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You are here: Home / Politics / Biden Administration in Action / Excellent Read: Why does the IRS need $80 billion?…

Excellent Read: Why does the IRS need $80 billion?…

by Anne Laurie|  August 10, 20229:47 pm| 66 Comments

This post is in: Biden Administration in Action, Excellent Links, Show Me On the Doll Where Rahm Touched You

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A must-read from @crampell. The IRS’s computer systems are out of date and patched together, in effect, with duck tape

This funding, which is locked for a decade, will provide the IRS the budget certainty it needs to upgrade systems – and improve servicehttps://t.co/YtLgMZuhwp

— Chuck Marr (@ChuckCBPP) August 9, 2022

Bit late in the evening for such a serious topic, but maybe our resident IRS expert will have the chance to see it. Lots of ‘interactive’ photos in this piece — worth clicking over to read the whole thing:

… As of July 29, the IRS had a backlog of 10.2 million unprocessed individual returns. Blame the pandemic, sure, but also the agency’s embarrassingly outdated, paper-based system, which leaves stacks and stacks of returns cluttering shelves, hallways and even the cafeteria.

On the Pipeline, paper tax returns aren’t scanned into computers; instead, IRS employees manually keystroke the numbers from each document into the system, digit by digit…

Taxpayers are trapped in this time warp because Congress has systemically underinvested in the IRS. Its funding was cut for most of the past decade, despite the agency receiving evermore responsibilities: stimulus checks, child tax credit payments, Obamacare enforcement, foreign bank account tracking and, lately, hunting down Russian yachts. Without reliable, long-term funding guarantees, the IRS has struggled to upgrade its systems.

I recently took a (chaperoned) tour of the Pipeline, which is usually off-limits to journalists. Imagine Willy Wonka’s secretive chocolate factory, but instead of gumdrops and lollipops it’s … paper. Everywhere, paper…

A single lap through this facility’s Pipeline is about a quarter-mile. The IRS warns on its website that the whole process can take six months or more. And that’s if no errors are detected.

Treasury and IRS officials say they hope additional funding will allow them to automate more of this process, so returns can move through more swiftly. They’re not particularly worried about employees getting displaced by automation; about a third of IRS employees are already eligible for retirement. There’s also more than enough work to go around. (See: that 10.2-million-return backlog.)

In the meantime, it’s astonishing that the system has survived this long, since it seems to be held together with duct tape and string. When I mentioned this to Desselle, the mailroom manager, he corrected me.

“That’s too generous,” he said. “It’s more like Scotch tape and string.”

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Reader Interactions

66Comments

  1. 1.

    Dangerman

    August 10, 2022 at 9:53 pm

    Woohoo! No more 5 and quarter floppies!!

  2. 2.

    bbleh

    August 10, 2022 at 10:03 pm

    I will observe for the record that, although my return was filed on time and was received, (1) my multi-$K refund has not arrived, (2) none of the automated IRS systems can even verify that my return exists, because (3) by several accounts, they have only just begun processing 2021 paper returns.

    I wonder if they’ll pay me interest.

    (Adding that, if a little delay is the cost of auditing the bejeezus out of a couple hundred Trump-like tax cheats, by all means take all the time you need folks!)

  3. 3.

    dr. bloor

    August 10, 2022 at 10:05 pm

    Once my incredulity subsided over seeing that much actual paper committed to processing tax returns AD 2022, I am left wondering (a) who chose that artwork, and (b) what the hell is a flat screen doing there?

  4. 4.

    Ohio Mom

    August 10, 2022 at 10:08 pm

    Any time I hear the tired Right-wing trope that government should be run like a business — the subtext of course being, no business would spend so profligately — my reaction is always, What business does not pay careful attention to its income, and collect every penny due it?

  5. 5.

    cmorenc

    August 10, 2022 at 10:11 pm

    It’s obvious how much greater the risk is for taxpayers to submit paper rather than electronic returns, if IRS employees are keystroke-copying item by item each line in paper returns.  That kind of mind-numbing work hour after hour, day after day is inherently guaranteed to produce errors.

  6. 6.

    Ohio Mom

    August 10, 2022 at 10:13 pm

    @dr. bloor: There are no windows in that room, don’t begrudge two mediocre pictures of flowers.

    And at least the TV isn’t playing Fox News. Maybe it is used for training sessions?

    P. S. Don’t blame Ohio Family, we file electronically.

  7. 7.

    Mnemosyne

    August 10, 2022 at 10:14 pm

    I spent two and a half hours on hold with the IRS so they could tell me that I had entered my and my spouse’s Social Security numbers in the wrong order when I made my five-figure online payment, and that was why I got a letter saying they hadn’t received my payment. The very tired agent on the other end fixed it in about two seconds.

    Let’s not even get into the sexism of deciding that my husband is the “primary taxpayer” on our joint tax return, so if I enter my own SSN first, the system can’t find the payment.

    So. Yeah. They need some help over there.

  8. 8.

    Gvg

    August 10, 2022 at 10:15 pm

    25 years ago a similar situation was described to me as existing in the VA. A veteran gave up and left for another job and said it was intentional, that republicans were deliberately underfunding the agency so vets would give up on getting their earned benefits. I have heard, but not as directly, that immigration is even worse. It’s a way to not be as obvious about attacking something.

    That should be a repeated theme in ads. Look at what they are willing to fund for real. That is what they are for. If they say they are for vets, or schools, or their own state but never spend anything, are never willing to tax for something…they are lying. Follow the money.

  9. 9.

    Another Scott

    August 10, 2022 at 10:15 pm

    I heard a bit of some House committee vote on the bill today. Some GQPer offered an amendment to the bill that would require that every one of the new IRS agents hired have a CPA. So that they have the qualifications to do their jobs of examining returns. Because apparently only CPAs can read the tax code and check math entries.

    Someone pointed out that there’s already a shortage of CPAs at the big accounting firms and elsewhere, so it seems unlikely that there would be enough CPAs available anytime soon to fill the positions.

    Guess we might as well not hire the agents if we can’t hire CPAs, amirite?

    (groucho-roll-eyes.gif)

    The amendment (like many others) was defeated 4:9.

    (Also note that most of the new IRS employees will not be “agents” – the GQP is intentionally using that term to scare people.)

    C-Span has the video and machine transcript. The exchange starts around 4:33:34.

    Cheers,
    Scott.

  10. 10.

    schrodingers_cat

    August 10, 2022 at 10:16 pm

    I filed electronically and got my refund within a week.  My taxes are not super complicated. But not just an EZ form either.

  11. 11.

    phdesmond

    August 10, 2022 at 10:17 pm

    @bbleh:

    they’re required by statute to pay you interest after a period like 60 days.

  12. 12.

    Danielx

    August 10, 2022 at 10:20 pm

    @Mnemosyne:

    Haven’t seen you for a while, hope you’re doing well!

    Also too, Social Security Administration customer service: compare and contrast with IRS customer service.

  13. 13.

    Alyx

    August 10, 2022 at 10:22 pm

    “(b) what the hell is a flat screen doing there?”

    Flat screens are not that expensive and are part of meeting and message systems in gov’t agencies, and are relatively simple purchases rather than complex system changes.  At some point that room was a cafeteria.  TV screens in places like elevator banks and cafeterias can broadcast the agency-wide Big Brother govt messages that are routine and can become breaking news or can be used to broadcast “all hands meetings” that happen in some other room.

  14. 14.

    bbleh

    August 10, 2022 at 10:22 pm

    @phdesmond: Really? Woohoo! Who knew that the IRS was a positive investment?

    (“Damn, I wanted an IRA but instead I typed IRS! I’m ruined!”)

  15. 15.

    phdesmond

    August 10, 2022 at 10:25 pm

    @bbleh:

    it’s the equivalent of a certificate of deposit in a bank!  i routinely review my clients’ prior year’s tax return before i meet them to prepare the new one.  if i find i left something out that was beneficial, i cheer them up with the thought of interest on top of the $X refund.

  16. 16.

    different-church-lady

    August 10, 2022 at 10:27 pm

    On the Pipeline, paper tax returns aren’t scanned into computers; instead, IRS employees manually keystroke the numbers from each document into the system, digit by digit…

    Yes. Just last week I discovered that the person who did this very thing with my 2020 return (filed on extension in Oct. of 21) mistakenly placed the amount of my overpayment on the refund line instead of the credit towards ’21 line. If left uncorrected, this would cost me hundreds of dollars in additional taxes.

  17. 17.

    Kayla Rudbek

    August 10, 2022 at 10:28 pm

    @cmorenc: amen to that.  I thought that my agency’s computer systems were/are slow, particularly on my current side of the house which is the red-headed stepchild of the agency, but I would cry if I had to deal with that.

  18. 18.

    HumboldtBlue

    August 10, 2022 at 10:28 pm

    I’m in need of some tax help, IRS owes me at least $4,800, although my idiocy may play a part in that.

  19. 19.

    Jim, Foolish Literalist

    August 10, 2022 at 10:31 pm

    Please be true! Please be true!

    Noah Shachtman @NoahShachtman

    NEW: Trump asks allies: which one of you is a “rat” for the Feds, and which one of you is “wearing a wire”?

  20. 20.

    bluejersey43 (fka texasboyshaun)

    August 10, 2022 at 10:32 pm

    I don’t think most Americans realize what a BFD this is. For 40 years now the GOP has bleated that government is incompetent, then starved government services at all levels to prove their point. This $80 billion is Biden building back better, whether we call it that or not. A robust and efficient bureaucracy that is fair and constituent-friendly is critical to the strength of the state. Without a strong state our democracy can’t fight off challenges from fascism and other demons.

  21. 21.

    mrmoshpotato

    August 10, 2022 at 10:33 pm

    @Dangerman:

    Woohoo! No more 5 and quarter floppies!! 

    Back to 8″ floppies!  OLD school!

  22. 22.

    JCJ

    August 10, 2022 at 10:33 pm

    @Dangerman: Old joke – do you know how women and computers are different?

     

    A woman will never accept a 3 1/2 inch floppy

  23. 23.

    bluejersey43 (fka texasboyshaun)

    August 10, 2022 at 10:34 pm

    @Ohio Mom: Exactly. If Walmart can throw someone in jail for stealing a DVD, then the government surely has even more standing to seize assets of willful tax cheats.

  24. 24.

    SiubhanDuinne

    August 10, 2022 at 10:38 pm

    @Jim, Foolish Literalist:

    OMG, that is as cray as I’ve seen — and lemme tellya, I’ve seen some craaaaaay shit in my time.

  25. 25.

    kalakal

    August 10, 2022 at 10:39 pm

    @mrmoshpotato: When floppies really were floppy, none of that plastic casing in the good old days

  26. 26.

    phdesmond

    August 10, 2022 at 10:39 pm

    @HumboldtBlue:

    i would at least hear you out, if only to cluck and tsk sympathetically.  ask management to send us each other’s email addresses.

  27. 27.

    Jim, Foolish Literalist

    August 10, 2022 at 10:40 pm

    speaking of the IRS

    Lily Adams @adamslily

    CNN: Yellen directs IRS not to use new funding to increase chances of audits of Americans making less than $400,000

  28. 28.

    prostratedragon

    August 10, 2022 at 10:43 pm

    Reports are still anonymous and nebulous, but it has been said that FBI agents were at the PA Capitol in Harrisburg today, delivering subpoenas in connection with the fake electors scheme. Not clear whether any are targets, or just people wanted for testimony.

  29. 29.

    kalakal

    August 10, 2022 at 10:46 pm

    @Jim, Foolish Literalist:  I really hope he’s been watching this

    https://youtu.be/GcVSC-BgTww

  30. 30.

    different-church-lady

    August 10, 2022 at 10:47 pm

    @Jim, Foolish Literalist: “Oh. Uh… it’s me, Boss. Is that bad?”

  31. 31.

    Jim, Foolish Literalist

    August 10, 2022 at 10:47 pm

    @Jim, Foolish Literalist: I’m not a huge fan of the Lincoln Project. I think 2020 showed their bark is significantly more notable than their bite. Never sent them any money and don’t encourage anyone else to do so, but this ad is kind of funny just for the line about Eric.

  32. 32.

    Ohio Mom

    August 10, 2022 at 10:49 pm

    @bluejersey43 (fka texasboyshaun): Haven’t seen you in a while (then again, I haven’t been keeping up with every thread). How is life treating you?

  33. 33.

    opiejeanne

    August 10, 2022 at 10:49 pm

    @dr. bloor: The tv is there because it’s the cafeteria.

    The business about doing this all on paper and typing out every bit of info, even for the e-filed docs, that reminds me of the reaction after September 11, 2001, about the CIA and FBI not using the computers they had and doing everything by hand on paper in manilla folders.

  34. 34.

    BruceFromOhio

    August 10, 2022 at 10:51 pm

    “That’s too generous,” he said. “It’s more like Scotch tape and string.”

    The billionaires have decreed it thus, and so shall it be.

  35. 35.

    NotMax

    August 10, 2022 at 10:52 pm

    with duck tape

    Sigh. ::head/desk::

  36. 36.

    HumboldtBlue

    August 10, 2022 at 10:55 pm

    @phdesmond:

    himboldtblue65 at gmail

  37. 37.

    Omnes Omnibus

    August 10, 2022 at 10:56 pm

    @Mnemosyne:  The IRS considers the primary taxpayer to be the one listed first on the return.  The other is the spouse.  It does not matter if the first name listed is male, female, or nonbinary.

  38. 38.

    Feathers

    August 10, 2022 at 11:01 pm

    I’ve been in that cafeteria! At least if it’s the one in the DC headquarters. Going to read the article next time I’m at the library.

    I have a relative who works there and went over for a visit and lunch. The workforce is very old. We’re early 50s and definitely on the younger side. Apparently the IRS has scooped up COBOL programmers when the phone companies and other mainframe era corps laid them off. But they aren’t really making new COBOL programmers.

    Was at a discussion with an MIT computer science prof back after the dot com crash who talked about the problem of programs like the IRS and the SABRE airline reservation system that really needed to be written in something closer to assembly language than C and C+. His vision was for some sort of specialized PhD program at MIT/CalTech that would produce a small number of people specializing in writing insanely complicated large systems. Basically you’d come out of the program to work for the government or government contractors. No idea if he was full of shit or not, but people doing government programming I know have thought it made some sense.

  39. 39.

    Bill Arnold

    August 10, 2022 at 11:05 pm

    @Jim, Foolish Literalist:

    Trump asks allies: which one of you is a “rat” for the Feds, and which one of you is “wearing a wire”?

    A delicious part is that Trump, though … slow, is getting much more paranoid. This will cause more mistakes on his part.

  40. 40.

    Hoppi

    August 10, 2022 at 11:06 pm

    @NotMax That is the trade-marked original name from the 40’s – water ran off it like a duck’s back.  “Duct” came later to avoid trademark issues, and obviously because of its later civilian use.

    (nym should be Hoppie  – fat finger syndrome)

  41. 41.

    Daddio7

    August 10, 2022 at 11:07 pm

    @bbleh: Do not let them owe you money, make sure you owe them a few thousand. Your return will go to the head of the line.  Always works for me.

  42. 42.

    different-church-lady

    August 10, 2022 at 11:14 pm

    Look, let’s try to focus here, folks: why do I need $80 billion?

  43. 43.

    bluejersey43 (fka texasboyshaun)

    August 10, 2022 at 11:20 pm

    @Ohio Mom: The change of scenery has done wonders for me. I’m slowly but steadily coming out of the burnout– I’m actually able to work 4 days in a row again!

  44. 44.

    Ken

    August 10, 2022 at 11:30 pm

    @Ohio Mom: What business does not pay careful attention to its income, and collect every penny due it?

    Ones that are being set up for a bust-out. We are, after all, talking about the right-wing idea of how to run a business.

  45. 45.

    Ohio Mom

    August 10, 2022 at 11:30 pm

    @bluejersey43 (fka texasboyshaun): Happy to hear that — keep taking good care of yourself!

  46. 46.

    gene108

    August 10, 2022 at 11:30 pm

    @Jim, Foolish Literalist:

    Red a Twitter post about that pointing out how fuck nuts crazy it is Republicans are saying people who honestly answer the FBI’s questions are “rats”. Tweet also pointed out it’s illegal to lie to the FBI.

  47. 47.

    Brachiator

    August 10, 2022 at 11:32 pm

    Taxpayers are trapped in this time warp because Congress has systemically underinvested in the IRS. Its funding was cut for most of the past decade, despite the agency receiving evermore responsibilities: stimulus checks, child tax credit payments, Obamacare enforcement, foreign bank account tracking and, lately, hunting down Russian yachts. Without reliable, long-term funding guarantees, the IRS has struggled to upgrade its systems.

    I mentioned this in a post a couple of days ago. I know of tax clients who received their state refunds long ago who cannot get the IRS to even acknowledge that they have received their federal returns. The IRS is somewhat transparent about these problems. They have to report on them regularly, and have done so, but not about the full extent of what a disaster tax processing has become.

    But the IRS also got some additional funding with the March spending authorization.

    For the IRS, the CAA includes $12.6 billion, which is $675 million more than last year. This includes $221 million for the Taxpayer Advocate Service, of which $5.5 million must be used for identity theft and refund fraud casework. An additional $5.4 billion will fund tax enforcement, which includes $21 million to fund investigative technology for the Criminal Investigation Division and $75 million to address the IRS’s paper inventory of amended returns (an additional $5 million is earmarked for this under the operations support budget). Operational support will receive $4.1 billion. The CAA also includes $275 million for business systems modernization.

    This didn’t help much.

    People at the IRS are working their tails off, but some problems are cascading and creating additional issues. If you go online and try to verify some tax year 2020 information, you might still run into problems even if you efiled a simple return. Tax year 2019 seems to be the latest year that has good processed information.

    And of course, the Republicans don’t care if the IRS continues to stumble. But this is just insanity. The Trump tax bill had some errors and the IRS was instructed to come up with some appropriate regulations to handle the situation, but of course they had problems because of under-staffing.

    I wonder if they’ll pay me interest.

    In many cases, the answer is yes.

  48. 48.

    JaneE

    August 10, 2022 at 11:32 pm

    @Dangerman: they may be on cards, or 8 inch floppies.

  49. 49.

    Ken

    August 10, 2022 at 11:33 pm

    @Jim, Foolish Literalist: Obviously we’re all rooting for a long prison term, but I guess I’d be OK with Howard Hughes style paranoid isolation (urine collection optional) — it’s like solitary confinement in prison, except self-imposed.

  50. 50.

    Ken

    August 10, 2022 at 11:37 pm

    @prostratedragon: Not clear whether any are targets, or just people wanted for testimony.

    Ah yes, the old “helping us with our inquiries” line.  Does anyone know whether they tell the recipients of the subpoenas which category they’re in?  I could easily imagine they’ve found that uncertainty is more productive.

  51. 51.

    Gin & Tonic

    August 10, 2022 at 11:38 pm

    @Feathers: People who get a CS PhD from MIT will want to work for an employer who pays a lot more than the IRS can.

  52. 52.

    JaneE

    August 10, 2022 at 11:41 pm

    If you e-file and don’t have errors, your return will be processed in a couple of weeks, so there are some more up to date systems but if you still use paper a time warp sets in.

  53. 53.

    Peej01

    August 10, 2022 at 11:53 pm

    I’m one of those paper filers who is still waiting for my refund.  I know COBOL and I’d be happy to go to work for the IRS as long as I can do it remotely.

  54. 54.

    kalakal

    August 11, 2022 at 12:00 am

     

    @Peej01:  heh

    I know COBOL and I’d be happy to go to work for the IRS as long as I can do it remotely.

    me too

  55. 55.

    Feathers

    August 11, 2022 at 12:05 am

    @Gin & Tonic: The idea would be that the govt would fully fund the program and that people going into it would know the deal. Also that it could be a mid career thing. Someone who wanted to program hard core but also live a 9 to 5 life and raise a family. That these people would get paid NSA cryptographer rates was also a given.

  56. 56.

    Feathers

    August 11, 2022 at 12:08 am

    @kalakal: Patent examiners work remotely. You need to do a two year training program in DC, but after that you can live anywhere in the US with broadband access. You have to have a STEM degree with at least Calculus 2.

  57. 57.

    kalakal

    August 11, 2022 at 12:19 am

    Hmm. All my qualifications are English. Of the relevant(ish) ones I’ve got the equivalent of an Msc in Chemical Engineering. That involved a fair amount of calculus. What’s calculus 2?

  58. 58.

    SeattleDem

    August 11, 2022 at 12:55 am

    I’m always amused by the cry that there are no COBOL programmers left. When I was a young pup out of work and had a line on an IT job that required COBOL, I borrowed a manual and learned it over the weekend. Once on site, I spent 30 years learning another couple of hundred programming languages and dialects, like all other programmers. HR thinks they are all different; real programmers know that there are only  about 5 really distinct languages and all the others are just derivatives of the basic concepts of those few types.

  59. 59.

    different-church-lady

    August 11, 2022 at 1:13 am

    @SeattleDem: One would think if there were a demand for it… say, if a very large government agency was in need of programmers fluent in that language… then some people who were good at programming languages would learn it.

    But that’d be silly, I suppose…

  60. 60.

    Urza

    August 11, 2022 at 1:24 am

    @Peej01: Exactly how many COBOL systems have you ever known to be available to work on remotely?  I mean, its possible, but most likely its kept offline just for security purposes, let alone the ancient hardware its probably running on.
    Hate to be a cloud evangelist, but they could literally write the code in whatever new language, run it on any of the major cloud providers, probably cost less to have it all done by April 20th for everyone that was on time than it would be to buy new servers.  Paper scanning obviously would take longer and late filers, but that wouldn’t require much of any processing power in comparison.  Someone could probably setup a good OCS conveyor belt to scan in all the paper as fast as they get it once the backlog is done.  Would cost a few million but long run thats cheaper than people who would hate their lives for entering all that manually.

  61. 61.

    Urza

    August 11, 2022 at 1:27 am

    @different-church-lady: No, there would be no demand.  COBOL is ancient, shit awful to use and learn in modern times, and if no one using it pays well you may as well learn a other languages that would pay triple and quadruple as much when leaving college.  Someone ‘could’ learn it, but that would require HR to realize that people don’t need 10 years experience in a thing in order to do it, even if that thing is only 5 years old.  A classic issue with IT HR.  COBOL is obviously very old, but @SeattleDem is right, anyone could learn if IF they had reason, they just don’t for a government salary.  Plus, what if the IRS and airlines actually got their act together and switched.  Then you’ve got a useless skill and no one at all to hire you.  Banks used to use it but they all moved on decades ago.

  62. 62.

    Ruckus

    August 11, 2022 at 1:46 am

    @Gvg:

    “Follow the money”

    100% of the time.

    Money is the only thing that conservatives are trying to conserve. And not money for everyone, money for them and their sponsors.

  63. 63.

    bjacques

    August 11, 2022 at 4:59 am

    One IRS department that works great is their check cashing department. I’ve faithfully filed paper returns every year since I left the States 20-*cough* years ago, though the Foreign Earned Income Exclusion (2555-EZ) meant I’ve never owed anything. I never got the hang of e-filing. Maybe next year…

    Last year I got laid off after 22 years with a big severance package at the end of a year of full employment. I duly filed and cut the IRS a check. Man, that money left my account faster than a Ukrainian HIMARS seeking a Russian ammo dump! I had to file a FUBAR too, online. but that was really easy.

  64. 64.

    Gvg

    August 11, 2022 at 7:02 am

    @NotMax: There is a brand of duct tape that is named duck tape because I assume people insist on calling it that. Also most people don’t know what a duct is or why it would need tape and in fact I have noticed most AC tech now use a much better insulated tape, not the old duct tape….so duct tape is not used on ducts anymore.

  65. 65.

    PaulB

    August 11, 2022 at 8:28 am

    @bbleh: I wonder if they’ll pay me interest.

    They will. I submitted my paper return in early March and received my refund a week ago. The refund was $62 more than the figure on my tax forms.

    I was told in June, when I contacted them about my delayed refund, that they hoped to be done with the paper returns in September.

  66. 66.

    Mike in NC

    August 11, 2022 at 11:09 am

    Republicans have dreamed for decades of abolishing the IRS, the ATF, the FBI, the Departments of Education and Energy, and many other federal agencies they would like to simply eradicate or privatize to bring profits to their donors.

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