Bach Seat

As is often attributed to Benjamin Franklin, who wrote in 1789 that “nothing can be said to be certain, except death and taxes.” The taxman is coming again on April 17th, 2018. Despite Trump’s Uncle Sam‘s latest tricks to take more of our money the Internal Revenue Service’s (IRS) systems are the oldest running in the U.S. Government. Nextgov reports that one of the IRS’ most important tax-processing applications is old enough to be a grandparent, and officials warn a failure during tax season could have dire economic ramifications or delay tax refunds for 100 million Americans.

Reports from the General Accounting Office, the IRS’ Individual Master File (IMF), and its sister system, the Business Master File (BNF) are the two oldest tech systems in all the federal government at about 58 years old. The next oldest tech system identified is the Defense Department’s Strategic Automated Command and Control System, which helps coordinate U.S. nuclear forces, which was developed 55 years ago (rb- Thanks reassuring).

The IMF and BMF are relics of the early days of computing itself. In 1960, an IRS report announced plans to install computers to automate tax processing at a facility in Martinsburg, West Virginia. Today, almost 60 years later, the IRS is still using the same systems to process the nation’s tax returns.

The Individual Master File is a massive application written in the antiquated and low-level Assembly programming language. It runs on an IBM mainframe and holds the data from 1 billion taxpayer accounts going back decades. IMF is chiefly responsible for receiving individual taxpayer data and dispensing refunds.

Despite hundreds of millions in spending, plans to fully modernize the application are more than six years behind schedule, and in a statement to Nextgov, IRS revised its new timeline for a modernized IMF to 2022.“To address the risk of a system failure, the IRS has a plan to modernize two core components of the IMF by 2021, followed by a year of parallel validation before retiring those components in 2022.”

The timeline could slip further. The article says the IRS will need the authority to hire at least 50 more employees—and backfill any losses—and receive an extra $85 million in annual non-labor funding for the next five years. Trump’s fiscal 2018 budget request would cut IRS funding by $239 million.

In the statement, IRS said IMF “is antiquated, with an architecture and design that dates back to the 1960s,” and admitted fewer programmers understand the old Assembly code. Auditors at the GAO have said IRS has more than 20 million lines of Assembly code.

The IRS’ main efforts to replace the IMF is the Customer Account Data Engine, which was canceled in 2009, and the next modernization effort CADE 2. Nextgov reports that plans to fully deploy CADE 2 and replace IMF have slipped, even as each company working on the project has earned as much as $290 million in revenue from IRS.

Contracting data obtained by Nextgov indicates contractors Deloitte, CSRA, Northrop Grumman, and MITRE Corporation all earned more than $60 million through fiscal 2017 through CADE or CADE 2 task orders.

In the meantime, IRS runs its legacy systems like IMF on newer hardware, though GAO’s latest audit stated 64 percent of the agency’s hardware is aged. Dave Powner, GAO’s director of IT management issues, said before the House Committee on Ways and Means in October. “But relying on these antiquated systems for our nation’s primary source of revenue is highly risky, meaning the chance of having a failure during the filing season is continually increasing.”

Such a failure would be “catastrophic,” according to former IRS Commissioner John Koskinen.

“If this failure were to occur during the filing season, we could be looking at a lengthy interruption in processing returns and issuing refunds … This could have a devastating effect on more than 100 million taxpayers waiting on their refunds as well as the nation’s economy, which sees some 275 billion dollars of refunds each winter and spring.”

Mr. Koskinen told Nextgov that work on CADE 2 stalled “because of the budget crunch of the past year or two, along with the critical need to protect taxpayers against identity theft.” IRS diverted resources toward partnerships with private companies and state and local tax agencies to battle identity theft. The agency spends $2.7 billion annually on IT.

“Victims of identity theft dropped by two-thirds, after years of barely being able to hold our own,” he said. “It was the appropriate decision to protect accounts against identity theft, but it has meant that other critical information technology programs have gone more slowly.”

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The government’s technology woes are worse than you think. Over 80% $90 billion federal IT budget goes toward outdated, legacy IT systems, leaving little leftover innovation commonplace in the private sector.

Related articles

• Don’t Look Now, but America’s Tax System May Collapse Soon (Vice.com)

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.