Modern Wisdom #1004 – Sam Corcos: Inside DOGE, The IRS & How to Scam the US Government

Date: October 9, 2025
Host: Chris Williamson
Guest: Sam Corcos (Chief Information Officer, U.S. Treasury Department)

Overview

In this episode, Chris Williamson interviews Sam Corcos, newly appointed Chief Information Officer at the U.S. Treasury Department. They explore the ongoing modernization of the IRS, deep-rooted dysfunction in federal tech systems, the realities of federal government bureaucracy, the controversial DOGE initiative, and the outsized influence of vendors and contractors. Sam gives an unprecedented inside look at government IT, discusses pressing issues like national debt, procurement bloat, civil service ossification, and what it’s really like trying to “make the government work like a startup.” The conversation ranges from shocking inefficiencies and efforts to drive change, to the reputational battles of DOGE, contractor incentives, and what it means to truly save taxpayer money.

Key Discussion Points & Insights

Sam Corcos’s Role & Government Modernization

• Appointment as CIO:

  • Sam explains his unexpected recruitment to help spearhead IRS modernization amidst widespread IT project failures.
    • “This has been important to me. I care a lot about the future of the country, especially the national debt...” [00:31]
  • Officially Chief Information Officer at Treasury, with a technical background (former software dev, CEO, 1M+ lines of code).
    • “I've contributed about a million lines of production code. So I'm not the best engineer that I know, but I've done a lot of it.” [03:31]

• State of IRS Modernization:

  • The IRS IT modernization has been ongoing since the early ’90s, chronically delayed and over budget by billions.
  • Historical lack of technical talent in CIO roles: Many CIOs are non-technical due to outdated standards.
    • “Most of the Chief Information officers, at least before this administration, were non technical... if you never update the standards, you just sort of fall into the situation.” [01:47]

Culture & Bureaucracy Inside Government

• Tenure vs. Technical Competency:

  • Promotions based largely on tenure, leading to non-technical people in technical leadership.
  • Administrative leave for 50+ IRS IT leaders lacking tech skills, replaced with technical staff—a historic move.
    • “[Putting] the entire leadership team of IRS IT... on administrative leave... and replacing them with the people who are technical enough to do the job. And that requires a lot of courage. Nothing like that had ever been done before.” [05:02]

• Civil Service Protections:

  • Hard to remove underperformers in civil service—almost impossible without extensive negative reviews and union pushback.
  • “The most common way... to get a poor performer off your team is to promote them.” [21:08]

• Government Employee Quality:

  • Some excellent engineers exist at the IRS—but the ratio is inverted: more managers of managers than true engineers.
  • “There are so many people whose job it is to like manage managers of managers of contracts of managers...” [23:29]

Change-making in Government

• Sluggishness of Change:

  • Executive orders and priorities rarely self-actualize; relentless follow-up is needed.
    • “The President puts out an executive order that says this is the new priority... you check in a couple weeks later and everyone's like, what? Which thing?” [26:57]

• Well-Meaning People, Bad Systems:

  • Good people, wrong roles; systems induce mediocrity and stifle the drive to change.

Government IT & Contractor Incentives

• Vendor Bloat & Dysfunction:

  • Overall IT budgets are huge; but procurement and contracting incentives are perverse.
  • Major contracts (e.g., six months, $2M pilot jumps to $100M annually on renewals with little oversight or resistance).
    • “The only reason why it's unique to government is that historically, nobody in my seat says no.” [35:47]

• Salary Disparity & Talent Drain:

  • Hard salary caps ($226K) make attracting senior tech talent impossible—gov’t pays vendors 2-3X for same roles.
  • “You would hire... a contractor, you pay them $500,000 to funnel $250,000 to the person you wanted to hire.” [47:09]

• Procurement Process Broken:

  • Endless competitive bidding, contestation, and fake auctions; value-added resellers skim off the top for no added value.
    • “You have to create what's effectively a fake auction... They all just take a cut off the top. They don't do anything...” [52:14]

• Contracting Scams & Loopholes:

  • Waste, fraud, and abuse blend into each other (“Is it waste, fraud, or abuse? The boundaries are gray.” [57:03]).
  • Small Disadvantaged Business (8A) loopholes: “...frankly, it's just a huge scam...they will often take 10, 20, sometimes 50% off the top to do actually nothing...” [59:06]

Modernization, Data Chaos & Software Development

• Legacy Systems & Mainframes:

  • The challenge is not just technical — it’s organizational. Mainframes work well for what they’re designed for; “modernization” often means adding redundant systems.
  • “The IRS has about 108 competing sources of truth... not talking about data sources. This is like the most complex Rube Goldberg I've ever seen.” [99:24]

• Approach to Modernization:

  • Opposes “big-bang” modernizations; advocates for continuous, incremental improvements and data consolidation.
  • “It is hubris to think that a system with a million hours of labor to make it good... can be rewritten from scratch and suddenly start working.” [157:12]

• Hiring Challenges:

  • Engineers are filtered out by HR and process; often not involved in interviews at all.
  • “If you are in engineering, you should be an engineer, and if not, you should not be in engineering.” [66:18]

DOGE: The Role, Reforms, and Reputation

• DOGE’s Mandate:

  • DOGE is a federal office launched by executive order to enable deep, fast reform—especially focused on cost savings and procurement integrity.
  • Sam: “...a loosely connected group of mission oriented people who want to fix a lot of the things that are broken in our government and stop the ever growing national debt...” [88:39]

• Savings Debate & Impact:

  • How savings are calculated is hotly debated—DOGE claims billions saved, but much is about unspent contract potential and budgeted but unspent money.
    • “The way that we've been tracking it... If I have already paid you $500K and then I cancel the remainder, we will book that $500K as a saving.” [90:40]

• Media & Perception Battles:

  • Stories of “hackathons” misrepresent strategic planning; optics often divorced from the slow, careful reality.
    • “...Wired magazine put out a piece that says that we hosted a hackathon... None of this is real.” [81:41]

• Elon Musk’s Influence:

  • Elon’s departure as a DOGE figurehead was less impactful at Treasury than believed, as their Secretary is highly hands-on.
    • “I had very little interaction with him. We primarily worked with the secretary's team...” [86:36]

• Youth, High Agency, & Criticism:

  • DOGE is accused of “Silicon Valley degeneracy,” but Sam says the narrative about unqualified youth is off:
    • “...the founding fathers were roughly the same age... These are not children. These are adults who are very capable people.” [129:18]

Broader Reflections on Government Dysfunction

• No Feedback Loops:

  • Government lacks the competitive incentives and feedback loops of private sector, allowing dysfunction to persist indefinitely.
    • “There is no feedback loop when it's the government... the debt just gets larger... there is no force that pushes against it.” [76:30]

• Skepticism & Trust:

  • Only 16% of Americans trust the federal government. Sam: skepticism is healthy and warranted given systemic waste and opacity:
    • “Peak skepticism is probably warranted.” [152:50]

• Examples of Dysfunction:

  • HHS payroll: A host of people and decades-old mainframes, multiple agencies and manual reconciliation just to run payroll [158:48].
  • Legacy and civil service protection result in high tenure, rewarding stasis and driving out top performers:
    • “The only... people... who I've been able to get... young enough to have no expenses, or at/near retirement.” [171:24]

Government, Tax Code & Rubber Meeting the Road

• Complexity of IRS’s Mission:

  • The IRS is the U.S. government’s “ledger and compliance” engine; policy complexity means implementation is highly technical and full of edge cases.
    • “IRS... basically a software company... BFS is more like Stripe, collects payments. IRS is more like QuickBooks.” [134:57]
    • “Every change to the tax code... affects a vast number of highly diverse people, and you have to account for every one of those possible edge cases.” [138:19]

• Policy vs. Implementation:

  • Political talking points meet real challenges in implementation; IRS handles almost all revenue collection (Sam: “It's almost all of it.” [143:00]).

Memorable Quotes & Moments

• On the Challenge of Change

  • “Executive orders are not self-actualizing. Just having the policy is a very small part of the amount of work...” [27:41]
  • “If the IRS were a private company, it would have gone bankrupt many, many years ago because people would stop buying the service because it's bad.” [42:08]

• On Vendor Games

  • “Normally they would come back with a price like a hundred million, and they just check, oh, is this within our budget? Yes. All right, sign off. But I'll say, where did you come up with these numbers?... What are we doing? This is crazy.” [36:01]

• On Civil Service Inertia

  • “The most common way... to get a poor performer off your team is to promote them.” [21:37]

• On Paper & Process

  • “We receive 60 million faxes per year at the IRS. We have, I believe, 50,000 active fax lines...” [13:42]

• On DOGE’s Optics

  • “People kept asking, this is the tail wagging the dog thing. I started getting emails from IRS engineers saying, hey, can I join the next hackathon? It's like, guys, there is no hackathon.” [84:39]

Notable Segments & Timestamps

• Appointment & Modernization Challenges: [00:31]–[06:48]
• Civil Service, Tenure, and Government Incentives: [07:44]–[23:27]
• Procurement, Vendor Abuse, and Budget Realities: [31:27]–[56:44]
• Waste, Fraud, and Contractor Bloat: [57:03]–[63:25]
• Leadership, Hiring, and Personnel Dysfunction: [63:37]–[75:24]
• DOGE Mandate & Media Battles: [80:01]–[85:05]
• DOGE Culture, Age, & Narrative: [88:39]–[90:31], [127:27]–[130:32]
• Savings Calculations, Contract Cuts, & Impact: [90:35]–[98:32]
• Technical Approach to Modernization: [99:24]–[109:22]
• Cybersecurity, Salary, and Risks: [109:22]–[116:05]
• The IRS as a Software Company & Tax System Complexity: [134:19]–[146:19]
• Making Changes Permanent: [173:15]–[175:22]

Tone & Language

• Open, candid, and often incredulous—Sam offers concrete examples from inside the system, balancing empathy for civil service staff with an engineer’s exasperated pragmatism.
• Chris presses on topics like incentives, optics, and the culture clash introduced by DOGE, often highlighting how wild the politicking and inertia feel relative to the private sector.

Themes & Takeaways

• Incentive Failures: Contractor bloat, ossified bureaucracy, and technical illiteracy are byproducts of warped incentives and a lack of feedback.
• Change is Slow but Possible: Moves like the mass administrative leave at the IRS IT show that, with political will, even seismic reforms can be pushed through—but sustaining them is another challenge.
• Optics and Communication Matter: The biggest unforced error of DOGE may have been not investing enough in communications, letting false narratives and skepticism flourish.
• Permanent Reform is Organizational: The biggest hope for lasting change lies not in technology itself, but in who is empowered to lead—and whether they are held accountable for technical decisions.

Recommended for anyone curious about how government really runs, why tech systems so often fail, and what it takes to bring startup principles to bureaucratic behemoths.