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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."
Why not publish the taxing rules and let someone
throw together a Postgresql/Apache software package?
Yeah, and you'd have the most unfair (notice I didn't say inequitable) taxing system ever. What a mess this would be! The poor, who currently pay basically no taxes on their 18K per year suddenly owe $3.600 / year, which is like 4 months rent. The rich making $1million per year owe 200,000, but that doesn't affect them in the least - 800K is still ashitload of money.
We have tax breaks because we want to ENCOURAGE people to get an education and child care, so that they dont have to decide between rent and school.
The whole concept of a universal flat tax is just silly if you think about it for more than 5ns.
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"
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.
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.
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.
Although government agencies (bureaucracies) are accountable to nobody, and as a result, the IRS would never support its own downsizing, you've hit at the real root of the problem.
If the Internal Revenue Code weren't so complex, the IRS would be forced to downsize, no matter how hard it screamed for self-preservation.
The revolving-door "in-house"/"contractor"/"in-house" system you describe is symptomatic of bureaucracy. But that bureaucracy wouldn't exist if Congress didn't invent it.
If every Congressman had to do his or her own taxes, with pencil, paper, and 4-function calculator, and with no assistance from anything but the IRS help line, web site, and published forms, the Internal Revenue Code would be fixed within a month.
Unfortunately, the odds of Congressmen having to face the monster they created are zero. As much as I hate the IRS - they're just the guys running the trains and seeing to it that the gold teeth are accounted for. The real villians in the story of high tax compliance costs are the ones who issue the orders that we get into the fucking boxcars.
This is a crock of shit on so many levels that it barely deserves comment. The vast majority of the folks who work for the Fed. Govt, and that includes the IRS, are decent folks who are very skilled at what they do, and muddle through in a broken system that is primarily imposed upon them by Congress. Of course they try to do new things the improve the system, but unless you get a chance to do it all over at the same time, its impossible to ever really fix everything. Just ask the FAA. It only took them 3 trys and about $20 Billion to redo the air traffic control system in the US.
The reason it costs 45 cents to collect a dollar of revenue is the byzantine tax code that has been generated over the 80+ years we have had a federal income tax. We could fix that with a flat tax on ALL income over $25k a year, but that is a different thread all together.
My dad supervised most of the development work done at the IRS that supports the master file. The tax code is so complex that the only people who actually understand are the IT group at IRS, because they are the ones that actually have to implement it. Reading the article, and from first hand experience, the attempts had moderization have failed because Congress and the higher ups in Treasury and the IRS thought contractors could do it better than the in-house folks. Not a big surprise that the project fails when the folks who know the context of the system are not asked to participate in the development of the replacement.
If some group of folks came in and tried to tell me that they knew my job better than I did, but they understand the work did, or why we did it the way we did, I'd be pissed off too.
BTW, if you are wondering, every taxpayer in the US has about 3/4" of tape that contains their entire tax history. The master file lives in a huge vault at the IRS's data center in Martinsburg, WV, which has the biggest damn door I have ever seen. Not quite Cheyanne Mt big, but still pretty good sized.
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.