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No EZ Fix For The IRS
meltoast writes "Apparently the IRS is storing all of the taxpaying histories of 227 million individuals and corporations in a system that still runs code written in 1962. CIO Magazine is running a story on the IRS's nearly failed $8 billion modernization attempt that includes missed deadlines, cost overruns of over $200 million and four CIO's in seven years."
CIO Magazine is running a story on the IRS's nearly failed $8 billion modernization attempt that includes missed deadlines, cost overruns of over $200 million and four CIO's in seven years."
Ummmm......If this project was my responsibility, as CTO I believe I would have canned the whole project and started anew as from the sounds of it, there is too much baggage with which to continue. So, here we go: Don't deal with contractors and subcontractors or if you do, make sure that the IRS is actively involved with management and funding of the project so that nobody gets paid unless key points in the strategy are reached.
A simple strategy might be to run and fund the project entirely within the IRS structure and take the following strategy:
While the linked article is short on what exactly is going wrong with the transfer, I was talking with a guy working on the project in an airport last year. According to him, one of the big problems the IRS is facing is that everybody is talking about incompatible data formats and getting data to migrate from one database to another while maintaining taxpayer information. This may be a little glib, but perhaps we could take a more direct approach to updating the data file structures like deciding upon a data format a priori and simply, through brute force, repopulating the new database with the old data? We could create a few thousand temporary (2-3 year) jobs for those folks on welfare or currently out of work and using redundant strategies for error correction, manually enter the data into the new formats.
Done.
Visit Jonesblog and say hello.
Look on the bright side. There's no way Windows worms can touch this.
Don't blame Durga. I voted for Centauri.
FairTax.org
:wq
$200 million is kind of small compared to $8b. That would be like me buying a car for $8,000, and finding out there was $200 in "transportation costs" or something.
_______
2B1ASK1
What percentage of our income taxes paid in the US goes towards collecting those same taxes?
How much could be saved by moving to a flat tax and getting rid of all the exemptions and deductions and tax-breaks?
Income: xxxxxx
x 0.20
Tax owed: xxx
You could fire 99% of the IRS employees and get the operating budget to that of a Taco Bell.
What?
I don't understand why they just don't get Intuit to do it.
No pun intended.
Game: Player 'Donald J Trump' now has AI skill level 'experimental'.
Why not publish the taxing rules and let someone
throw together a Postgresql/Apache software package?
doesnt unix still run code from the 1970's or there abouts? just because its old doesnt mean it sucks. linux still runs code from its early days also. just a question anthony
You work in the private sector -- where a CTO's responsibility is to implement the new technology and deliver results.
I can guarantee you that actually completing a project is not the goal of any government CTO.
In the public sector, the longer a project takes, the more favorable contracts can be handed out to friends and people from whom political favors can be extracted in the future. The more favors you're owed, the more power you have. The more power you have, the more people you can hire, the bigger your budget, and the more people who owe you favors.
If your goal is to decrease cost and increase customer service because there's competition that's ready, willing, and able to take customer dollars out of your pockets, those are bugs, not features.
If your goal is to increase cost and decrease customer service because there is no competition -- and the only way to get more dollars into your pocket is to increase your power, these are features, not bugs.
In brief: Government - working according to the parameters listed in its functional specification.
If it 'nearly failed', doesn't that mean it still succeeded?
How does a 'nearly failed' attempt to modernize the IRS still run code from 1962?
I doubt there was anything 'nearly' about it. Looks like they spent 8.2 billion, adjusted expectations, and called the project a success (or a 'near failure').
I like the idea of the Fair Tax with the exception of one element -- the rebate. I don't like the idea of the government sending a check every month. By not taxing necessities it would seem to me that it can done without the rebate.
Flat Tax?
The time has come to remove the nightmare that is the Internal Revenue Code. Flat taxes would make it IMMESURABLY easier to find Tax Cheats, file taxes, keep records etc.
Here is my plan. Short, simple and effective.
Income x Rate = tax basis - deduction = payment ( negative = 0)
10,000 x 22.5% = 2250 - 8000 = 0
50,000 x 22.5% = 11250 - 8000 = 3250 (6.5% tax)
150,000 x 22.5% = 33750 - 8000 = 25750 (17.2%)
Save tons of time, increasing productivity, lowering operating costs. The people crying the loudest would be the Tax lawyers and accountants. Possibly even the rich (shut up). Lawyers right bad laws, and accountant have a vested interest in keeping things complicated, so they should be bared from this discussion.
In addition, all those that say a tax cut favors the "rich" can all go pound sand. In my system a tax cut favors everyone, except those not paying any, and why should THEY complain about something that doesn't affect them at all?
As it is right now, nobody, not even the IRS is 100% sure what is in the code. If the elections were held on April 16th instead of November, that too would help.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
You obviously don't work in Government.
Local and state governments have deadlines just like in the private sector. The only real difference is that we have to deal with a lot more buricratic cr*p.
If any of my projects were 7 years over due, I would expect to get canned, or demoted.
10% to the US Government
3% to the RIAA, to pay for the stuff they assume we've pirated in the last year.
3% to the MPAA, to pay for the stuff they assume we've pirated in the last year.
2% to Microsoft, as part of a "super-tough" DoJ settlement for Microsoft's wrongdoing.
2% to Halliburton, for no apparent reason, the government just likes to give them money.
I bet there are at least 1000 people right here on slashdot who could understand it just fine, and wouldn't mind putting a few "exceptions" in the tax code:
"We need a fourth law of Robotics: Stop Fingering My Wife"
the cost of collecting $1 of revenue--45 cents in 2002, the last year for which statistics are available--has not appreciably declined in two decades.
This is completely unfathomable to me. If they cut this number in half, the federal budget would increase by 25%!! Without raising taxes a single penny! The idea that half of the money you pay into the IRS goes simply to maintining their 4 decade old software is insane.
Seems even their circa 1962 code can't deal with more modern features, such as Direct Deposit of refunds.
Case in point: my own refund.
I just got a letter from the IRS yesterday saying "Sorry, we have to mail [you] a paper check because the Routing Transit Number [you] supplied from your account is invalid". I went and pulled out my checkbook, and confirmed that both my checking account number AND my routing number were CORRECT.
Could they have been scanned incorrectly? Possible, but the numbers were written as clearly as if I had typed them.
Could they have been manually re-keyed incorrectly? Don't we have SOFTWARE to prevent that? Oh, wait, this code was written in 1962.
Worse yet, when I called IRS to complain, the lady on the other end of the line didn't seem to know what a Routing Transit Number was. Arrgh.
There needs to be a cure for Incredible Rampant Stupidity.
The problem with socialism is that they always run out of other people's money. - Margaret Thatcher
it says in the article that it costs 45 cents to collect one dollar, to quote:
..."
"Meanwhile, the cost of collecting $1 of revenue-45 cents in 2002
WTF? What's the total tax revenue from IRS last year? Say a trillion dollars. Is the article really claiming that it cost 450 billion dollars to collect that??!
That's just absurd. Please somebody explain the truth to me here.
Hmmmm ... what to do, what to do ... Stretch out the job and the paycheck, and hope the antiquated system fails catastrophically, or make an honest effort to get the new system on line before that happens?
Of course, I'm sure that has nothing to do with the current difficulties. Seriously.
[1] In the U.S., tax returns (complete with check) are due on 15 April.
See what I've been reading.
At least $200 billion per year.
5.8 billion person-hours in 2002 - the equivalent to the entire labor of a city of 2.7 million people.
> Income: xxxxxx
> x 0.20
> Tax owed: xxx
The question is "how do you define income" -- at which point we're back to square one. Capital gains? Dividends? Revenue from your business? Or profits? If profits -- how do you handle the deduction of your legitimate business expenses? What expenses are legitimate and what expenses aren't? That yacht you bought to entertain your guests? The hamburger you bought when you were interviewing your first employee?
I believe that taxing consumption, not income, allows for a less complex system.
If I had to "patch" the US Internal Revenue Code, I'd:
1. Abolish the Alternative Minimum Tax. One tax code is enough.
2. Eliminate holding periods such as the one-year holding period to differentiate a "short-term" capital gain versus a "long-term" capital gain, and the "30 days, not necessarily consecutive, during the 60 days surrounding the ex-dividend date" used to determine whether dividends are "qualified" or "unqualified" dividends, and the 2-year rule on principal residences. Eliminating these arbitrary time periods and the differential tax rates they cause throughout dozens of forms would eliminate *hundreds* of lines of calculations that deal with the intersection of these arbitrary time periods, Section 1250 contracts, and the myriads of "wash sale", "straddle" and "constructive sale" rules, etc etc etc.
3. Eliminate phaseouts. There's nothing dumber than going through the entire year assuming you get a $5000 deduction, only to find out that the $5000 deduction is "phased out" by $0.25 for every dollar over $32,767 that you made, until $49,152. (Unless you're an Albino Sheep, in which case you have the Albino Sheep Allowance of $6000, phased out by $0.52 for every dollar over $39,152 to $42,767.) If you must have progressivity or social engineering measures in the tax code, make 'em all-or-nothing.
4. Tax employment income, interest income, dividend income, and capital gains income at the same flat rate. (Double taxation on dividends could be prevented under such a scheme by providing full deductibility for corporations that issue dividends. My personal opinion is that because investments are purchased with after-tax dollars, the only morally-justifiable tax rate on investment income - interest, dividends, or capital gains - is zero. But in this post, I'm talking about how I'd patch the existing Internal Revenue Code so as not to be so fucking confusing, not to make it "right".)
5. Scrap the motherfucker. And replace it with a consumption-based tax. But since #5 isn't gonna happen - ever - I'll vote for any ruler who includes any of #1 through #4 in his platform.
From the article, It cost 45 cents to process every dollar comming in. This number has been the same for over 20 years.
This is BS...We work more than a third of our lives for taxes and they have the efficiency of a MBA on a Winblows system. Come on, get with the system.
From my professor...
"In order to write a good algorithm that can solve a problem, you must be able to solve it yourself."
How would you expect a computer knows how to file return when some people in IRS don't even know how?
In US, you can easily buy enough major firearms to wipe out your neighbourhood but a few little fireworks are banned.
The above post is cynical nonsense. As a specific example, the IRS has reduced form-mailing costs by tens of millions of dollars by making PDF forms available for free via anonymous ftp. Is that a waste of taxpayer money?
As for handing our favors, the semi-crooks that foisted a similar failed project on the California DMV are now facing jail time.
More likely in the IRS's case, if Congress tells the IRS to use 1962 technology and hire idiot slacker consultants, then 1962 technology will be used and idiot slacker consultants will be hired. But the pork and the cronyism comes from Congress, via laws and regulations that, currently, are legal.
My wife works in the federal government: in the last five years they have fired their in house IT workers and hired them back as slacker consultants, fired the slacker consultants and hired them back as in house IT people, and now they are laying off the in house IT people and hiring another gang of slacker consultants. I'd rather have my eyes gouged out with a spoon than deal with that kind of turnover..
Note the references to unclear goals and communication issues, lack of buy-in from internal staff, the assumption that the IRS team could have a thin team to work with CSC.... It doesn't seem the IRS learned from their past failures either. The article reads like a list of project management don'ts.
I don't want knowledge. I want certainty. - Law, David Bowie
I've hired a number of computer people and it's really hard to find great people who want to put up with government work. The dotcom bust has been great for hiring.
I put up with the red tape and piles of legislative rules, because I feel the research we do is worth it.
I make a decent living, but I know I'll never with the stock option lottery. Which sucks for you too, because if I didn't have to work for a living, I'd be writing free software. Luckily, my employer allows me to submit patches to the packages I use.
To sum it up: If government jobs are so great, why do so few qualified people apply to our opennings.
I've seen that exact same thing-- IT folks clinging to outmoded tech simply because that's all they know, and are too tired and/or lazy to learn something new.
But, I've witnessed exactly the opposite problem, too, or perhaps the exact same problem with an outsourced project.
My wife works at a nonprofit that does management of the federal Welfare To Work Program. The state (AK) installed a "wonderful" database system using all the latest and greatest tech-- based almost entirely on MS products. I mention this because I think it is relevant.
The system sucks so hard, it blows. It is constantly down, data is lost with no real explanation ("The broker crashed," is a common refrain), it is difficult to use, and it sometimes returns incorrect results. There is a multi-hour lag time between data entry and data availability.
Here's my theory: it was designed by people who think they are programmers because they can use MS Visual Studio to create a front-end to an application designed with MS-Access (deployed on MS SQL Server).
One of the downsides of the vaunted MS "ease-of-use" is the proliferation of half-assed coders who think they are hot, who have managed to ignore 50 years of history and knowledge, and are doomed to make the same mistakes over and over again.
I think this is worse than the aging IT folks who hide in government buearocracy, polishing and defending their niche until it both shines and cannot be assaulted. I would rather have old technology that works than new technology that is so misused or intrinsically faulty that it just barely works, and that's "good enough."
But then again, that's just my opinion. I could be wrong.
Microsoft is to software what Budweiser is to beer.
Better yet, for the ultimate hack, work on this project, doing nothing illegal while you are there, but pay close attention to the code that processes people's tax forms, and look for any buffer overflow bugs in the code that reads the text of the fields on the form (I assume they have some massive OCR system for this, instead of a warehouse full of typists doing it by hand).
F root.exe"
Then, next year, submit a very carefully crafted 1040 form on April 15...
"Hey, this 1040 seems a bit odd. It's from a Mr "John Doe __________akjg908t9(%&@(dasaga9agajda(%(@Q@FAA062
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.
I believe the parent is strictly referring to federal government. State and local governments have to balance their budgets and make ends meet. The federal government doesn't. I'm on a project now for a Big Agency (agency head is cabinet level) that has been going on for over 20 years through at least 3 different contractors just since the web became important (late 90's, to them). We are 18 months behind schedule and all we have produced is a glorified address book and the beginnings of a framework for managing a small part of the rest of their business.
Our team is not incompetent. Put this group of 20 programmer/analysts, a half dozen business analysts, 4 really strong data wizards and assorted support staff in a commercial environment and I we could kick out some solid systems on time and within stone-throwing distance of the budget.
The business processes we are replacing are fairly complex in the rules, primarily because the rules change every year and we are supporting data and rules going back 50+ years. That is not the problem. A significant part of the problem (and I freely admit we have made more than our fair share of mistakes on this as well) is that the half dozen different departments within the agency are all using the project as a tool to increase their political power and to screw the other departments. That is the one and only goal.
I'm not at all surprised by what happened at the IRS. I'm surprised it isn't worse.
I did contracting work for the USDA for a while. There were a lot of bad government employees, but I thought most were pretty good. The real problem was the independent contract companies (like the one I worked for). They were only interested in billing hours, not in quality of work. The goverment depended on these companies to give them good advice. That advice usually slanted to what every would bill the most hours.
http://www.windmeadow.com/
One major reason why the IRS can't update their technology is that the US Tax Code fills more volumes than the Encyclopedia Brittanica. There's more lines of instructions in the friggin law than there is running the Space Shuttle.
Many of those instructions conflict and contradict each other. It is impossible to computerize instructions like that. Can't be done. No way, no hope, no chance.
But why should this be a problem? Perfect opportunity to introduce a FLAT TAX. Everybody pays some percentage of their annual income, like maybe 5%, no exceptions and no deductions. Make the income cutoff at $30,000 or something like that.
SHAZAM, no more problem! The government gets the money it needs, because by reducing the 45 cents on the dollar cost of tax collection to somewhere around 5 cents (do you belive that? 45 fucking cents! And they say the military is expensive!) they more than make up for any reduction in the tax rate.
Plus they can fire half the IRS in one go. That's a goal to work toward! Yeehaw! Problem solved, next up, the INS.
There seems to be a big bias in our political culture against people of modest means accumulating any kind of money through control over personal spending and saving. There is a concern about wealthy people controlling all of the resources of the society by making it easy for those fortunate enough to even have a small surplus over their spending to accumulate wealth -- the kind of Huey Long concern. People at the top have access to financial advise, tax planning, and investment opportunities that one can only dream of, but people in the middle get hosed.
Exhibit A is the advice for people of modest means to put savings into the stock market. Traditionally the stock market was a high risk undertaking for the very wealthy with money to burn. In the 1920's, mass ownership of stock caught on and then people got burned in a bubble collapse. A cornerstone of Depression era economics policy was Federal savings deposit insurance -- the idea was for people of modest means to have a low earnings but secure place to save money, and it wasn't in the stock market.
Well, combine the 1970's and early 1980's inflation with regulated interest rates and taxation of savings interest and you had a negative rate of return -- your savings just kind of evaporated for being there. So first there was the money market mutual fund and then the stock market mutual funds as the answer to middle class savings.
And then there was tax sheltered savings in IRA's, only they put in a phaseout on the IRA contribution, followed with the Roth IRA, which inverted the role of principal and earnings in terms of what was taxed, only that had a steep phaseout (actually an income cap), oh, and we are allowed to have tax-sheltered savings in 401K plans, only a good part of your earnings are paying an insurance premium to some pirate, and some 401K's have proven to be scams (can you say Enron? I knew you could!).
Oh, and the answer to health insurance for the self-employed is the Medical Savings Account, which is another scam^H^H^H^H where you are allowed to save money if it is for some sanctioned purpose and is done in some restricted way.
I guess we are really afraid of giving people the liberty to save money. People who have any kind of surplus over what they earn are suspect because apparently everyone from SSI recipients to Michael Jackson are spending every penny they receive and then more on top of it. From the principal of compound interest, even modest levels of saving in a minority of people can create great disparities in wealth, hence the need for inflation, low savings interest rates, and taxation of interest earnings to keep such people in line. And apparently our economy is one big Keynsian bubble -- if people stopped living beyond their means and buying on credit apparently the whole economy would crater.
With savings there comes moral principles of self-reliance and disciplined appetites. One can save enough money for your eventual nursing home stay without having to go on Medicaid. One can have that fancy car but one has to plan ahead for it. With the war on savings, one can have one's fancy car, but one has to be on a credit treadmill, one can have that college education, but one must be a financial assistance supplicant, one can be treated in a nursing home, but one must receive Medicaid assistance. One can "save" money too, but only if for sanctioned purposes and by participating in the correct program.
I say the problem is not the taxing of earned income but all the restrictions on what one can do with that earned income that follow from this great fear of income inequality is the heart of the problem.
I used to be a techie in Baltimore but after moving to Portland, OR and looking for months for another tech position I ended up taking a customer service postion with the IRS.
;)
I work on the toll free help line for individual tax issues and I use the IRS system on a daily basis.
There are 2 parts to the user interface: IDRS (Integrated Data Retrieval System) and ICP (Integrated Case Processing).
IDRS is the main text based interface to the database.
ICP is a recent addtion to the system. It is a basic GUI which helps users enter command codes, switches and definers in the proper format.
There are several hundred command codes.
I use a couple of dozen on a regular basis.
The system has proven to be pretty stable but it does go down occasionally.
It does become inaccessible during the last week of the year so updates can be made in preparation for the new filing season.
The first few weeks in January are called dead cycles.
During this time, many of the command codes are taken offline so further maintenance can be done to the system.
Our desktops run Windows NT 4.0
Until January of this year, each of the ten service centers maintained a separate database.
Each of the call sites was assigned to a service center.
When data is entered or changes are made to accounts, it is first recorded to the service center database. Every two weeks, tapes of the changes made in the databases are flown to the central computing center in Martinsburg, WV where they are all integrated into a central database.
This made research exceedingly tedious.
If a taxpayer (TP) called in with a problem, you would need to check each of the active databases to find out what was going on.
If changes were made to multiple databases, error conditions would occur when the changes were consolidated with the master database.
In January, the service center databases were eliminated for individual tax accounts and we now access the master database directly which eliminates a lot of issues.
This was all done within the confines of the existing system.
There is some progress being made but it is certainly nowhere near being a user friendly system.
It takes quite a while to learn the commands and how to format them properly.
There is a 600+ page manual updated annually which helps you to interpret the information presented in IDRS.
Everything is presented as a numerical code.
For instance a refund being issued is designated with transaction code 846. Another subcode tells you if the refund is a direct deposit or a check. The date on the code is not the actual date the refund is scheduled to go out. To figure that you subtract 10 days if it's a direct deposit and 3 days for a check. All refunds are issued on Fridays.
If you are being audited there will be a transaction code 420
To correct errors on an account you enter the appropriate codes and dollar amounts and then it takes about 2 weeks to process,
It shows up as a pending transaction until processing time is up. If you didn't do it right, it'll come back to you as an unpostable transaction in about 30 days or so.
Needless to say this is not convenient for the TP.
Anybody who spends more than five minutes watching someone work with the system will realize that upgrading the system is not a straightforward task.
For those who are wondering how all those tax returns are entered:
They are typed into the database manually by seasonal employees who are paid piecemeal.
Use a VAT to tax corporate income. Replace the personal income and wage taxes with a consumption tax (money invested is not taxed until it is pulled out for consumption). The nature of a VAT is to pay tax on *everything* but credit tax already paid (i.e. if you pay $10+VAT for a piece of wood, you get to credit the VAT you paid against the VAT you charge on the bookcase you make from the wood).
A VAT is very hard to game. The only deductible expenses are tax already paid. The biggest concern is using business resources for personal use. Even that can be legislated away; enforcement is just tricky.
Remember, a new system doesn't have to be perfect. Just better than the current system, which is a bizarre and ever changing mix of taxable, partially taxable, and non-taxable items.
The software is over 40 years old, and STILL nobody has found a hack for major refund. ;-)
while true ; do echo this is my sig; done
No, he's right. Government jobs are for mostly for leeches. As one guy said at the gub'mint job I have, it's the 40-60 system. 40% of the people do 60% of the work. I think that's over-estimating the laziness of the common government leech because it's worse than that.
Sure, I've worked for corporations and there's plenty PLENTY of slack off time (just like in Office Space about the 15 minutes of actual work a day), but it's nothing like Gub'mint Work where I've been penalized for working too much. I ignored the first "slow down, you work too much" warning and it nailed me on a review.
You're paid for not working because that's the Magic of The Job. If you can't finish your job, you get a bigger budget.
My 2nd job is at a small company and I'm not paid more in the private company like you said. But I enjoy working there.
And public defenders, and I'm thinking of the one that told my uncle to plead guilty to an armed robbery that even the witnesses said wasn't commited by him, wouldn't do it if they were qualified enough to get a real job.
riding round the world on an old motorcycle
We could fix that with a flat tax on ALL income over $25k a year, but that is a different thread all together.
Does that include inherited assets? What if the recipient is under 18? Does that include appreciation? Does depreciation count as negative income? What about taxes people pay overseas? What about money earned overseas? Dual citizens? Deferred earnings? Gifts to relatives?
The flat tax is a red herring. It's as if the additional math of a sliding scale is going to be a tremendous burden to the system. It's not. The system is complicated because of all of the various special cases involved in it. What about the parent who is earning 40k per year, but spending 20k on education for their children? Or the father making 70k but spending 35k on medical bills?
Make no mistake about it, flat taxes are a way that rich people can pay less, period.
Besides, the most byzantine part of the tax code is corporate taxes, which, it was recently revealed, %60 of all corporations don't pay. First of all, unlike people corporations only pay taxes on net income, not gross. So if they didn't earn any money, they don't pay any taxes. Of course, what qualifies as taxable income and taxable expenditures varies. Then you have exemptions and reductions for where you're headquartered, the types of workers you employ, what industry you are in, what kinds of R&D you do, employee training, and about a million other things. Add into that the problem of overseas earnings, and earnings at home from overseas labor. What about earnings passed up from wholly or partially owned subsidiaries? Do they pay twice?
A lot of these corporate special cases are desirable, because they encourage things that you want to encourage. To say that they must all go and be replaced with a "flat tax" is a gross oversimplification. You haven't even defined what a "flat tax" is in a multinational corporation. Is a man in Denmark buying a book on Amazon.uk using an American credit card to an american bank a taxable transaction?
With apologies to Einstein, it would be good to simplify the tax code as much as possible, but no further. The "flat tax" is not applicable to real-world situations, does not directly reference that which makes the tax code complicated, and does not solve the problem.
No disrespect to you or your family intended, but the flat tax is no solution. Personally, I wouldn't mind a total tax rewrite, but I suspect that in the current political climate that would open up a field day for all-new abuses.
The ______ Agenda