Taxing time for the tax man

Midnight deadline: Old computers, smaller IRS staff slows processing of 215 million tax returns.

April 16, 2001

GIVEN THE obstacles thrown in its path, it's amazing the Internal Revenue Service handles tax collection as well as it does.

By the time this year's income-tax deadline passes tonight, the federal agency will have received 215 million returns (130 million from individuals) and collected more than $2 trillion for government operations.

Yet as the number of tax returns rose by 13 percent over the past nine years, Congress cut the IRS' workforce by 17 percent. Automation hasn't made up the difference because the IRS' computers are a stunning 35 years old.

That's Stone Age technology by today's standards.

The agency has more than 8,700 pieces of software -- much of it written in antiquated, 1960s code -- tied together through a "jury-rigged system of computers," according to IRS Commissioner Charles O. Rossotti. He bluntly calls this equipment "woefully obsolete and inefficient."

To top off the IRS' problems, a groundless crusade by Republicans in Congress bent on crippling the tax collector achieved its goals with passage of "reform" legislation that has slowed the review of tax returns and occupied the time of 4,200 IRS staffers. No wonder audits of individual tax returns dropped 50 percent last year.

The Bush administration, though, has set aside $400 million for long-term computer modernization. It also has requested money to hire another 3,700 workers.

The aim is better customer service, quick responses, faster refunds and more success in collecting the estimated $200 billion a year that tax evaders never pay the government.

Far greater reliance on computers and the Internet are pivotal. Already, 42 million people file their returns electronically. (The goal is 80 percent by 2007.) The IRS' Web site has received 1.3 billion "hits" this fiscal year. Just in the last two months, taxpayers downloaded 103 million forms and publications off this Web site (

Since the American revolution, the tax collector has been an unpopular fellow. Making the IRS technologically efficient and customer-friendly are the best ways to quell criticism of this thankless job.

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