Private Sector Sharing The Load Through Government APis

When it comes to APIs, people respond to stories about real world examples, even more than solid technological implementations. If you can demonstrate how APIs are actually providing a solution, you can reach more people than just talking about the technological nuts and bolts. With this in mind I'm working through telling stories around how the IRS leveraged web services to incentivize private sector to develop applications that would provide tax solutions for the every day tax payer.

In my short year and half working for government I've heard the example of "TurboTax" used to describe an example of how the federal government can leverage technology to deliver partner driven solutions, and better serve the public. Obviously this is an example that resonates with leaders in government, but one that I think needs a lot more work to actually flush out the model more deeply, while keeping it as something that anyone can understand and is able to repeat in their own circles.

The story of the IRS e-File program for developers is a important blueprint for how a forms driven federal government system, can deploy APIs and share the burden of delivering important civic services with the private sector. Describing this as a "Turbo Tax Solution", is an extremely simplified analogy, whereTurbo Tax is just one application within an ecosystem of private sector, trusted IRS partners.

As with every other federal agency, the IRS faced the problem of modernizing its systems to keep up with current technologies, while also continuing to improve the US tax process, so that it would better serve americans, and make the massive federal agency more efficient, which resulted in the design of an e-File system, where tax professionals could submit electronic tax form filings via IRS systems. While a web-based approach to modernizing the IRS tax process is a large part of the evolution of the US tax process, it wasn't enough. The IRS isn't in the business of being a software developer, and needed more help when building the next generation of tax solutions--setting the stage for development of web services.

Web services, also widely called Application Programming Interfaces (APIs), provide the ability to submit traditional IRS forms over the Internet, directly from existing or new software platforms that are developed by 3rd party, public and private sector partners. These web services don't just speak in terms of IRS forms, they also understand the myriad of business rules that surround the submission of these forms, adhering to not just the legacy IRS forms process, but allow developers to follow the IRS tax code without fully understanding the intricacies of the complex tax system.

This new set of APIs provides the foundation for what is known as the modernized e-File system for software developers and transmitters. By employing APIs, the IRS is securely opening up access to the digital filing of IRS tax forms and supporting business rules, to trusted 3rd party partners from the public and private sector. This API driven approach allows the IRS to stick with what they do best, and not worry about being the sole developer of online, desktop and mobile applications that interface with the US tax process--giving birth to not just TurboTax, but a whole ecosystem of API driven technology solutions from the prviate sector.

The IRS Modernized e-File (MeF) system provides a blueprint for how the federal government can leverage APIs to establish and evolve a public / private sector partnerships that allows government to more intelligently deliver services. This API driven approach is not purely a technical solution, it is one that acknowledges there are business drivers needed that provide incentives for 3rd party organizations and companies to participate. There are also political considerations in the form of terms of services, privacy policy and security, as well as adhering to the nuances and forward motion of the federal lawmaking process.

This post is just the first in a series of stories and white papers working to better clarify the API driven approach the IRS has taken to better collaborate with trusted private and public sector partners. My goal is to eventually provide a working blueprint that other government agencies can follow when embarking on their own API initiatives, and better serve their constituents.