On the front of this year's federal income tax forms, the Internal Revenue Service printed a letter to taxpayers apologizing for foul-ups that delayed millions of refunds in 1985. About 16,000 taxpayers still have not received their checks.
The IRS is trying to fix the problem by upgrading its computer system, but that effort suffered a setback last week. IRS officials canceled a contract for $73 million worth of new computers and software to be supplied by Virginia-based Computer Systems & Resources, after a Government review panel found that the equipment had serious deficiencies. For one thing, the system's mastery of COBOL, a computer language widely used in the Government, did not meet federal standards. The panel also concluded that the system would probably cost $101 million, instead of the $73 million estimated by the Virginia company.
IRS officials say that their current computers are adequate for the time being and that the processing of returns will be faster this year than in 1985. Many critics are skeptical. Says one professional tax preparer: "My advice to anybody expecting a refund is to get your return in early."