#1004 - Sam Corcos - Inside DOGE, The IRS & How to Scam the US Government
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode provides an inside look at the federal government's IT challenges through the eyes of Sam Corcos, who left his role as CEO of Levels to become Chief Information Officer of the Treasury Department. (00:26) The conversation reveals how government technology systems are decades behind, plagued by contractor bloat, and managed by leaders who often lack technical expertise. (00:42) Corcos discusses his efforts to modernize IRS systems, including putting 50 non-technical leaders on administrative leave during peak tax season and saving billions through contract reviews. (27:58) The discussion exposes systemic issues like the government's reliance on 60 million fax transmissions per year, procurement processes that take years to complete simple purchases, and hiring systems that prioritize tenure over competence.
- Main themes: Government IT dysfunction, the clash between Silicon Valley efficiency culture and bureaucratic processes, systemic waste in federal contracting, and the challenges of implementing meaningful reform within existing civil service protections.
Speakers
Sam Corcos
Sam Corcos is a serial entrepreneur and software developer with over a decade of engineering experience, having contributed approximately one million lines of production code throughout his career. He previously served as CEO and co-founder of Levels, a health technology company focused on metabolic health monitoring. In March 2025, he took a significant career pivot to serve as Chief Information Officer of the Treasury Department, where he oversees approximately $10 billion in annual IT spending and leads efforts to modernize critical government systems including the IRS's decades-long modernization program.
Chris Williamson
Chris Williamson is a podcaster and content creator known for hosting Modern Wisdom, where he explores topics ranging from productivity and psychology to politics and technology. He brings an outsider's perspective to complex topics, asking clarifying questions that help make technical subjects accessible to general audiences.
Key Takeaways
Technical Leadership Crisis in Government
The federal government suffers from a critical shortage of technically competent leadership in IT roles. (02:24) Corcos discovered that most Chief Information Officers lack technical backgrounds, with no requirements for technical qualifications despite overseeing billion-dollar technology decisions. This led to his recommendation to place 50 IRS IT leaders on administrative leave during peak tax season, replacing them with technically competent staff. The results were immediate - projects stuck for years began delivering within weeks once technical decision-makers were in technical roles.
Procurement System Creates Massive Inefficiencies
Government procurement rules, designed to prevent corruption, have created a system so cumbersome that it often costs more to set up contracts than the actual services. (50:05) Simple purchases require competitive bidding processes that can take years and be contested multiple times. This has led to the creation of "value-added resellers" who provide no actual value but take cuts from contracts simply to satisfy procurement requirements. The IRS paper processing initiative, which could save $1 million per day, has been stuck in procurement for months despite clear vendor selection.
Shadow IT Organizations Proliferate Due to Central Failures
When central IT fails to deliver, individual departments create their own technical solutions, leading to massive fragmentation. (1:47:57) The IRS has at least 60 different systems that don't communicate with each other, and approximately 108 competing sources of truth for basic data like taxpayer addresses. This occurred because compliance, customer service, and other teams lost confidence in IT's ability to deliver, so they built their own systems using separate contracts and teams, creating an expensive, disconnected maze of technology.
Civil Service Protections Create Perverse Incentives
While civil service protections exist for good historical reasons, they've created a system where poor performers can't be removed and the most common way to deal with underperforming employees is to promote them to different teams. (21:30) Performance reviews are meaningless because giving negative reviews triggers union involvement and significant administrative burden, so managers give everyone high ratings. This has resulted in a workforce where technical roles are filled by non-technical people who can't be removed or retrained.
Scale Amplifies Every Problem
Every government system must work for hundreds of millions of diverse users with countless edge cases - from the Amish who don't use computers to people without Social Security numbers. (2:20:09) This complexity makes simple changes incredibly difficult because every modification must account for extraordinary diversity in user needs and circumstances. Unlike private companies that can segment users or accept some limitations, government systems must be truly universal, making the "second 80%" of any project exponentially more complex than the first.
Statistics & Facts
- IRS modernization is $15 billion over budget and has been ongoing for 35 years. (00:53) This massive IT project was started around the time Corcos was born and is still projected to be "five years away" from completion - the same timeline it had in 1991.
- The IRS processes 60 million faxes per year through 50,000 active fax lines. (17:02) Despite fax technology being outdated for security, the government continues this practice because many believe it's the most secure method of information transmission, though cybersecurity experts confirm this is no longer true.
- Government contractor bloat may represent $30-80 billion in annual waste. (1:00:41) Through programs like the 8(a) small disadvantaged business program, contractors often take 10-50% off the top of contracts while doing minimal or no actual work, with contracts capped just under $25 million to avoid scrutiny.
