilities to improve the taxpayer experience as well as IRS internal operations,” Maximus Federal General Manager Teresa Weipert said in the press release. “Maximus, through our excellent IRS team and modernization expertise, will deliver on that plan and taxpayer experience.”

The announcement came a day after the IRS filed a report in Congress outlining plans to test its own free electronic filing system as an alternative to paid services like TurboTax and H&R Block, which have lobbied against taxpayers submitting their returns directly to the federal government.

The IRS currently has a list of private companies that offer free tax preparation and filing services to people under certain income thresholds, but less than 3% of taxpayers utilize the “Free File” providers, even though about 70% of people are eligible, according to the Government Accountability Office.

A pilot program is expected to launch by the beginning of the 2024 tax season in January, making the IRS system available to “a small group of taxpayers,” the Washington Post reported earlier this week.

Maximus won’t be directly involved in developing the e-filing system, but its work to modernize the IRS’ technology will help “enable offerings like that,” the company spokesperson said.

Headquartered at 1600 Tysons Blvd, Maximus has worked with the IRS for more than three decades, per the press release. Its other government clients include the Social Security Administration and the Centers for Medicare and Medicaid Services.

The company has faced protests and strikes by workers in its Medicare and Medicaid call centers over their wages, benefits and working conditions. A coalition of labor and civil rights groups sent a letter to the Labor Department in March calling for an investigation into allegations of racism and sexism.

Low pay, unaffordable health care costs, inadequate break and paid leave policies, and other issues persist in Maximus call centers, according to the Communications Workers of America, the union that has been organizing some employees.

“Workers have raised serious questions about racial disparities at Maximus, particularly for Black and Latina women who feel that they have no clear paths to career advancement,” CWA organizer Victoria Miller said. “The IRS itself is a model of equity in comparison to the vast racial and gender disparities that exist at Maximus.”