IRS computer problem costs hundreds of millions

[MORTARDUDE]

http://www.commercialappeal.com/mca/...847353,00.html


Have been retired from the IRS for 2 years and nothing has changed.

>>>>>>>>>>>>>>>>>>>>>>.

IRS computer problem costs hundreds of millions

Screening for fraudulent claims lagging because contractor failed to deliver update

By Mary Dalrymple
Associated Press

July 16, 2006
WASHINGTON -- The Internal Revenue Service cost the government $200 million to $300 million this year because a computer program that screens tax returns for fraudulent refunds wasn't operating.
The tax agency said Friday that a contractor promised to deliver by January a new version of a program, used since 1996, that searches for signs of fraud in every tax return claiming a refund.


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The contractor, Computer Sciences Corp., did not produce a working program by the deadline, and IRS officials could not put the old program back into operation in time for this spring's tax filing deadline.
As a result, the IRS has stopped only 34 percent of the fraudulent refund claims that it had caught by this time last year, the tax collectors said. It estimates the loss to the government at $200 million to $300 million.

IRS Commissioner Mark Everson said the performance of the IRS and the contractor "were insufficient and are unacceptable." He said the IRS did not make the problem known earlier so as not to "provide a roadmap for those who would game the system."

Everson said he is reviewing the agency's options with the contractor and has punished or fired IRS employees. The IRS instructed the contractor to stop work on the new program and restore the old program before taxpayers file their 2007 returns.

The IRS has spent almost $21 million on the project.

Computer Sciences Corp. issued a statement Friday saying the company is working with the IRS to make sure the old system works before taxpayers file their returns next year.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said the IRS should not have trusted a contractor that repeatedly missed project deadlines, eventually costing the government millions. "That's money down the drain," he said.

The panel's top Democrat, Sen. Max Baucus of Montana, said the country cannot afford to have the IRS add to the billions of taxes that go uncollected every year. "They need to end this pattern of waste and complacency that costs honest taxpayers so much money," he said.

The tax collectors have other methods of detecting and stopping fraudulent refund claims. It compares information reported on tax returns with other government records to look for improperly large refund claims. It also tracks returns filed by prisoners to find inmates who file false returns claiming refunds.

An identity theft program helps catch returns filed with improper Social Security numbers. The IRS also keeps tabs on the Social Security numbers of deceased taxpayers to curb fraud.

[SuperScout]

I think Sen. Baucus got it only partially correct: we can't afford the IRS, period. Our entire tax code is archaic at best, punitive, arbitrary, capricous, and unworkable. Time to replace it with the FairTax Plan.

I find very little comfort in the statement that the IRS keeps track of ssn's for dead people, yet employers can't get any decent data from either the SSA or IRS about potential employees.

[Advisor]

Question: Why did the IRS pay anything until the system was delivered?

[SuperScout]

Can you spell 'dumbass'? You're absolutely keerect in the common sense approach to not paying for something until the contract is fulfilled. The people who should have been fired, or as I prefer it, terminated, were the people who approved cutting the check to CSC before provisions of the contract were met.

CSC is an Austin-based company, not really known for high levels of either integrity, work ethic, innovation, or meeting deadlines. Their corporate offices in downtown Austin ended up costing the taxpayers of that bastion of bedwetters several millions $$, while the owners of CSC laughed all the way to the bank. I just think they found another sucker, this time the IRS, and are still miling the cow.

[Boats]

That's right and now the issue of whose paying for it will result in less VA money for vets. We didn't cause the problem but we will suffer because of their stupidity.

[SuperScout]

Happily, that's not the way our goernment works! Just because some agency operates with the IQ of a box of used hair doesn't automatically mean that veterans start getting stiffed. But I do think tht agencies that incur a loss as was demonstrated by the stupidity of the IRS should have their budget reduced appropriately; that same argument would apply doubly to FEMA.

[MORTARDUDE]

Anyone on here who knows how the federal government works with contractors, can understand the situation....Many times the salesmen would come thru promising the Moon, if you wanted it. Many months later, when it came time to implement the sytem or software, you found out ( many that had been in IT for any length of time weren't surprised.. ) that the promises were bullshit and any enhancements would cost more and then wouldn't work anyway..... I guess I just became a burnout and skeptic...but 32 years in IRS IT will do that to you....

Larry