IRS Uses 40-Year-Old Data Processing System

The Commish recently addressed the National Press Club to discuss some of the IRS’ major deficiencies and how the agency is overcoming them by never being satisfied with the status quo:

[T]he germination of any idea…the cultivation of a concept…is only the beginning. Then, begins the real work of teasing it into life, and growing it. And that process never ends. It’s one of continuous improvement.

~IRS Commissioner, Douglas H. Shulman

The speech is long, and my attention span is not.  If you want to read the whole thing, here is the link.  But there was at least one interesting point that I want to share having to do with technology.  In my experience, small tax problems can become bigger when IRS technology is not up to par.  I have always said that the IRS has been behind the curve when it comes to technology.  Even the strides that have been made recently to appear tech savvy seem to have been more for show than anything.  I’m referring to changes that have been made to the IRS website and their entry into YouTube and social media.

Well, it turns out I’m even more correct than I thought.  Shulman says that the IRS uses the same basic data processing system that was used in the 1960s.  Here’s why (according to the Commish) the IRS has not made a comprehensive technology upgrade:

  • The IRS believes in the philosophy “if it ain’t broke, don’t fix it.”
  • The IRS relies on a complicated hodgepodge of new and old computer systems (so it’s not ALL old)
  • The IRS hasn’t been able to get the funding they need to make a comprehensive upgrade

So, which is it?  Is it because they don’t get enough funding, or is it because they are satisfied with the way the 40-year-old technology works?  I suppose it’s both.  The amount of funding is never quite enough to do any kind of comprehensive technological overhaul, and when they do get some money, they (quite correctly) spend it on whatever is broken regardless of how old or new it is.

Leave a Reply

Your email address will not be published. Required fields are marked *