Happy Returns: IRS Heads Off Computer Fiasco Rerun
from the July 15, 1985 issue of ComputerWorld magazine
by Mitch Betts
The Internal Revenue Service is taking steps to ensure that this year’s computer fiascoes, which delayed the processing of tax returns for several weeks, will not happen again next year.
According to IRS Commissioner Roscoe L. Egger, the IRS plans to acquire additional computer capacity at IRS service centers, provide additional training for programmers and conduct a complete review of computer operations.
“Taken together, these efforts are the start of what will be a continuing process to make certain we avoid the problems faced by taxpayers this year,” Egger said at a recent congressional hearing.
The processing delays occurred because of problems with a modernization program that replaced aging computers with newer Sperry Corp. 1100/84 multiprocessors and converted 1,600 IRS programs from assembly language to structured Cobol [CW, April 15].
Specifically, the computer problems included slow Cobol programs, bugs in applications and operations software and numerous glitches in 48 heavily used tape drives, according to Thomas Laycock, assistant IRS commissioner for computer services.
The result of the processing problems was a multitude of reports about angry taxpayers and legislators and demoralized IRS workers. Also, the IRS had to pay 13% interest on late refunds.
IRS caught up to 1984 processing rate
At the latest congressional hearing on the episode, held June 21, Egger reported that the IRS had caught up to its 1984 pace of processing tax returns. “This achievement has been reached only through the effort and dedication of literally thousands of IRS employees who have worked nights, weekends and holidays to reduce and finally eliminate the backlog we faced early this year,” he testified.
Egger said the most important lesson the IRS learned from the experience is that “despite careful planning and scale-model testing, you cannot know how a high-volume data processing system will work until you actually place the high volume on the system.”
IRS officials stressed that the antiquated IRS hardware — 10 to 16 years old — had to be replaced. “We expected problems from the conversion, and we experienced somewhat more problems than we anticipated,” Egger said. “But, there simply was no alternative to the replacement of the aging equipment,” he said.
Egger apologized to U.S. taxpayers for the frustration they experienced and added, “Frankly, this year has been frustrating for us as well.”
One legacy of the 1985 tax season may be skepticism about IRS computer capabilities, at a time when the IRS supports greater reliance on computers for tax processing. At a recent hearing on the Reagan administration’s tax reform proposal, one legislator questioned whether the IRS could handle the proposed return-free tax system, in which the IRS would use its computers to calculate income taxes for more than half the nation’s taxpayers.
“I am concerned that if we add additional burdens [to the IRS computers] we are going to blow a fuse somewhere,” commented Rep. Richard T. Schulze (R-Pa.).
Egger explained that the return-free system would require a big investment in new equipment, including document scanners, to compute income taxes based on data supplied by employers and other parties.