'I. No Plan B At IRS
"Very Thin
Margin Of
Tolerance"
At the end of March 1998, Internal Revenue Commissioner Charles O. Rossotti asked
the Senate Finance Committee to delay implementation of several provisions of a bill
designed to overhaul the IRS. The agency is already overwhelmed by two tasks:
1) Much of 1998 was spent making software changes mandated by the 1997 Taxpayer
Relief Act.
2) The year 1999 must be devoted to testing the Y2K repairs made in 1998 on about
75,000 computer application programs, 1,400 minicomputers, more than 100,000
desktop computers, and more than 80 mainframe computers.
Business Week (Feb. 23, 1998) asked John Yost, the director of the Year 2000 project
at the IRS, if everything will be fixed in time. "I'm not making any promises just yet," he
responded. Mr. Rossotti has set January 31, 1999 as the deadline for fixing Y2K. "We
have a very thin margin of tolerance to make this whole thing work," he told USA Today
(April 2, 1998). He added, "There is no Plan B."
One Of The
Biggest Problems
On September 17, 1998, in his first public address as Chief Information Officer for the
Internal Revenue Service, Paul Cosgrave presented his plans to modernize the agency's
computer systems and improve customer service at the embattled IRS. According to the
September 18, 1998 issue of Federal Computer Week, Cosgrave said his vision for the
IRS includes installing a standardized computer system, organizing a new management
team, lobbying for a larger computer-training budget, encouraging staff to be more
customer-friendly and rewriting the agency's mission statement to include the phrase
"service to taxpayers."
Cosgrave's agenda is in reaction to IRS reform legislation approved during the summer of
1998 to keep the agency on track to modernize its infrastructure. The measure, the most
sweeping reform of the tax-collection agency since 1952, focused mainly on revamping
the IRS to make it more taxpayer-friendly and to curb abuses by aggressive agents,
which are goals Cosgrave said he wants to support by improving the agency's use of
information technology.
One of the biggest problems Cosgrave is dealing with is the Year 2000 problem, which
he said could cause some isolated problems in the 1999 tax filing season. Cosgrave said
he expects some computer problems because "when you're changing so many codes that
need to be tested, there are going to be some problems.''
The extent of the problems, such as erroneously telling a taxpayer that he owes more than
he has paid, should be limited, an IRS spokesman said. Cosgrave said the IRS will spend
close to a billion dollars for its millennium fixes. "It's unfortunately necessary,'' he said.
"We have systems that date back to the '60s.'' Cosgrave said the IRS has 50 percent of
its computer systems fixed for the Year 2000 problem and expects to have at least 90
percent fixed by 1999.
Big Brother, Big
Mess
The history of information technology modernization at the IRS isn't very reassuring about
the agency's prospects for Y2K readiness. On May 15, 1997, the IRS issued "Request
for Comments for Modernization Prime Systems Integration Services Contract" which
was a distress call to private industry to bail out the taxing agency. According to this
document, the IRS has been totally disorganized for years, notwithstanding a
modernization program during the 1980s and early 1990s--which in many ways
exacerbated the situation. "Overall, the IRS computing environment evolved into an
extraordinarily complex array of legacy and stand-alone modernized systems with respect
to both connectivity and interoperability between the mainframe platforms and the
plethora of distributed systems." The IRS has more than 62 million lines of computer
code, three big mainframes, and 60 other mainframes in 10 regional offices. According to
the RFC, "None of the mainframes are century date compliant, thereby necessitating
immediate actions ranging from systems software upgrades to replacement." Thousands
of applications systems are "undocumented," i.e., lost, if they ever existed.
There is no central data base. The IRS "neither maintains the source payment documents
nor posts either detailed transaction-specific payment or tax case information to the
Master Files. Instead, the detailed tax and tax case information is stored on stovepiped
systems with stand-alone databases which, for the most part, are not integrated with
either the Master Files or the corporate on-line system."
In 1988, the IRS implemented the Tax System Modernization (TSM) plan to upgrade
and modernize the agency's technology. The program created stand-alone ("stovepipe")
systems for the 10 service centers based on "the principles of distributed computer
processing, an approach to computing en vogue during the late 1980s and 1990s." The
numerous databases are difficult to synchronize and to manage. The system is breaking
down. Y2K will break it for sure. The IRS observes:
One of the more fundamental and wrong-headed myths concerning Tax Systems
Modernization is the nature of the technical problem: to modernize legacy systems.
Regrettably, the challenge is far more overarching: to modernize functioning but aged
legacy systems which have been nearly irreparably overlaid by and interfaced with a
tangle of stovepiped distributed applications systems and networked infrastructures.
In 1995, the General Accounting Office reported that TSM was a disaster. The system's
multiple computers and databases could not integrate with existing computers. It made the
IRS even less efficient. Congress ordered the IRS to produce a new modernization plan
by May 15, 1997. A seven-volume Blueprint for Modernization was produced and the
Request for Comments was issued. (See the "Today/Target" flow chart.)
The Goal Is To
"Stay In
Business"
The May 1997 RFC document states, "Under the crushing time constraints of the
millennium change," the IRS is working with its current contractors on interim Y2K fixes,
but admits that it "lacks the capacities and capabilities to simultaneously manage the
existing workload and effectively partner with the private sector to commence
Modernization. Any reasonable strategy to move forward, therefore, would focus on
managing the immediate crisis--'stay in business' while building capacity to prepare for
future Modernization."
CIO Was
Worried About
Living On This
Planet
According to the October 17, 1997 issue of the Year 2000 Outlook, an e-mail weekly
service of the Information Technology Association of America (ITAA), Arthur Gross,
who was then Chief Information Officer at the IRS, spoke at their industry gathering in
McLean, Virginia [http://www.itaa.org/year2000.htm]. Apparently, he was as concerned
about his agency's Y2K problem as I surmised from the RFC. He was quoted as saying,
"Failure to achieve compliance with Year 2000 will jeopardize our way of living on this
planet for some time to come."
1997 Taxpayer
Relief Disrupts
Y2K Fix
According to the ITAA account of his candid speech, "Mr. Gross used words like
'massive' and 'numbing' to describe a program which has jumped from three people to
800. With the IRS software inventory 'not fully fleshed out,' Gross said the Y2K
accounting covers up to 70 million lines of code, 95,000 components, and 120 mission
critical systems." Not only does the IRS have to achieve Y2K compliance, but also the
agency must simultaneously change its software to reflect the 1998 and 1999 changes
required by the Taxpayer Relief Act of 1997. He indicated that the IRS was also
preparing worst-case contingency plans that probably "won't be shelfware." Mr. Gross
said the IRS is in a "marathon race" to the Y2K finish line. This is perhaps "the last
opportunity to fix the tax system as we know it. "
Countdown To
Meltdown?
The November 3, 1997 issue of Insight, a publication of The Washington Times,
focused on all the problems at the IRS. One of the stories is titled "IRS Countdown to
Meltdown." The story quoted Arthur Gross telling a congressional commission that
"failure to identify, recode, and retest each of these date-based fields could result in the
generation of millions of erroneous tax notices, refunds, bills, interest calculations,
taxpayer account adjustments, accounting transactions and financial reporting errors. Put
another way, the IRS' capability to carry out its mission could be jeopardized."
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