IRS insider reportedly calls out agency's use of ancient tech and lousy customer service — but these issues have been known about for years
Say what you will about how the government spends your taxes: at least the Internal Revenue Service (IRS) isn’t splurging on the latest in high tech. That is, unless you count technology that’s half a century old as some kind of back-to-the-future, bean-counting adventure.
In late August, the Daily Mail published the tell-all rants of an unnamed IRS employee, who claims to have worked on the agency’s customer service and IT teams. The staffer shared, among other things, the water cooler gossip about the tax collector’s ancient technology.
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“There is an ongoing joke that some of the oldest systems were paid for by the Kennedy administration,” the anonymous person said, “and the reality of the jokes is that I believe them to be very accurate.”
While the British tabloid labeled this an all-caps “EXCLUSIVE,” as British tabloids are compelled to do, it’s hardly news to Americans. For instance, that John F. Kennedy line isn’t a joke. In 2015, then-IRS commissioner John Koskinen told a Senate panel that the agency had been operating and upgrading systems that were built in the 1950s and ‘60s.
“It’s like driving a Model T that now has a great GPS system and wonderful sound system [and] has a rebuilt engine,” he said, according to CNN.
The IRS is still running on old parts — but how? Let’s take a peek under the hood.
'Shouldn’t be on the road'
Perhaps a more fitting automobile comparison for the IRS would be a Studebaker — for those under 70, Studebaker was an American carmaker that went bust in 1967.
In 1962, JFK was in the White House, The Beatles hadn’t yet invaded America and Studebaker introduced a redesigned version of its popular four-door sedan, the Lark. Around this time, the IRS began rolling out its Individual Master File (IMF) system.
Aimed at an accounting industry audience, in 2021, Rick Telberg of CPA Trendlines Research shared an article titled “The IRS Studebaker Bomb.” In it, the author noted: “The National Taxpayer Advocate Report to Congress likens the IMF to a 1960s car that has been souped up with Bluetooth, GPS and anti-lock brakes, but it’s still an old car that isn’t going very fast and shouldn’t be on the road.”
Yet, three years later, it still is. Against all odds or common sense, the IRS has apparenty patched and poked and primped and propped up the IMF over the years, making it a living chronicle of technology's march through tape reels, vacuum tubes, punch cards and floppy disks. It should be in a museum.
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Despite this, the IRS fires up the IMF system without much fanfare, its guardians perhaps praying that no one requests a guided tour of the IT room, hamster wheels and all. And to think: This is what the world's top economic superpower used to process $4.7 trillion in gross taxes from 271.5 million returns in fiscal year 2023.
Yup. Lark pretty much nails it.
A staple of American tax bureaucracy
At least the IRS has laid out plans to retire the IMF system by 2028, thanks to a boost in funds, but it seems the public-facing side of the company could also use a lift.
Rotten customer service is practically a rite of passage for every American consumer, though at least staying on hold for an hour with a retailer might net you some material perk. Trying to get customer service when you’d rather not be an IRS “customer” to begin with can be mind bending — and thanks to the bellyaching of the employee in the Daily Mail report, we may be able to staple a new layer of surrealism to the madness.
Though the rest of the world long ago figured out that yes, you can walk and chew gum at the same time, the IRS may be late to the news. Some staff answer phones or process taxpayer letters — but they cannot do both, the report says. So, even if call volumes bottom out while taxpayer letters pile up, IRS staffers stuck working the phones are quite possibly putting your tax dollars to work by sitting and waiting.
Meanwhile, some bored employees “spend the whole day doing nothing but pulling staples out of papers,” the worker claims.
At least the agency has some sense of the disconnect. As reported to Congress by the Taxpayer Advocate Service, an organization that works within, but independently, of the IRS itself, during the last tax filing season, accounts management employees spent 1.1 million hours — 29% of their time — waiting to receive calls.
In other occupations, this might be described as spending a third of one’s time waiting to do their job. Or perhaps there’s a more accurate way to calculate it, and, if so, a certain old computer system might come in handy.
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