Taxes: Moving in Slo-Mo At the IRS

The Internal Revenue Service has a notorious lack of sympathy for taxpayers who file late returns. But this year it is the tax collectors who are having trouble with tardiness. IRS Commissioner Roscoe Egger acknowledged last week that his agency is taking as long as twelve weeks to send out refunds, two weeks longer than last year. The sluggishness of the IRS, said Egger, is the result of glitches in setting up a new $103 million Sperry Univac 1100/84 computer system. The IRS launched a crash program to install the computers in November to replace its creaky 1960s-era equipment.

The Government must pay for its lack of punctuality. Taxpayers who file for a refund by April 15 and receive no check by June 1 are entitled to 13% interest until it arrives. The IRS, however, hopes to catch up soon. The agency predicts its total interest payout will be $200 million, roughly the same as last year. Some anonymous IRS employees told journalists that the tax backlog had got so bad that agency workers had deliberately shredded thousands of returns. Egger heatedly rejected those stories. Said he: “I’m here to tell you it’s sheer nonsense.”