IRS Computer Glitch Caused By 'Master File' Issue

Tuesday's tax day computer glitch at the IRS prevented the agency from accepting millions of tax returns and forced the IRS to extend the filing deadline for another day.

We now have a better idea of what happened to cause the snafu.

According to an IRS official, the problem arose at 4 a.m. EDT Tuesday, which was the day tax returns were due and the busiest day of the tax year for the IRS.

According to the agency, a piece of hardware connected to the IRS's master file, the core processing system that holds all taxpayer information, went down.

The glitch meant other applications couldn't access the master file data, and the agency couldn't accept returns from online tax programs like TurboTax and TaxCut.

The issue was fixed about 11 hours later, the IRS says, and the agency was able to accept tax returns again.

The delay was an inconvenience for taxpayers and a high-profile embarrassment for the agency. But it didn't really come as a surprise to anyone familiar with IRS's decades-old computer system. Last October, Deputy Commissioner Jeffrey Tribiano testified before a House oversight subcommittee that the IRS was "concerned that the potential for a catastrophic system failure is increasing as our infrastructure continues to age."

Former IRS Commissioner John Koskinen says the computer glitch was the predictable consequence of years of congressional budget cuts which, in turn, led to significant staff cutbacks.

"The budget has been continually under pressure for the last eight years," he told NPR, "even though we have almost 20,000 fewer employees and 10 million more taxpayers, so sooner or later something's gonna give."

Republican lawmakers counter that incompetence at the agency was just as much to blame.

During a debate Wednesday on a measure to improve IT systems at the IRS, Rep. Jackie Walorski, R-Ind., pointed to a system the IRS tried to install called the return review program or RRP. She said it is years behind schedule and millions over budget. "I hear complaints about the IRS's budget and I think about the RRP. Senior leadership gave no direction," Walorski said. "No one knew how it would fit into the big picture and contractors were way out of the loop. Everyone essentially ran in circles until they ran out of money."

Believe it or not, at one time, the IRS's computing system was a state of the art marvel. In the early 1960s, people would make the trek to the IRS computing center in Martinsburg, W.Va., just to gawk, according to University of Georgia history professor Stephen Mihm.

"This huge mainframe facility that was truly state of the art, it was really cutting edge, so much so that people would go there almost as tourists to see this amazing display of computing power processing the nation's tax returns," he said.

But Mihm says being an early adopter ironically led to today's problems at the IRS. The agency still uses a computer language from that era called Assembly that few know anymore. "It's quite antiquated," he says. But Mihm says, with so much of the IRS's data encoded with Assembly, "it's very hard to sort of start entirely from scratch and build an entirely new system."

It turns out the solution to Tuesday's glitch — which, by the way, occurred in that same West Virginia facility — was something too familiar to anyone who has a balky computer. According to the IRS, they simply rebooted the system, although former Commissioner Koskinen says it is a little more complex at the IRS than restarting your PC: "It's not a question of turning the power off and turning it back on, because all of the related systems have to be rebooted and you have to test to make sure that they've all come up appropriately, so a reboot will take several hours."

The IRS says its system was up and running again by 2:30 p.m. on Tuesday.

Congress approved more money for the IRS last month to help it rewrite the tax code to reflect the changes lawmakers made in last year's tax cut legislation. But Koskinen is skeptical its enough to fix what has been called the most antiquated computer system in the federal government.

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