The IRS can’t supervise a software project to save its life (see The Picket Line , , and ).

The latest snafu concerns the agency’s electronic fraud detection system. A new version was supposed to be up and running by the time ’s tax returns started rolling in, so the IRS shut down their old version of the software and didn’t bother updating it for ’s returns.

As it turns out, things didn’t go so smoothly. The new software, which the IRS paid more than $20 million for, still isn’t ready.

Congress stumbled on this accidentally while they were investigating a related issue — that the IRS was improperly freezing refunds owed to low-income tax filers without proper notification and procedure. Senator Chuck Grassley said that the IRS failed to properly oversee the project and relied on inaccurate reports from the contractor about the project’s status.

“Despite known inaccurate reporting, it is our understanding that the IRS is still working with that same contractor today,” Grassley said…. “The result of this project is that the EFDS has been greatly compromised, with substantial tax dollars lost.”

By substantial, he means at least $200–$300 million. “The agency has stopped just 34 percent of the fraudulent refund claims that it had caught by .”

Who is this contractor that is gumming up the works at the IRS? Why, it’s “Computer Sciences Corporation”* — the same contractor the IRS dropped for similar failures in implementing their Integrated Financial System a couple of years ago.


* Although Computer Sciences Corporation is primarily an information technology company, as its name indicates, in , right at the dawn of the Iraq War, it acquired DynCorp, “one of the largest private military contractors in the world” that has contracts in, among other places, Afghanistan and Iraq as well as in the more aggressive foreign version of the U.S. drug war (for instance, spraying herbicides over South American coca crops). It was DynCorp’s employees who, as part of logistical support for the NATO intervention in Bosnia, were caught buying women and girls for sexual slavery. It makes billions on government contracts, and shovels back millions more through lobbyists and campaign contributions.

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