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November 17,1999
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Page 5
o w n to t h e n e w M ille n n ia
Electronics in the millennium: Our strength and weaknesses
Associated Press
The general consensus seems to be that the United States as
a nation is fairly well prepared for Y2K, and that it will
somehow stumble through whatever gaps exist.
While total assurance and efficiency are out o f the question,
Americans are long accustomed to emergencies and the need
to improvise, and probably are at their best doing so.
Still, and without a doubt, the passage into the new millennium
will impress upon the public the fragility o f the computerized
world now in the early stages o f creation.
In the new world, a power outage w on’t just mean doing
without lights, heat and elevator service; it might mean an
entire system, whatever it is, since great conveniences also
create great problems.
Consider the potential Y2K problem at the Internal Revenue
Service should its computer systems fail to meet the test. IRS
officials say they are ready, but who really knows what can*
happen?
“ If our returns processing systems fail, our contingency plans
do not provide alternate information systems to process
returns or issue refunds,” says IRS Commissioner Charles
Rossotti.
Such an eventuality would be shocking to millions o f American
families who, unwisely or not, use the IRS as a savings plan,
allowing overwithholding o f taxes in eager anticipation o f a
refund.
Last year, 83 million refunds totaling $112 billion were
processed by the IRS computer systems, a staggering sum
equal in economic power to a short-term but major tax cut.
Rossotti’s assessment o f IRS readiness, contained in an Oct.
15 letter to House Ways and Means Committee Chairman
Bill Archer, R-Texas, explains the contingency plan would
mean issuing refunds manually as a stopgap measure.
It offers a vivid illustration o f how computer-dependent
America has become.
At busiest periods, Rossotti writes, the IRS would have to
invoke contingencies within days to process the largest
number o f manual refunds within the 45-day interest-ffee
period.
The commissioner then explains, “The 10 IRS Service Centers
can produce a maximum o f 6,000 to 10,000 manual refunds
daily,” a rate that Dan Pilla, a tax litigation consultant,
observes would require more than 30 years o f five-day
weeks.
Pilla, a student o f the IRS code, authorof numerous books on
the IRS, and instructor o f tax professionals, believes there
will be some problems, but to what extent he cannot say.
But, he suggests, the attempt to handle manually such a
mammoth task, even as a stopgap, would break down in
confusion.
Stark as the numbers appear, he says, they’re only part o f the
problem. The procedures that follow, necessary as they might
be, could add to confusion.
One such procedure, Pilla says, is the failure scenario under
which, the commissioner explains, “We would issue manuals
to those taxpayers ‘most in need.’”
Topping the priority list in the additional procedure would be
“taxpayers meeting ‘hardship criteria,’ e.g., having an
approved Form 911, Application for Taxpayer Assistance
Order.”
What taxpayer would know what a “911 ” is, Pilla asks. What
taxpayer would have the foresight to file such a form with his
or her tax return? And wouldn’t that mean an even heavier
paper burden?
Rossotti expresses confidence the IRS will be ready for the
changeover from 1999 to year 2000 (not 1900), and that
contingencies w on’t have to be implemented.
But in such matters you never can be sure. There is always an
element ofrisk. “And we do have some trouble spots in our effort
towards becoming Y2K compliant,” he says.
Always those “ifs.” And always the need for backups and
contingencies.
Such are the problems o f an electronic age, which drives the
economy to new heights and dimensions o f power but
leaves it fragile and dependent, too.
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