‘Wastebook’ Reveals IRS Wrong-Doing, IT Errors During Lerner Scandal

U.S. Director of Exempt Organizations for the Internal Revenue Service (IRS) Lois Lerner is sworn in to testify before a House Oversight and Government Reform Committee hearing on alleged targeting of political groups seeking tax-exempt status from by the IRS, on Capitol Hill in Washington May 22, 2013. (Photo: REUTERS/Jonathan Ernst)

Even as the Internal Revenue Service (IRS) was struggling to explain to Congress why it could not produce copies of former IRS official Lois Lerner’s emails, the agency was paying $12 million for an email backup system that it could not and did not use.

The agency’s inability helped Lerner get off the hook for using the IRS to target conservative and Tea Party nonprofit applicants during the 2010 and 2012 campaigns.

Soon after the Lerner scandal, IRS officials bought the system designed to prevent the loss of emails, but then didn’t bother to turn it on. They also broke federal procurement rules in how they bought the system.

The fiasco was highlighted by Sen. Jeff Flake, an Arizona Republican, in the latest edition of his Wastebook, released Tuesday.

The agency began paying for an email archive subscription in June 2014, while the Lerner scandal was unfolding. Lerner was declared in contempt of Congress that May. But while IRS officials were telling Congress they understood the importance of not losing official records, the new system sat unused.

A September 2016 government audit found that the expenditure “was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise.”

And officials also ignored their own agency’s regulations and likely broke rules “by not using full and open competition to purchase these subscriptions” and by using annual appropriations for something it didn’t use in that year.

The IRS “allowed the contracts for these subscriptions to expire on June 19, 2016.”

The agency’s chief information officer stated “we strongly disagree that the IRS wasted taxpayer dollars.”

The agency, which requires all Americans keep their tax records for seven years and must analyze massive amounts of information to do its job properly, is decades behind on information technology.

Until last year, it only kept track of nonprofit finances — the kind for which Lerner was responsible — on paper, paying employees to scan them in and re-type them rather than simply using electronic records.

Former IRS Chief Technology Officer Terry Milholland lived in Texas, but most weeks flew to Washington, D.C., and slept at the Grand Hyatt downtown — on the taxpayer’s dime.

The lack of actual corrective action following the Lerner scandal raises questions about the agency’s capacity for learning from mistakes.

“The IRS does not effectively manage server software licenses and is not adhering to federal requirements and industry best practices,” IRS was told by another audit in 2014.

“The amount wasted because of the inadequate management of server software licenses is in the range of $81 million to $114 million based on amounts spent for licenses and annual license maintenance that were not being used,” the audit said.

That amount was on servers alone. Desktop computers are a different story. The IRS had to pay Microsoft for special support because it was still using Windows XP in 2014, long after technical support had been discontinued.

A lawsuit revealed that IRS programmers wrote an average of 473 lines of code per month, an amount that could be done in about a day by most private sector programmers.

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