House Democrats want Treasury watchdog probe following DOGE’s IRS ‘hackathon’
House Oversight Democrats are asking a Treasury Department watchdog to open an investigation into DOGE’s data and IT modernization dealings at the IRS following reports of an internal “hackathon” at the tax agency that may have involved Palantir.
In a letter sent Thursday to Heather Hill, acting head of the Treasury Inspector General for Tax Administration, House Oversight ranking member Gerry Connolly, D-Va., cited “deep concern” over reporting in Wired last month that revealed plans for a 30-day sprint where DOGE engineers and a third-party vendor — potentially the data analytics giant Palantir — would create a new application programming interface connected to taxpayer data.
That API, Wired reported, would essentially serve as a storage center for all IRS data and enable agency systems to interact with unknown cloud services. Building a “mega API” is likely connected to plans for a “master database” that also pulls in data from the Department of Homeland Security and the Social Security Administration, according to Wired, part of a Trump administration effort to track and surveil immigrants.
“The reported data centralization and integration effort could undermine intentional compartmentalization of IRS systems,” which raises “serious privacy questions,” Connolly wrote. Those concerns include the possibility that someone with access to the new API could “export all IRS data to the systems of their choosing, including private entities,” the Virginia Democrat added.
In an interview with FedScoop last month, a source familiar with the initiative pushed back on the “hackathon” characterization and said the IRS Technical Roadmap Kickoff would be led by a career IRS chief technology officer.
“By consolidating systems through a robust API layer, the IRS will significantly improve its ability to manage taxpayer information securely, streamline data governance, enhance fraud detection capabilities, and reduce operational complexities,” the source said.
But Connolly said in his letter to TIGTA that there is no way an undertaking of that kind, in just 30 days, could “undergo vigorous audits and approvals for privacy, security, and data access controls” that is standard for the IRS.
Connolly railed against DOGE’s general approach to cybersecurity, writing that Elon Musk’s tech collective “has shown an intentional disregard for the relevant safeguards for information sharing, cybersecurity, and access controls” — a belief that many cyber and government experts share, including some who likened the efforts to an ongoing breach.
“Such carelessness with IRS systems could result in the illegal disclosure of Americans’ financial information and delays in tax refunds for hundreds of millions of taxpayers,” the letter stated.
House Oversight Democrats are asking TIGTA to specifically investigate any modernization plans DOGE has made for IRS systems, in addition to looking into controls the group has put in place to limit access to taxpayer data.
They also seek specifics on any data-sharing agreements between the IRS, Treasury and DHS, including whether such deals account for a law that prohibits the release of taxpayer data absent a court order. A preliminary briefing to Congress on those findings is requested by May 29.
The IRS has weathered an inordinate amount of upheaval during the first few months of the Trump administration. According to TIGTA, the IRS’s workforce has shrunk 11% as of March, with 11,433 employees terminated under the Trump administration. Lawmakers expect another 40,000 jobs to be eliminated in the months ahead.
On the tech side of the house, the IRS’s Transformation and Strategy Office was killed by DOGE, 50 IT executives were placed on administrative leave in late March, and the agency’s chief information officer stepped down in April.
Treasury Secretary Scott Bessent brushed aside Democrats’ concerns about workforce reductions last week, telling Congress that $2 billion in cuts to the IRS IT budget was accomplished “without any operational disruptions” and that “smarter IT” and an “AI boom” will ensure “robust” collections going forward.
