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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: B.K.Myers who wrote (7221)	7/30/1999 5:50:00 PM
From: B.K.Myers	Read Replies (1) \| Respond to of 9818

Very little has been said about the IRS and Y2K. Most people would love to see the IRS go away, but these same people don't seem to understand the implications of a failure of the IRS. Since the U.S. went off of the gold standard, the U.S. dollar is now backed up by our government's ability to collect taxes. The majority of taxes are collected by the IRS. I don't have the actual percentage in front of me right now, but as I recall, the IRS collects about 85% of the federal government's revenue. You can check this by looking at your 1040 tax package. There is a chart that shows where the government revenue comes from and where it goes. If the IRS fails because of Y2K, how will the government collect taxes to support the dollar? They will have to get the revenue from a source other than income taxes. The gasoline tax comes to mind first. There is already an gas tax infrastructure in place to handle this, but how much will they have to increase the tax to make up for the loss of income tax revenue? Of course, there is a physical limit on how high they can raise gas taxes. Most gas pumps are not equipped for a gas price over $9.99. Remember the problems that gas stations had when the price of gasoline reached $1 per gallon. Most pumps were designed to handle prices up to $0.99 per gallon. Then there is the matter of social security. Current social security payments are made from current revenues. Again, you can see this if you look at the chart in the 1040 tax package. No tax revenues, no social security payments. The IRS was originally scheduled to be Y2K compliant by January 31, 1999. irs.ustreas.gov IRS Year 2000 Project Goals and Overview The Year 2000 project goals include:  All IRS in-house applications, production systems software and purchased commercial packages will be Year 2000 compliant by January 31, 1999.  IRS applications will be analyzed, upgraded, tested and transmitted to production according to a well-defined phased deployment schedule.  The Year 2000 Conversion Project will minimize disruptions to ongoing maintenance, ensure positive customer relationships and prevent tax processing production errors. ---------------------------------------------------------------------- Only recently have they made any statement about their Y2K preparedness progress. dailynews.yahoo.com Commissioner: IRS Over The Y2K Hump John Moore, ZDNet The Internal Revenue Service has put the "biggest part of the most serious risk" behind it as the agency nears the final testing stage of its Year 2000 remediation effort, according to IRS commissioner Charles Rossotti. Rossotti, who spoke Thursday at the National Press Club, said testing of converted systems is underway and that the last phase of testing is slated to begin Oct. 1. The "tax system will continue as the century changes," he said. By the time it wraps up the conversion, the IRS will have spent nearly $1 billion in bringing its systems into Year 2000 compliance. That kind of investment, however, has prevented the agency from replacing computer systems that date to the mid 1960s. "In recent years we haven't implemented any new systems, as we consumed most of our technology resources fixing the Y2K problem," Rossotti said. 'Accelerated' Progress In 2001/2002 But Rossotti predicted that in 2001 and 2002 the IRS should experience an accelerated rate of progress. The agency already is establishing a long-term plan for replacing its antiquated computers. Much of that work will fall under the IRS' Prime Alliance contract, which was awarded to Computer Sciences Corp. (NYSE:CSC - news) late last year. Rossotti calls the upgrade "the biggest, toughest computer business systems replacement project that I have ever seen." But Rossotti is no stranger to managing systems integration tasks; he was a top executive at integrator American Management Systems Inc. (Nasdaq:AMSY - news) prior to joining the IRS in November 1997. In other remarks, Rossotti said that the IRS will create more options for filing tax returns via the Internet and "put a process in place" for dealing with small businesses that may be unable to file a return because of Y2K glitches. He says he will make sure the agency deals with such cases in appropriate ways without making Y2K an excuse for not filing on time. ---------------------------------------------------------------------- They are now scheduled to begin the final phase of testing on October 1. What happened to their schedule of being fully Y2K compliant by January 31, 1999? The IRS has failed in past attempts to upgrade their system. Now they want us to believe that they are going to have their system ready by 1/1/2000. Let's hope so, because if they aren't ready, you can expect to see the value of the U.S. fall dramatically. What good will all of those dollars that we have come to love be if the U.S. can't back them up? B.K.