Do you know how to program in COBOL, a computer language? Since COBOL was invented in 1959, there’s a good chance that you don’t. We can also assume that the IRS has difficulty finding competent programmers, as this language is now obsolete compared to modern solutions. However, this is the IT infrastructure on which the IRS’s activities are based. In fact, it is the oldest IT system still in operation in the U.S. public sector.
Right here at GamblingTaxes.ca, we scan every document received or sent and keep paper copies only for procedural reasons and to remain in full compliance with accounting policies. However, when the time comes to communicate with the IRS on a file, it is always the fax that remains the central tool. All this to say that the IRS is in dire need of funding for a rapid modernization of its infrastructure.
According to the Government Accountability Office (GAO), the system « written in assembly language code — a low-level computer code that is difficult to write and maintain — and operates on an IBM mainframe.”
This is particularly true for paper applications, including those involving Canadians who gambled, won and were taxed in the United States. They are not alone. 347 of the 956 IRS forms cannot be submitted electronically. The IRS has 468,000 cubic feet of storage on its campuses. In addition, Federal Record Centers store approximately five million cubic feet of IRS records! The IRS spends $57 million a year to store and retrieve this mountain of paper. That’s dozens of football fields of paper boxes!
Through such a mountain of paper comes a frustrating but possibly unavoidable situation. Indeed, nearly 5% of paper applications are literally lost by the IRS. We are not talking about envelopes not reaching their destination because of the postal system. We are talking about tracked packages received by the IRS, often partially processed, then suddenly disappearing. Don’t expect a letter of apology either. When this happens, it is often the citizen, running out of patience, who finally realizes this through calls to the IRS. The solution is not rosy either. You have to resubmit the application and start from scratch.
This reality lends weight to the Taxpayer Advocate Service’s report, which calls for $2.5 billion investment over six years to modernize the infrastructure. The current budget is rather between 150M to 180M$ per year.
While the cuts in the American tax system are continuing, this necessary modernization does not seem to be about to happen. Nevertheless, the administration as well as the citizens would have everything to gain from such an investment. A Supreme Court justice famously opined that “taxes are the life-blood of government.” In that vein, the IRS is responsible for collecting approximately $3.5 trillion in taxes each year – roughly 95 percent of federal revenue. Operating with the help of today’s technology would only make it easier to collect these taxes… and to issue refunds to Canadian casino winners in the process!
If you have been deducted 30% on a casino or lottery win in the United States, it is virtually certain that some or all of that amount can be recovered. Gamblingtaxes.ca offers a turnkey solution, handling the entire process with the tax authorities on behalf of its clients. Contact us via this form for a free consultation.