Road to Perdition

The tortured tale of failed IRS turnarounds.

1978

President Carter suspends replacement of the IRS master file of taxpayer records, amid concerns about citizens' privacy.

1985

IRS launches second modernization attempt.

1995

Congress halts second attempt. Money spent: $2 billion. Results: Next to nothing. General Accounting Office warns "pervasive management and technical weaknesses" will haunt future projects.

1996

IRS suspends plan to let taxpayers file online.

1997

During three days of hearings in September, the Senate Finance Committee hears of taxpayer despair, ruin and suicide induced by overenthusiastic tax collectors. President Clinton appoints Charles Rossotti IRS commissioner. Rossotti makes agency overhaul his top priority.

1998

Computer Sciences Corp. wins contract to build new technology systems, guided by Rossotti's "blueprint."

1998-2001

Modernization breaks down. Most initial components are late and over budget. Online tax services are in jeopardy. The IRS master taxpayer file also limps behind schedule.

2001-2003

Breakdown intensifies. By September 2003, five modernization components, totaling more than $266 million, are behind schedule and over budget, some by as much as $86 million.

June 2003

IRS Chief Financial Officer Todd Grams is named chief information officer.

2004

Mark Everson, commissioner of the IRS, bars CSC from competing for work on more of the components. To help save the project, Grams then implements new management procedures.

Source: IRS, GAO, Staff reports