ACN Wins $2.6B IRS Contract Despite Data Leak, Politicians Buying
As the tax season came to an end this year, the IRS got back to work on launching its own tax filing software for the next year. The Inflation Reduction Act gave the IRS $15 million to prepare a feasibility report on a new free filing system run by the agency itself. That report was launched in the middle of May and showed promising results, including the survey result that 72% of tax filers would be happy to use the free filing software from the IRS.
The cost of running such a system would come to between $64 million to $249 million annually, depending on the type of filers who would be allowed to use the system.
Just over a week after this announcement, the IRS released some information on the companies that would develop and upgrade their systems. It awarded $2.6 billion in contracts to different companies that would compete for contracts to modernize the IRS systems over the next seven years.
But the list included a name that many thought would not even be in the running: Accenture PLC (ACN:US). The reason for this was an event that happened last year at the IRS. The agency mistakenly published confidential data of about 112,000 tax filers late last year. The data stayed online for a few days before the IRS was alerted to it. It asked the contractor to take the data down. The contractor in this instance was thought to be Accenture PLC. The IRS said it was reconsidering its relationship with the contractor.
In the backdrop of such an event, where the IRS clearly stated that its relationship with Accenture PLC was in doubt, it comes as a surprise that the company would be a part of the $2.6 billion announcement. Yet here we are, and Accenture will be building and upgrading the new IRS systems.
If we follow the trading patterns of US representatives, there is a clear buying pattern. They were buying the stock when the public was under the impression that the company may not get future IRS contracts due to the data leak.
Michael McCaul, the Republican Representative from Texas, bought $90,000 - $300,000 of ACN stock in multiple transactions in the last 6 months.
Daniel Goldman scooped up $50,000 - $100,000 of the stock in April as well. Other politicians that bought smaller quantities of stock during this time included Kathy Manning, Kevin Hern, and Lois Frankel.
The stock trades today at $311 and all the politicians who bought it during the last 6 months are in profit.
