IRS plan for manual refundsgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Here's the link to Yahoo technical news: http://dailynews.yahoo.com/h/nm/19991029/tc/yk_taxes_2.html
It lays out the plan for refunding- only 10,000 refunds can be produced each day, lowest income gets highest priority.
-- cmd0903 (email@example.com), October 29, 1999
IRS Acknowledges Problems In Y2K Preparation
WASHINGTON (Reuters) - The Internal Revenue Service has told Congress it has experienced some ``trouble spots'' in preparing for the Year 2000 computer problem, although it is working on contingency plans and could manually issue some tax refunds.
In a letter sent earlier this month to House Ways and Means Committee Chairman Bill Archer, the IRS said its records of equipment and software at its offices around the country posed a high risk to its Y2K preparation efforts.
IRS Commissioner Charles Rossotti wrote that visits to the Atlanta and Philadelphia Service Centers and the Philadelphia and Pittsburgh field offices had revealed both strengths and weaknesses in the inventory records.
``The quality of the IRS's inventory currently poses a high risk to the Y2K effort,'' he said in the letter dated Oct. 15.
Some computers and software withdrawn from service were still in the database while other equipment being used was not recorded.
``While there is always an element of risk, and we do have some trouble spots in our effort toward becoming Y2K compliant, I am confident we will be prepared for the Year 2000,'' Rossotti wrote to Archer, a Texas Republican.
A coding glitch could cause older computers and software to mistake the 2000 date rollover as 1900 come Jan. 1 unless the machines are fixed or replaced.
The IRS Commissioner stressed that the agency's returns processing systems, both paper and electronic, had been made Y2K compliant and successfully undergone so-called end-to-end tests in which all parts of the system work together.
But there is no alternate IRS system to process returns or issue refunds in the event of a Y2K failure, Rossotti said.
The 10 IRS service centers combined could produce up to 10,000 manual refunds daily and would be issued to taxpayers most in need.
If manual refunds were issued, Rossotti said, they would go first to taxpayers with IRS-approved taxpayer assistance orders, then to people with gross incomes of $10,000 or less, and then increasing in increments of $5,000 depending on the ability to issue the manual refunds.
-- Dog Gone (firstname.lastname@example.org), October 29, 1999.
Hmmmmmm. Now if I was a real polly, would I be happy, or saaaad?
-- Mr.Happyface (email@example.com), October 29, 1999.
But if your refund is not issued in a timely fashion, they owe you interest right? And a penalty on top of that? It's all that they ask when you owe. If so, what is the rationale for not paying out the biggest debts first, since those will be the ones incurring the highest interest and penalty charges?
Or are people permitted to be correspondingly late in their payments to the IRS next year, with the lowest wage earners owing first, and the highest owers getting to take a long time, in $5000 increments?
It's obvious they haven't given this any thought. For goodness sake, if their computers are down, how are they supposed to figure out who is owed money, and how much? Do they only use computers to print checks? I guess the best word is, adjust your payroll withholding or quarterly payments such that you will not expect any refunds. Do so quickly.
-- Scarecrow (Somewhere@over.rainbow), October 29, 1999.
The manual refund dilemma for the IRS was described in the most recent GAO report on the IRS contingency plans.
Basically--what to do: write the large checks first, to save the government from having to pay so much interest or write the little checks first--(making the assumption that they go to people who need the money the most)
If it comes to that, probably they will discover that it saves the government the most money to just not write the checks at all.
-- JIT (firstname.lastname@example.org), October 29, 1999.
Now lets see now ----- 10,000 refunds a day, 50,000 per work week, approx 50 weeks in a year, so that would work out to 2,500,000 refunds a year. If there are about 50 millions refunds to be processed for the year, that would take them 12 1/2 years to get the job done.
-- thinkIcan (thinkIcan@make.it), October 29, 1999.
You know what is really sad? Most people won't even think anything is wrong with this. They will probably not think beyond, "Great, the IRS has everything under control!" If each of the 10 service centers has to process or even type 1000 checks a day indefinitely, how many workers will be doing that rather than their regular job? I sure would like to see the contingency plan on this one.
-- Darla (email@example.com), October 29, 1999.
Think I Can,
The math didn't look quite right so, I double-checked and it's even worse than you thought. It will take 20 YEARS to process 50 million refunds, which by the way, I think is probably a very conservative number. This may require some research, but I would think that the number expecting refunds is probably closer to 100,000,000, in which case it will take 40 years.
My suggestion would be that we appeal to our Congressman to pass some legislation which will add interest to the amount of the refund for any that take more than 60 days from date of receipt. This is the very least we should do to avoid being completely shafted, because if there is no penalty they will take as long as they see fit.
-- Hawk (firstname.lastname@example.org), October 29, 1999.
Make sure that you have little or no refund due...and you have no problem. And don't count on receiving that refund in a timely manner.
-- Mad Monk (email@example.com), October 29, 1999.
I will do my civic duty and volunteer to allow IRS to stop pursuing me for collections until they've gotten all the refunds mailed.
-- (RUOK@yesiam.com), October 29, 1999.
Here is a better article.
It says that in 1997, the IRS issued 90 million refunds. $40m more than you guessed. It should take them about 24 years!
-- Darla (firstname.lastname@example.org), November 03, 1999.
Thanks for the info, Darla. I had guessed 100 million, and I thought it was closer to that. But what is wrong with people's calculators these days? Did you know there is a calculator built into Windows? Mine says 36 years for 90 million refunds.
-- Hawk (email@example.com), November 03, 1999.