The IRS Fails at Software Project Management

I noted the difficulty that the IRS was having with its software modernization efforts. Part of this was simple schadenfreude, but I also like to make note of what people are going up against when they go up against the IRS — basically a big, bad monster as rotten on the inside as the old Soviet Union in its dying days.

Anyway, this month’s issue of CIO Magazine goes into more detail about their upgrade trauma:

The Internal Revenue Service’s Master File.… still runs code from , written in an archaic programming language almost no one alive understands. Every year, programmers, some who have worked at the IRS for decades, add new code to the Master File to reflect new rules passed by Congress. As a result, the system has become a high-tech Rube Goldberg machine. Those familiar with the Master File say it is poised for a fatal crash that would shut the government down.…

The first of multiple software releases planned for the new database… is nearly three years late and $36.8 million over budget. Eight other major projects have missed deployment deadlines by at least three months, and costs have ballooned by more than $200 million.…

[This] provides a case study for almost everything that can go wrong managing a large, complex IT portfolio. At stake in this bungled implementation is the IRS’s very ability to conduct timely audits and go after tax evaders, not to mention its long-term goal of delivering customer service on par with private-sector financial institutions. If the Master File crashes, the government would not be able to collect its $2 trillion in revenue or pay for anything, whether it’s Social Security benefits or the bill for new weapons systems.…

Much of the rest of the article is a blow-by-blow account of how the latest of three failed modernization projects began with a bugle call of empowering buzzwords, private-sector know-how, and can-do bureaucratic leaders fresh from the business world — and then began quickly to sink into the morass of bureaucratic infighting and overconfident software engineering shortcuts as increasingly desperate measures were taken to try to bring things under control.

In a Sunday School class at my church, someone told the story of how a wealthy Russian Mennonite long ago avoided serving in the military by hiring replacements. “What’s the difference?” someone muttered. Others in the class agreed. It seemed that in the eyes of God, there would be little difference between serving in the military and paying someone else to serve in the military. “Then why don’t we talk about our war taxes?” muttered another person in the class. “Because that would be too relevant,” was the sarcastic reply.

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