Glitches Galore; Next Year May Be No Better : The IRS in Fresno--Computer Disaster
Murphy’s Law bogged down the Internal Revenue Service this year as the agency introduced two high-speed Univac computers to process federal income tax returns.
The General Accounting Office, the investigative arm of Congress, listed numerous instances to prove that if something can go wrong, it will, and did. But prospects for improvement may be endangered by drastic budget cuts in the next tax season, a new GAO report warned.
The GAO findings were released in a report on delays that plagued processing this year at IRS centers in Fresno and Austin, Tex., the first two of 10 centers studied nationally.
The Fresno office this year processed a record crush of 21 million returns from California and Hawaii.
Looming budget cuts could aggravate attempts at improvement, the GAO said.
“Fresno has been informed by the national office that the division’s budget for the next fiscal year will be reduced by 20%. This reduction will require belt-tightening and possibly the elimination of some activities. To date, no decisions have been made on how the cost reduction will be handled.”
Among findings:
- The IRS bought inadequate software for its new computer system, and human errors compounded the technical malfunctions.
- Computer programs that were expected to take five hours to run actually took 24 hours. Interrupting a computer in the middle of a task sometimes meant it would have to be started again because the software could not accommodate the break.
- Disc drives for storing computer data did not fit for the first few weeks, and dropped information when they became overloaded. The computer failed to number its documents, complicating the task of locating them.
- Computer operators were unprepared for the vast technical changes. Some workers trying to enter tax data pressed a button that told the computer to stop processing.
The IRS learned of the mass errors when taxpayers complained about repeat billings for taxes they had paid, a situation that forced the agency into a time-consuming search for the unprocessed information. Taxpayers charged that the Fresno and Austin centers then began shredding thousands of inquiries from businesses about the disputed taxes before the issues were resolved.
Fresno officials defended their action, saying letters were destroyed only after the IRS decided that the matter was closed. But workers operating the computers then incorrectly sent refunds to some of the businesses, adding to the confusion, and the IRS had to devote more time to figuring out what went wrong.
The GAO did not approve of the mass destruction of letters, but concluded it was a minor problem compared to the computer “glitches.”
Looking ahead to the next tax season, the GAO predicted that it would take another season to work out the computer bugs and human errors that caused last season’s backlogs.
The Fresno office will be aided somewhat by the transfer of 3.5 million returns from the Sacramento area for processing in Ogden, Utah, cutting the projected workload to 19.5 million returns.
