How you can resist funding the government →
about the IRS and U.S. tax law/policy →
IRS incompetence →
CADE / PRIME / software modernization fiasco
As a tax resister, a software geek, and a promoter of creative citizen sabotage and hacktivism, I couldn’t help but smile and wonder when I read ’s New York Times:
After , a project to replace the Internal Revenue Service’s aging file-keeping computer system with modern technology is so far behind schedule that the I.R.S. has told the prime contractor that unless it improves its performance by , the government may have no choice but to fire it.
The project, which was expected to cost $8 billion when completed, has spent less than $1 billion so far, but it is already 40 percent over budget for what it has done, according to the I.R.S. Oversight Board, an independent watchdog body that Congress created in .
Most taxpayers are younger than the computer system that the I.R.S. relies on to maintain its master files on individuals and businesses — all the records of who they are, where they are, their income, taxes paid, and the amounts they still owe or are owed as refunds.
The I.R.S. says it can still process returns and send out refunds on time, but its dependence on the Assembler and CoBOL computer languages makes it difficult to investigate and resolve taxpayers’ problems.
Finding a record using the existing system can take a week; the new system is supposed to do the job in seconds.
“This is not about a one-time delay,” said Larry Levitan, chairman of the Oversight Board.
“Every single major project under way experienced a significant delay in time and overrun in budget — not two or three out of five, but five out of five.
What we have here is a track record of absolute consistency of cost overruns and delayed deliveries.”…
Five years into the project, some aspects are as much as 27 months behind schedule.…
The I.R.S. went with the same system because two previous modernization attempts, the most recent in , failed, costing taxpayers $4 billion.…
Mr. Levitan… says a collapse is inevitable without a new system, because the few people who could keep the old system functioning are close to retiring.
Now they say “expected to cost $8 billion when completed” but back when the contract was awarded, it was called an “estimated $3 billion, 15-year project.”
This was soon after Congress had cut off funding for the IRS’s previous $3.3 billion attempt in .
The IRS is a crucial organization in that it collects the money that fuels the government.
Currently, it does this at a relatively low price — about $0.50 per $100.00 collected — in no small part because most taxpayers cooperate voluntarily in carrying out the responsibilities that U.S. tax laws impose on them.
Moreover, the collection of taxes forms one of the primary points of interaction between most citizens and the federal government.
Continued cooperation by taxpayers requires that they view the IRS as an efficient organization, capable of expeditiously resolving their problems or answering their questions.
The report went on to say that because their computer systems were so out-of-date and bursting at the seams with more data than they were designed for, and because the IRS’s “customers” expected more data processing efficiency in these new dot.com days, the IRS was failing to be an efficient organization.
Furthermore, they were institutionally incapable of conducting a mature, large-scale software upgrade and migration of the sort that was demanded.
“If they don’t produce we will make a change,” Mark W. Everson, the I.R.S. commissioner, said of the contractor, even though experts at Carnegie Mellon University in Pittsburgh said that starting over with a new company would “probably result in different but no fewer problems along the way” — and delay the new system, which is called the Customer Account Data Engine [CADE], by two or three years.
“I would not enter lightly into rupturing the relationship,” Mr. Everson said.
“It is not a desirable outcome to abandon the relationship, but that does not mean we won’t do that if we have to.”
That the IRS commissioner has been reduced to threatening to replace the head contractor, several years and a billion dollars into the project, is pretty much an admission that they’re screwed again.
And if something has to go, something else has to inflate to fill its gap:
In this case, highway funding.
The White House budget allocated $256 billion over six years for highway funding.
That didn’t last long in the Red-ink Republican Congress — the Senate just passed a bill more than $50 billion fatter.
(The version of the bill being prepared in the House is another $50+ billion fatter than that!)
Interesting post.… engaged in a bit of direct action there, yourself, it seems.…
violating social conventions to actually discuss a method of non-violent civil disobedience.
If a meeting advertises for revolutionaries, it should not be surprised when at least one shows up.
You could still be a wingnut, but such people are often useful, and do not forget your “history of the demise of slavery postings.”
All that change probably required a wingnut or two to leaven things.
Yes, you are a wingnut, and yes you accurately and meaningfully challenged to idiocy with which you were faced at the New College panel.
Isn’t it possible for both choices to be true at the same time?
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.
Tax Updates reports that the IRS’s third attempt at modernizing its computer systems, CADE, is finally up and running — years late and way over budget.
This is the latest chapter in a running reality-comedy show I’ve featured at The Picket Line occasionally before ( and ).
Every year, the Government Accountability Office puts out a “High Risk” list of those government activities that have “greater vulnerabilities to fraud, waste, abuse, and mismanagement.”
This year, the IRS makes the list twice — once for its doomed efforts to modernize its databases (I’ve blogged about this before, see and for instance), and once for its lagging ability to go after tax evaders and resisters:
In recent years, the resources IRS has been able to dedicate to enforcing the tax laws have declined, while IRS’s enforcement workload measured by the number of taxpayer returns filed has continually increased.
Accordingly, nearly every indicator of IRS’s coverage of its enforcement workload has declined in recent years.
Although in some cases workload coverage has increased, overall IRS’s coverage of known workload is considerably lower than it was just a few years ago.
Although many suspect that these trends have eroded taxpayers’ willingness to voluntarily comply and survey evidence suggests this may be true the cumulative effect of these trends is unknown because new research into the level of taxpayer compliance is only now being completed by IRS after a long hiatus.
Further, IRS’s workload has grown ever more complex as the tax code has grown more complex.
Complexity creates a fertile ground for those intentionally seeking to evade taxes and often trips others into inadvertent noncompliance.
IRS is challenged to administer and explain each new provision, thus absorbing resources that otherwise might be used to enforce the tax laws.
Concurrently, other areas of particularly serious noncompliance have gained the attention of IRS and the Congress such as abusive tax shelters and schemes employed by businesses and wealthy individuals that often involve complex transactions that may span national boundaries.
Given the broad declines in IRS’s enforcement workforce, IRS’s decreased ability to follow up on suspected noncompliance, the emergence of sophisticated evasion concerns, and the unknown effect of these trends on voluntary compliance, IRS is challenged on virtually all fronts in attempting to ensure that taxpayers fulfill their obligations.
IRS’s success in overcoming these challenges becomes ever more important in light of the nation’s large and growing fiscal pressures.
Accordingly, we believe the focus of concern on the enforcement of tax laws is not confined to any one segment of the taxpaying population or any single tax provision.
Our designation of the enforcement of tax laws as a high-risk area embodies this broad concern.
Furthermore…
The Commissioner of Internal Revenue has made strengthening enforcement a high priority, but IRS has not yet materially reversed enforcement declines, in large part because unbudgeted expenses and demands for improved taxpayer service have confounded IRS’s intentions.
Enforcement staffing decreased over 21 percent , and individual audit rates are below the levels of , even after recent increases.
IRS lacks current data on the effects of these declines on compliance.
For example, IRS’s estimate of the gross tax gap the difference between taxes owed and taxes paid (over $300 billion) was largely based on extrapolations from data.
Without current information on noncompliance, IRS cannot effectively target its enforcement resources, risks wasting resources by auditing compliant taxpayers, and is impeded in identifying changes to laws or regulations that could reduce noncompliance.
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.”
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.
The IRS is having a rough go of it.
It’s new plan to use private debt collectors is being denounced as a boondoggle, its information technology infrastructure is crumbling in such a way as to have cost them over $300 million in fraudulent refunds it has been unable to retrieve, and it has been caught inflating the numbers of audits of the wealthy by making those audits automated and superficial (and easier to hide assets from).
Oh yeah, and their headquarters is closed due to flood damage.
From time to time I’ve given in to schadenfreude and written up the latest news in the IRS’s long saga of trying to modernize its data processing system.
Gigantic cost overruns and seemingly unstoppable schedule drift have been the norm for years now.
As one recent summary puts it: “The IRS relies heavily on an magnetic tape system encoded with an obsolete computer language to process tax returns.”
USA Today today runs Kevin McCoy’s look at how the IRS gave out $200 million in fraudulent refunds thanks to their software modernization trainwreck.
As the peak of tax season approached last spring, the IRS discovered that a planned upgrade of the agency computer that red-flags potentially fraudulent tax refunds had failed.
The discovery came after the IRS had shut down the older computer.
The failure forced the agency to continue processing tax returns — and issuing refunds — without its first line of electronic defense against fraud.
USA TODAY’s review found that the IRS lacks a comprehensive plan to recover the $200 million, which the agency said represents far less than 1% of all tax refunds.
That means most fraudulent filers who got federal checks in will likely never be caught.
Today, as looms, the IRS is restarting the older computer, because the nearly $21 million planned successor still isn’t operable.
Yowch!
Senate Finance Committee Chairman Charles Grassley, R-Iowa, said the agency’s failure to see beyond rosy projections on the computer project and act on the warnings had hurt millions of Americans.
“There’s a lot of fraudulent tax returns that are filed … and for at least , they’re all going to get off scot-free,” says Grassley.
“And it’s not just that they’re getting off scot-free — it’s that the honest taxpayers become the suckers.”
As someone who has been working in the software field for over a decade now, I’ve got some sympathy mixed with my schadenfreude.
Big software projects are hard.
Big software projects that involve trying to make a modern database out of a bunch of CoBOL written over 40 years ago for a huge government bureaucracy… break out the aspirin.
See The Picket Line , , and for more looks at the trainwreck.
[IRS Commissioner Mark] Everson said there’s little chance IRS will collect the bulk of the erroneously issued checks.
“We’re not going to go back.
… That’s gone,” he said.
“If you look at stopping frauds on refunds, you either stop it upfront, or it’s very hard to get that money.”
Some short bits from recent days:
The site My War Tax purports to calculate how much you, personally, are paying for the Iraq War.
You type in your taxable income for , and the site calculates your bill for you (and lets you know how it made the calculation so you can see if it makes sense to you).
Kat Kanning wrote up the story of the civil disobedience actions that she, her husband Russell, Dave Ridley, and Lauren Canario have been doing at the IRS offices in Keene, New Hampshire, for the Keene Free Press.
NH Insider also did a story on the Dave Ridley case.
And if you’re tired of reading, you can watch an action-in-progress on YouTube.
As Kat Kanning’s article noted, this action was organized and enacted in less than twenty-four hours, and ten local activists attended on short notice.
The U.S. Congress is toying with the idea of shutting down the recently-adopted IRS practice of using private debt collection agencies to hunt down people who don’t pay taxes.
At a hearing, one Representative played a tape of one such private debt collection agency harassing its prey over the phone (here’s a PDF transcript).
The IRS is still having a hell of a time bringing its database into the 21st century. The latest TIGTA audit of the project found that the “pattern of deferring Project requirements to later releases and missing release deployment dates has continued” with yet another over-budget missed deadline and with requirements radically scaled-back at the last minute (some of these requirements have been deferred for over five years now).
A couple more bits and pieces from around the web:
George Weigel is one of those Catholics who thinks the Pope has laid down the letter of the law pretty clearly on the subject of abortion, and all good Catholics clearly ought to get with the program.
He also seems to be one of those Catholics who’d like to change the subject if the Pope’s views on war or capital punishment come up.
(Doesn’t it often seem like religion is just a way of cherry picking irrefutable bits of dogma that happen to coincide with political points of view you wanted to take anyway?)
But be that as it may, he’s officially “gone there” and suggested, in a column for Newsweek that not only must Catholics refrain from voting for Obama, but
…should an Obama administration reintroduce large-scale federal funding of abortion, the bishops will have to confront a grave moral question they have managed to avoid for decades…: does the payment of federal taxes that go to support abortion constitute a form of moral complicity in an “intrinsic evil”?
And if so, what should the conscientious Catholic citizen do?
I’ve vented some schadenfreude before about the trouble the IRS is having in upgrading its decades-old database software.
It’s a big project, with archaic software using the computer programming equivalent of cuneiform that few engineers understand anymore, complicated by a vast government bureaucracy with its red tape and its cumbersome regulations and its temptations to shape the job to squeeze the most money out of the taxpayer (it must be so tempting, right there next to the taxpayer aorta).
Even so, they’ve been bungling it big time.
The latest news shows the project to have “very troublesome” “security and privacy vulnerabilities” such as:
…unscrupulous people could gain access to vast amounts of taxpayer information with little chance of detection… systems could not be recovered effectively during an emergency… administrators to the
CADE
system could access, modify and delete information without being detected… contractors could make changes to system configurations without approval… backup tapes from offsite storage facilities were not adequately tested to ensure that data would be restored without errors or losses… [the] system might be vulnerable to malicious code attacks such as computer viruses.… the auditing controls for the
AMS
system were not sufficient to make sure that illegal browsing, changes or theft of taxpayer files would be detected.
If you’ve been following The Picket Line for a while, you’ll know that from time to time I check in to see how the IRS is doing with its database modernization effort.
As late as , the IRS announced that it hoped to launch the Customer Account Data Engine (CADE) portion of the project that year, but the launch date kept being put off: to , then .
Finally the agency dropped the contractor they’d been working with and decided to start over.
Only portions of CADE have ever gone live (it currently processes the simplest 30% or so of personal income tax returns).
And the agency’s inability to stick to its software modernization schedule is costing the government serious money.
Now, according to Government Computer News, they’re throwing in the towel.
They’ve halted work on the project (“pending a strategy review”) “because of concerns over increasing complexities in system development.”
Some bits and pieces from here and there:
I posted an update about the ongoing IRS software modernization fiasco.
They seem to have more or less thrown in the towel, after years of missing deadlines and busting budgets and burning through contractors.
The latest news goes into some more detail about how they started playing fast and loose with their budget and their milestones as the project started taking on water faster than they could bail.
Basically, when they would miss a milestone and run out of money, they would steal money budgeted for a future milestone and apply it to the work on the one they’d failed to complete under budget.
Clarence Lee Swartz’s book What is Mutualism? () is now on-line.
It includes a section on “passive resistance,” including tax resistance, from which I take this excerpt:
Many of the less important laws are openly and guilelessly ignored or violated every day, to say nothing of the constant and consistent evasion of taxes by rich and poor, pious and pagan, without the least sense of wrong-doing; but the citation of the foregoing is sufficient to point the way to the ultimate refusal of everyone to support or recognize any authority which denies equality of liberty or which fails to give an equivalent in services for every cent demanded for them.…
Until a majority of the people can be brought to see the need for the legislative repeal of certain laws, passive resistance suggests itself as the best means for securing relief from the oppression of such statutes.
This is a method that seems to occur most readily to the average American, for he is always eager to ignore and evade any law that is not supported by a preponderance of public opinion.
He has no great reverence for law as such, and he is encouraged in that disregard of laws and regulations when he observes the impunity with which they are, in many conspicuous instances, violated and flouted.
He sees, furthermore, that a great deal of sumptuary and otherwise obnoxious legislation receives only hypocritical support from many who were instrumental in securing its enactment, and this decidedly lessens his respect for it.
The way is therefore open for making a law so unpopular that the community will not consent to its enforcement.…
Everyone is familiar with the reluctance with which the average citizen faces the tax collector.
Tax dodging, wherever possible, is practiced by high and low, rich and poor, pious and impious, without distinction, And, in all cases, without the slightest compunction.
Since this habit is indulged in by persons who give no other evidence of dishonesty, it may be believed that the motive is not to shirk a just obligation, but that there is an almost universal feeling that no equivalent ever is received for money thus taken.
This skepticism is due to the common knowledge that the politicians who administer the government are rarely capable business man, are primarily influenced, in the expenditure of the taxpayers’ money, by political considerations or motives of self-aggrandizement, and have every other temptation to become prodigal in dispensing funds the provision of which is not due to their own industry.
Even the most uninformed citizen is aware that all government undertakings are incompetently conducted, that the taxpayers’ money is wasted right and left, that there are hordes of grafters in all such operations, who must be taken care of, and that favoritism, at the expense of efficiency, is everywhere the rule rather than the exception.
On the other hand, all experienced business men know that no private enterprise could ever be successfully conducted by the methods pursued by political management and control, and that, were not the supply of funds for covering government deficits inexhaustible by reason of the power of compulsory taxation, every government project would be bankrupt today.
Small wonder, then, that the harassed and beleaguered taxpayer turns eagerly and naturally to the only mitigation of his distress, which is to evade payment of his taxes wherever possible.
The poll tax, the harshest form of taxation ever conceived, has now been abandoned in many states, for it was discovered that more and more citizens were evading it by the simple expedient of failing to register and vote, since the registration lists were the means relied upon by the assessor for locating the person who had no assessable property.
Expediency, that ever-faithful friend of evolution and progress, has again pointed to a logical and serviceable form of passive resistance.
Therefore, by withdrawing support from the State, where it may be done with impunity, and by ignoring it wherever possible, and where its hand bears most heavily upon the non-invasive citizen, the rigors of governmental interference with individual liberty and with the practice of the principles of Mutualism may be modified by creating a vacuum around the arch aggressor.
all records pertaining to those postings, including “full name, date of birth, physical address, gender, ZIP code, password prompts, security questions, telephone numbers and other identifiers… the IP address,” et (kitchen sink) cetera.
Carl Kabat celebrated Independence Day by sneaking on to the site where a new nuclear weapons factory is being built in Kansas City, Missouri, and damaging the construction cranes.
Kansas City is the site of the upcoming Autumn NWTRCC national gathering, and I hear tell there will be opportunities for further disruption there.
Someone has started a tax resistance campaign to protest U.S. support of the government of Bahrain.
They have written the IRS with the reasoning behind their conscientious objection and so far have gotten nothing but the familiar “your argument is frivolous” form letter, but they hope to pursue the matter further through legal channels.
The only surprise to me in the disastrous roll-out of the new government-run health insurance exchange websites was that it was a surprise to those in charge that it would be a disaster.
The government just isn’t very good at developing and deploying big, modern computer applications like these.
There is a lot of graft and red tape and politically-generated inefficiencies, and they don’t have access to the most talented workforce or the best technology or techniques.
The IRS, for example, is still struggling to get CADE up and running.
This project, which was designed to replace their CoBOL, batch-processed, tax account dinosaur, has had more delays and cost overruns than I can count.
The latest audit of phase two of the project, which was supposed to go live in , then was delayed to , and then again to , with the cost doubling along the way, will not meet its new deadline either: “The CADE 2 database’s lack of accuracy, completeness, and availability prevents it from serving as the trusted source for the downstream systems… [and] the solution architecture of the CADE 2 database interfaces does not meet the IRS’s business needs because it does not meet performance expectations and creates resource contention situations between servicing online transactions and query operations.
In addition, the lack of security systems integration prevents transaction-level tracking of employee access…”
Meanwhile, in Congress passed a law that required the IRS to permit people to access their IRS account on-line… like people do with their banks or other such things.
The law set a deadline of .
That is to say, they had eight years to come up with it.
In , the project was declared a failure and abandoned “due to a lack of an effective enterprise-wide eAuthentication strategy” and, though the legal mandate is still in effect, the project still has not been completed, fifteen years after the passage of the law.
Furthermore: “No overall cost estimate exists, and there are not enough details on goals, deliverables, future online services, and time frames to be able to assess progress.”
Congress has engaged in its traditional year-end brinkmanship, passing a set of
retroactive extensions of popular tax breaks. These also included some changes
that may be of interest to tax resisters. For example:
Tax penalties for failure to file and failure to pay will now be indexed
for inflation, as of .
Congress has created a new variety of tax-advantaged savings accounts,
designed to help people fund accounts for disabled people. If I’m
interpreting what I’ve read about this correctly, the tax advantages are
modest: deposits to these trust funds are not deducted from taxable income,
but any investment gains on the amounts in the funds, as well as the
principle, are not taxable to the disabled person they are given to if they
are withdrawn for the purposes of paying the qualified expenses of that
person.
Meanwhile, the IRS has begun pronouncing doom and gloom as a result of the latest cuts to its budget.
Quick to appeal to American’s bottom-line, IRS Commissioner John Koskinen said that people may experience delays in getting their income tax refunds.
With any luck this will encourage more people to reduce their withholding so they aren’t owed refunds at tax filing time.
Koskinen says the cuts will hurt the IRS enforcement arm:
“In some ways,” he said, “these budget cuts are really a tax cut for tax cheats.
Because to the extent we have fewer people to audit and enforce the tax code, that means some people cutting corners on their taxes or not complying are going to get away with it.”
The IRS is envisioning hiring freezes and furloughs this year, but also seems to be showing a strange lack of care when it does hire people — particularly as tax-season temporary help.
According to a Treasury Inspector General for Tax Administration audit, the agency rehired hundreds of former employees who had significant “substantiated conduct or performance issues” during a previous stint with the agency, including “unauthorized access to taxpayer information, leave abuse, falsification of official forms, unacceptable performance, misuse of IRS property, and off-duty misconduct” — indeed five such new hires “had willfully failed to file their Federal tax returns.”
The Nuclear Resister profiles war tax resister and activist Bonnie Urfer.
“Bonnie’s conscientiously self-limited income keeps her from supporting the war system which now gets about half of everyone’s federal income taxes.
Living under the taxable limit has always been part of her life of resisting militarism in thought, word and deed.”
Some links from here and there:
Anti-tax demonstrators in Ikeja, Lagos
defied a government ban, and a police raid on the local Nigerian Bar Association offices, to hold a march.
Adeshina Ogunlana, chairman of that Association, told marchers: “Lagosians, don’t be deceived, shine your eyes.
Land Use Charge would lead to inflation, increase in rent, increase in cost of transportation, and increase in cost of food.
This is why we are encouraging people not to pay Land Use Charge.
It must not be allowed to stay.”
You may have heard some buzz about a bipartisan IRS overhaul bill oozing through Congress.
The highlights I’ve heard so far don’t seem amount to much, substance-wise.
I suspect it’s really meant as cover for an IRS budget increase.
Both parties know that it’s in their interest to boost agency funding so as to keep the gravy train operating, but boosting the IRS budget is poison to Republicans because of how riled up their base got about the Tea Party targeting scandal.
Combine a budget boost with “strong reform” to “protect taxpayer rights” though, and they might slip it past the rubes.
Before the U.S. federal government “shutdown,” back in , I ordered a batch of this year’s tax forms from the IRS.
I like to file on paper, rather than electronically, in part because if we all did that we’d bring the IRS to its knees.
But anyway… during the “shutdown” the IRS sent me a letter saying it had gotten my order but would not be able to fulfill it right away.
Here we are in mid-February, three weeks after the “shutdown” ended, and I’m still waiting.
That’s just a superficial indication of the chaos that’s roiling the already-overtaxed (ha!) agency.
Years of increasing responsibilities, budget cuts, blows to employee morale, and ever-more-dilapidated IT infrastructure (“profoundly archaic”, one recent report put it, and risking a “catastrophic systems collapse”) have taken their toll.
Hiring freezes have led to a graying workforce that is retiring in droves.
The “shutdown” was further insult to the injuries.
And that, in a year when the agency has had to change its rules and processes to deal with a new tax law and the most radically restructured tax forms in recent memory.
That all requires employee retraining which was supposed to have been happening in the weeks leading up to tax filing season, that is, the time when the agency had to shut its doors and send its seasonal employees home.
The new federal income tax law that goes into effect this filing season was the usual slapdash exercise in political posturing and lobbyist pissing matches.
Naturally a plethora of loopholes and shelters bubbled to the surface after the ooze settled.
A set of tax law experts has made “an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage,“ and they conclude that “[m]any of the new changes fundamentally undermine the integrity of the tax code and allow well-advised taxpayers to game the new rules through strategic planning.”
Details here: The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the 2017 Tax Legislation
After all of the talk of tax cuts, Americans may be surprised at getting fewer, smaller, and later-to-arrive income tax refunds than they’re used to this year.
While that’s not a very meaningful metric in the big scheme of things, it is something that can contribute to the degradation of taxpayer morale, as many taxpayers — subconsciously or merely short-sightedly — see their tax refund as a measure of how generous or costly the government is to them.
The usual stories about massively profitable companies like Netflix or Amazon not paying taxes (or indeed getting tax refunds) are also doing the rounds and eroding taxpayer morale this year.
Susanne Großmann of Pax Christi and Netzwerk Friedenssteuer attempted last week to appeal for a refund of 5% of her taxes, on conscientious objection to military taxation grounds.
Some tabs that have passed through my browser in recent days:
War tax resisters in the United States celebrated “Tax Day” with the usual protests, penny polls, leafletting, and other methods of outreach.
The Berkeley Daily Planet covered the People’s Life Fund annual granting ceremony in which they redirected $15,000 in taxes from the federal government to local charitable groups.
The refusal to collaborate economically with the state, in the financing
of military spending and other things that we consider socially unjust
or harmful, empowers us and allows us, collectively and cooperatively,
to show our opposition to certain state policies, to generate a social
debate about the model of society that we want, while at the same time to
promote the construction of “another possible world” by giving economic
support in solidarity with other transformative struggles that exist in
our society and elsewhere.
Mike Causey, at Federal News Network, adds another article to the growing consensus that the IRS is in a world of pain. Causey includes a long quote from an anonymous “long-time career IRS manager” who says:
…There are barely enough people left keeping the lights on to barely
allow enough people to barely meet far reduced goals.… Millions of
dollars of production are lost due to not having hundreds of dollars of
resources on a regular basis.
Most of the personnel with most of the talent and experience have retired
or fled to the private sector…
The Republican tax reform legislation does seem to have cut taxes for just
about everyone. But only a minority of people think they personally got a tax cut.
This may be in part because of Democratic talking points about the cuts
having only gone to the wealthy — they seem to have hit their target and
sown doubt about what the legislation accomplished. It may also be because
tax refunds haven’t gotten any bigger for the typical taxpayer,
and changes in tax withholding aren’t salient enough to make an impression.
This may also erode tax morale by contributing to the impression that
lawmakers are jiggering the tax code to favor the other guy.
A majority of Americans
believe the federal tax system is not fair, and among Democrats in
particular, perceptions of the fairness of the federal tax system are lower
than they have been in recent memory.
Automated traffic-ticket-dispensing radar cameras in France have undergone
an extraordinary wave of attacks by frustrated motorists. Statistics on the
extent of the attacks and their effect on government revenue continue to
come in. The latest show that revenue from radar vans in particular dropped 42% last year.
The IRS is hoping to get a bunch of new funding for a desperately-needed computer modernization effort. Problem is, this isn’t the first time, and the last couple of times they’ve gotten a bunch of new funding for desperately-needed computer modernization efforts, they’ve bungled it badly. Will Congress let them take another swing? Do they have a choice?
Some recent links of note:
NWTRCC kicked off this year’s federal tax filing season with a panel consisting of the experienced war tax resisters Kathy Kelly, Sam Yerger, Erica Leigh, Charlie Hurst, and Maria Smith, who explained their approaches to resistance and took questions from a live audience.
You can view a video of the panel and the Q&A here.
[S]uppose… that the governor of a state like Texas or Florida were to say: Citizens of this state should not pay federal taxes this year, and our state will indemnify its citizens against federal prosecution. In other words, the state would assume the federal tax bill for its own citizens, and declare it null and void.
Meanwhile, one of the more unhinged Trumperists decided it would be a good idea to publicly tweet an increasingly violent series of fantasies including threatening the life of a traffic cop, killing Nancy Pelosi, running over “a million people” in a speeding car, and… bombing the IRS headquarters.
That last bit got him indicted on federal charges.
TIGTA has released another report on the federal government’s use of private debt collection companies to pursue unpaid taxes.
The report says that the companies recovered a mere 1.79% of the unpaid taxes they were assigned, and that more than a third of the money collected went to cover costs and profit for the private companies, with the remainder going to the Treasury.
The National Taxpayer Advocate also released its report recently.
It highlights some of the many problems the IRS had to cope with and/or exacerbate during the year of pandemic shutdowns and greater-than-usual government dysfunction.
For example:
Taxpayers got misleading tax notices that included deadlines to respond that had already passed by the time the notice was sent.
People who tried to call the IRS were able to get through to an agency employee less than 25% of the time.
Taxpayer records are processed on “the oldest major IT systems in the federal government,” but Congress has appropriated only about 8¼% of the estimated cost of updating them.
Hey, what do you know?
Another tax strike is brewing in South Kivu.
This strike, which is scheduled to start in , is meant to pressure the government to repair roads and bridges in the region.
USA Today today runs 
