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Taxpayers and technology, part 1: the IRS's automated odyssey

"2001: A Space Odyssey" was one of the most discussed movies of the 20th century. In one of its iconic scenes, a human astronaut seeks to disable a rogue computer named HAL whose original programming to serve humans had gone deeply off track.

More than 40 years after "2001" was released, the theme of overreliance on technology resonates more than ever. To be sure, smartphones and other devices seem to offer a marvelous new way of doing things. But the brave new world they create is often filled with human flaws.

Consider the way the IRS tries to rely on automated systems to administer the tax system. As we will discuss in this post, this reliance seems to have become excessive and to have resulted in disturbingly poor treatment of taxpayers.

For example, IRS computers have been programmed to spit out tax levy notices. The IRS has allowed computers to take control of this process so extensively that fully 86 percent of tax levy notices are automated.

The National Taxpayer Advocate, Nina Olson, has spoken out about this. Automatic notices can easily be wrong. There may be individual human circumstances that, when taken into account, make sending out a tax levy an improper action.

But it is increasingly difficult to find a human being to talk with to take care of such things. In that sense, last month's federal government shutdown may have been a harbinger of things to come.

During the shutdown, IRS computers kept grinding out tax levy notices. And the process of initiating tax liens continued, even when people had no practical way to get through to the IRS to pay their back taxes and clear up the tax liens.

In part two of this post, we will discuss how this situation of an underfunded, highly automated IRS has come to pass.

Source: Forbes, "The IRS: A Greek Tragedy," Christopher Bergin, Nov. 15, 2013

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