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TECHNO DREAMS
The alphabet-soup modernization programs make up a scrap heap of failed technology. Herewith the IRS's roll of glitches:
--SCRIPS. The Service Center Recognition/Image Processing System was meant to enable the IRS to "read" tax forms. The original cost was pegged at $133 million, later rising to $288 million. The IRS initially predicted it would save $17 billion in labor costs, but by last year the agency said scrips would in fact eat more money than it saved. Cost to taxpayers to date: $209 million.
--DPS. Like SCRIPS, the Document Processing System was meant to create "optical images" from paper returns, converting them to a readable format for the agency's computers. A number of states have such a system, yet the GAO's Rona Stillman declared DPS "a complete fiasco." The $1.3 billion project was scrapped. Cost to taxpayers: $284 million.
--CAPS. The Corporate Accounts Processing System was meant to create a single integrated database of taxpayer account information. The idea was to resolve corporate issues immediately via access to the CAPS database. The system was axed. Cost to taxpayers: $179 million.
--ICP. The Integrated Case Processing system was supposed to permit customer-service representatives to access in one step all the data needed to answer taxpayer questions or resolve problems. It failed. Cost to taxpayers: $44.8 million.
--Cyberfile. This program was meant to allow taxpayers to file returns through their home computers. It fizzled. Cost to taxpayers: $17 million.
In all, according to Gross, 12 major IRS modernization programs have been either canceled or put on hold. Not all the money was wasted. A billion dollars went to upgrade aging systems and improve customer service. But the gao is not sure about the rest. The problem, it says, is that the IRS keeps such lousy books the agency can't actually account for it. "They can't come anywhere near demonstrating how they spent this money," says Stillman. The gao claims that if the IRS were a business, its accountants would not be able to sign off on its financial statements.
The IRS has a monster future problem to deal with: the double goose-egg, better known as the millennium dilemma. IRS computers, like those of most businesses, use only two digits to denote the year, so when the clock strikes midnight on Dec. 31, 1999, the computers will assume it's 1900. Without a fix, thousands of Americans could get bills dunning them for decades of delinquency--or undeserved refunds of considerable proportions. Because of the threat of a great crash at the turn of the century, says IRS Commissioner Margaret Richardson, the agency is deferring "all but critical and legislatively mandated legacy systems changes during fiscal year 1997." More delay.