The Massive Fraud At The Internal Revenue Service



“DEBATE ON PUBLIC ISSUES SHOULD BE UNINHIBITED, ROBUST, AND WIDE-OPEN, AND . . . MAY WELL INCLUDE VEHEMENT, CAUSTIC, AND SOMETIMES UNPLEASANTLY SHARP ATTACKS ON GOVERNMENT AND PUBLIC OFFICIALS.”

-- JUSTICE WILLIAM BRENNAN



This blog is posted in the public interest. This blog outlines an employee's experience at the hand of the Federal Government while working at the Internal Revenue Service.
The purpose is to warn potential candidates that are contemplating to work for the Federal Government.
The take away: You cannot take the Federal Government to court regardless of what criminal acts they do.


The head of a Government Agency is appointed by the President.
How does the President choose whom to appoint?
The chosen candidate must be very wealthy who had donated ample sums of money to get the President elected, or re-elected.
It also helps if you have gone to an ivy league school. But most of all it is the money that counts.


As a government employee, you can loot, plunder, swindle, as long as you belong to the “Inner Circle.”
But, How do you get to belong to the “inner circle?” .
You have to read on.

Money, Power, Arrogance, and Looting

How the United States Government Works: A Cross Section of Opinions

"Why is this scoundrel Charles O.Rossotti still being asked to testify before Congressional Committees?"

--Unknown

"Unfortunately, as usual, most of the folks in this discussion consider themselves as experts on the subject. They keep on talking about trillion-dollar spent on Afghanistan. They miss the point that the trillion dollars were not spent on Afghanistan, but on the military-industrial complex and the contractors who were there to make a buck and charge upward of $1000 a day. They created a military modeled after a western country with a "fully equipped" air force with Cessna planes equipped with bombs and machine guns."

--Saleh Keshawarz, Windsor, CT , August 10, 2021

“As long as there is money to be made by the Military-Industrial-Congressional Complex, we will never "stay out," nor ever resist the temptation to meddle in other regions of the world.”

--“Radical Normal, Los Angeles, Aug. 10, 2021

"The USA will continue to engage in disastrous and illegal military interventions, until there are consequences at home and abroad, both political and judicial. What price did Bush and Cheney pay for the illegal war in Iraq? What price did Obama and Biden pay for prolonging the war in Afghanistan and Vietnam-style misinformation about progress? Our leaders who foment wars and kill hundreds of thousands of innocent victims need to be shipped to The Hague in orange jumpsuits.”

--“Xoxarle, Tampa, Aug. 10. 2021

“Like the essential jobs performed by grocery clerks and other low-wage workers during the Covid-19 pandemic, this work sustains our lifestyles and undergirds the prevailing social order, but privileged people are generally spared from having to think about it. One reason is that the dirty work occurs far away from them, in isolated institutions — prisons, slaughterhouses — that are closed to the public. Another reason is that the privileged rarely have to do it. Although there is no shortage of it to go around, dirty work in America is not randomly distributed. It falls disproportionately to people with fewer choices and opportunities such as high-school graduates from depressed rural areas, undocumented immigrants, women and people of color. To be sure, plenty of elite white-collar professionals — Wall Street bankers who sell shady financial products, or software engineers who design hidden spyware — do jobs that are morally suspect. But for white-collar workers who grapple with the ethical consequences of what they do, lavish salaries and bonuses can offset whatever discomfort they may feel. These elites are also less likely to be shamed and stigmatized for what they do than to be envied, lessening the impact of the ethical compromises they may feel they are making.”

--Eyal Press, NY Times, August 13, 2021

“Why didn’t we do something about corruption? The list goes on. “

--Ryan C. Crocker, NY Times, August 21, 2021

“The State Department dawdled for months in getting visas for Afghan allies and, as the Taliban seized cities, towns and provincial capitals, it neglected contingency planning for a possible evacuation. Still, it is enraging to watch a parade of dunderheads preen on cable — anchors and generals and chatterers — the same people whose cheerleading ensnared us in 20 years of quicksand in Iraq and Afghanistan. We didn’t know 9/11 was coming, even though we should have. We didn’t know Jan. 6 was coming, even though we should have. We didn’t know the Potemkin government in Afghanistan that we’d propped up for two decades would fall in two seconds, even though we should have. What else don’t we know?”

--Maureen Dowd, NY Times, August 22, 2021

“The collapse of the American-supported government in Afghanistan, after 20 years of effort and billions of dollars, is just the latest setback in a long narrative of failure.”

--Jeremi Suri, NY Times, August 30, 2021

“Before this summer, in other words, it was possible to read all the grim inspector general reports and document dumps on Afghanistan, count yourself a cynic about the war effort and still imagine that America got something for all that spending, no matter how much was spent on Potemkin installations or siphoned off by pederast warlords or recirculated to Northern Virginia contractors.”

--Ross Douthat, NY Times, August 31, 2021

"suckered by the generals, the overweening Ivy Leaguers and the Blob, the expense account monsters who keep this town whirring and always have a seat at the table, no matter how wrong they were, and are.”

--Maureen Dowd, NY Times, September 05, 2021

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.”

--President Dwight Eisenhower, April, 1953

“Who won the war on terror? American defense contractors, many of which were politically connected companies that had donated to George W. Bush’s presidential campaign, according to the Center for Public Integrity, a nonprofit that has been tracking spending in a series of reports called the Windfalls of War. One firm hired to help advise Iraqi ministries had a single employee — the husband of a deputy assistant secretary of defense. For George W. Bush and his friends, the wars in Iraq and Afghanistan achieved a great deal. President Bush got a chance to play a tough guy on TV. He became a wartime president, which helped him win re-election. By the time people figured out that the war in Iraq had been waged on false pretenses and the war in Afghanistan had no honorable exit plan, it was too late.”

--Farah Stockman, NY Times, September 13, 2021

“Let's be clear: our legislative system is run as a form of legalized bribery. We, the people, are NOT the constituents; we are the victims.”

-- jim, Orono, NY Times, September 17, 2021

“But the generals who misled Congress and the American public about the wars in Afghanistan and Iraq have not needed to worry about negative consequences for their careers. After 20 years of conducting a disinformation campaign about what was really happening on the ground, not a single U.S. general has faced any punishment. The reverse happened — they were praised for their deceptively upbeat assessments and given more stars, and when they retired with generous military pensions, they landed high-paying jobs on corporate boards, further profiting from their dis ingenuousness.”

-- The Intercept, September 26, 2021

Here Comes the Reality of the IRS Modernization


“If freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter.”

-- George Washington


No one ever got appointed to a cabinet position or a position in the Federal Government at the highest level by picking someone randomly off the street. First, you must have plenty of money and should have contributed to the presidential candidate in ample amounts. Forget about campaign contribution limitations. That’s why the Political Action Committees (PACs) were created. Yes, you can pretend to be anonymous. But, those in the know are fully aware who you are and how much you contributed and keep scores. When the candidate gets elected, you get rewarded in proportion to your contributions (bribes). Of course, it helps if you have gone on to one of those ivy league schools such as Harvard, Yale, Princeton, well you know how it goes without any further elaboration.


Once you get appointed to a top level position, you never leave Washington DC even when the administration loses power and the political party is no longer in the majority. You hang around, get appointed to one of those “Non-Profits” or "not-for-profits", and then again, if you have accumulated enough money, you can well afford to simply stay at home and wait for one of the big-name contractors to call you to appoint you as one the members of the board of Directors. That appointment is not for your knowledge or honesty or integrity, but for the contacts you had successfully cultivated during your sojourn in the Government. Your contacts will get you additional business where you crawled in as a Director, Vice President, Consultant, or whatever, in the fond hope when your contacts lose their jobs, they have a place to go to hang their hats. The cycle repeats regardless of the party and works beautifully.


You want an example? Look at the Hon. Charles O. Rossotti, the former IRS Commissioner. He was a total failure while he was the Commissioner at the IRS. He repeatedly lied to the United States Congress about the information system Modernization at the IRS. He was also allegedly blackmailed by the old-timers who were sabotaging the Information System Modernization. Now, just Google his name and see how many directorships he holds, and the financial institutions he is a member of! It is not for nothing! If you have the money, you can go very far indeed regardless of how many people you trample, and how many lies you have told, and how corrupt you are! After all you have the money and the contacts! Some say, "You cannot take it with you!" But what counts is the here and now. On the death bed does anyone think how much they own?


Does the United States Congress care? Of Course not. They do the same thing—at least most of them.

An Example: How Sabotage was promoted.


“Gina Garza, the current CIO, is retiring on May 31 [from the IRS] after more than 34 years of services. Garza began her IRS career in 1984 as GS-3 mail clerk at the Austin Submission Processing Center and soon thereafter accepted a permanent position in revenue accounting. She moved into IT in 1987 and moved up through the executive ranking. Garza became CIO in July 2016, replacing Terry Milholland. The IRS requested $3 billion in fiscal 2020 to continue its modernization efforts. At the same time, Garza also was CIO or deputy CIO during a major data breach of taxpayer information and the identification of cybersecurity flaws in major systems like free e-file.”

--Jason Miler, Federal News Network, May 7, 2019.

Mail Clerk to IT. IT to CIO. Only in America! Only at the IRS!! What will she do next? IT to medicine and become a brain surgeon!

E-Government: IRS Modernization–Will Third Time Be the Charm?


By Elana Varon, CIO APR 1, 2001 8:00 AM PDT, READER ROI.

Learn how better project management is giving the IRS its best chance to succeed.


Find out why the IRS is still facing an uphill battle.

In January, just three months before the internal revenue service planned to field a new call center application, its first system upgrade in a $10 billion modernization project, its CIO of almost three years, Paul Cosgrave, quit. Not surprisingly, eyebrows were raised. During the past 25 years, the IRS has twice tried–and twice failed–to modernize. In 1978, then-President Jimmy Carter halted a project to network the IRS’s central databases–its Master Files–with its business applications, because the agency had not figured out how it would protect taxpayer privacy. In 1995, Congress in effect pulled the plug on a second effort, which involved multiple new systems, after the IRS had spent 10 years and $2 billion with, in Congress’s view, very little to show for it. Now, after spending $231 million without actually deploying a single system, Cosgrave jumped ship. (See “The Revolving Door,” Page 66.)

Was this third modernization project on the brink of disaster? Perhaps not.


Bad management–projects without business sponsors, vendor contracts without clear deliverables and no consistent accountability for systems development–sank the IRS’s last modernization effort, prompting Congress to make documented management procedures a condition of funding. As a result, IRS executives and observers who monitor the agency say things are different this time. Now senior business managers must sign off on every proposed system before IT gets a go-ahead to build it. The agency’s contractor, El Segundo, Calif.-based Computer Sciences Corp. (CSC), gets detailed work orders. And unlike last time, the IRS isn’t trying to do everything all at once. Although agency executives think it could take at least a decade to achieve their grand vision of integrating their databases with all of their business applications and abolishing paper returns, only two years’ worth of projects, representing $625 million of the total $10 billion price tag, are currently on the drawing board. By focusing on the short term, says Bill Duncan, a principle with Project Management Partners in Lexington, Mass., the IRS appears to be approaching the project correctly. Large projects are most successful when they’re broken into small chunks, he says.


And this one had better be successful. The stakes for the IRS are extremely high. Our collective patience with the agency is wearing thin, especially when taxpayers compare the quality of its services with those offered by the banks, credit card companies and others that handle their money. If this project fails, the IRS will still collect taxes, but it’ll be collecting them from increasingly angry taxpayers. Angry taxpayers mean angry congressmen. And angry congressmen mean budget cuts, media scrutiny and micromanagement.


“It gets right to the heart of people’s confidence in their government,” says former Sen. Bob Kerrey (D-Neb.), now president of the New School University in New York City, who sponsored a 1998 law that set the current modernization project in motion. “Every American who pays taxes has a relationship with the IRS,” he adds, and the belief that it’s there to serve not to harass the public influences people’s willingness to declare what they owe every April 15.


[On Feb. 27, just before going to press, the IRS appointed John Reece, former vice president of IT at Time Warner, as deputy commissioner for modernization and CIO. An IRS spokesman said another IS executive reporting to Reece would be hired to assume Cosgrove’s responsibilities for IS operations.]


A New Mandate


The 1998 IRS Restructuring and Reform Act gave the agency a new mandate: treat taxpayers like customers, not perpetrators. The law set taxpayer service goals for the agency that can only be accomplished with new technology. Congress wanted taxpayers to be able to access their accounts online, file electronically and receive straight answers to their tax questions via telephone the first time they ask.


The IRS’s current systems are decades old and hard to use. More than 200 accounting, research and auditing systems aren’t integrated, so IRS agents can’t even fix simple errors easily, much less tell whether it’s their records or yours that are wrong. The agency’s Master Files, as it calls its central databases of tax records, is a legacy of the Kennedy administration, still running software written when the IRS first fielded the system in 1962. To illustrate their problems, officials frequently brandish a black-and-white diagram that shows a call center representative surrounded by 10 terminals. Arrows from these terminals connect to a dozen boxes, each representing a different system, with more arrows connecting these to another layer of applications until it’s impossible to trace the links among them.


The first phase of the new IRS modernization is intended to begin untangling this Web. The nine systems to be fielded between now and 2002 include a revamped Master File based on modern database technology. If this Master File works, it will feed all IRS business applications and provide online access to taxpayer accounts. Taxpayers who file electronically would benefit first, getting their accounts updated in real-time and their refunds in hours. The projects include:



“Every dollar and line of code has a business sponsor and satisfies a business need,” says Bert Concklin, associate commissioner for business systems modernization, who is running the project day to day. That was rarely the case in the past, he says.


A Legacy Of Failure


Past modernization projects were ostensibly geared toward greater efficiency and customer service too. A quarter century ago, when the IRS took its first stab at modernizing, its stated goal was to reduce data entry errors and make audits go more smoothly. That’s when officials first suggested upgrading the Master File and networking it with business applications used by its agents.


That project, called the Tax Administration System (TAS), would have cost approximately $750 million to $1 billion, but it never got off the ground. While TAS was on the drawing board, a technical review ordered by Congress questioned whether the agency could keep taxpayer data away from prying eyes. It was 1977, and revelations that the Nixon administration had used IRS records to attack its political opponents were fresh in the public consciousness. Less than a year later, then-President Carter pulled the plug. Michael Murphy, president of the Tax Executives Institute (TEI), a Washington, D.C.-based lobbying organization for corporate tax officials, was an IRS employee at the time (he eventually became deputy commissioner, the number-two post at the agency). He says officials failed to test the political waters.


Stung by the backlash, the IRS waited to try again until a hardware and software meltdown paralyzed its Philadelphia service center in 1985, creating a political firestorm. The new project again featured a state-of-the-art, networked Master File. The agency also began to develop plans that called for a new imaging system to capture data from paper returns and systems to enable taxpayers to file electronically. Although the IRS made the assistant commissioner for information systems, Hank Philcox, the agency’s first CIO in 1990, Philcox had little control over the agency’s systems or its IS staff. Many of the IS employees reported to the directors of what were then 10 regional service centers, where tax returns were processed. As a result, projects relating to modernization were managed by people who weren’t accountable to the CIO and built without reference to any enterprisewide standards or vision.


In 1996, after spending $299 million, the agency cancelled the imaging project that had been touted as a cornerstone of modernization because officials determined it wasn’t cost-effective–and after an internal audit concluded that the IRS didn’t have enough technical expertise to deliver it. One source familiar with that project, who requested anonymity, says the field offices where it was to be deployed didn’t really want it. “We ended up with systems that didn’t work or were stovepiped,” says Robert Albicker, former IRS deputy CIO in charge of systems and currently deputy associate commissioner. And when projects flopped, “we were really good at pointing fingers,” says Toni Zimmerman, who was named acting CIO when Cosgrave left.


Furthermore, past IRS commissioners never seriously entertained the idea that modern information systems would change many of the agency’s existing business practices. According to Philcox, who left the IRS to become CIO of Reston, Va.-based software services vendor DynCorp in 1995 and is now semi-retired, key legislators in the Democrat-controlled Congress told the IRS to focus on catching tax evaders, placing a lower priority on the project’s taxpayer service-related goals. “That changed dramatically [after the 1994 election] when Congress became Republican,” Philcox recalls. The change in power created a bipartisan coalition for IRS reform. Among other mandates, lawmakers told the IRS that it wouldn’t get money for new systems unless it applied the best IT management practices from the private sector.


All Together Now


With its budget and perhaps its autonomy at stake, the IRS has begun to get its house in order. The General Accounting Office (GAO), which scrutinizes the agency’s management practices for Congress, says the IRS has improved its systems development and IT management practices to the point that officials now know how they’re supposed to run the project. Not a ringing endorsement, perhaps, but typical of government assessments of current IRS performance. As Randy Hite, who as director of IT systems issues for the GAO is in charge of IRS IT systems oversight, says, “The glass is half full.” The IRS is training its project staff to follow its systems development methodology, is staffing up its program management office under Concklin and has drafted an IT architecture. In recent reports, the GAO sites these steps as positive. Now, the IRS has to deliver.


And quickly, says consultant Duncan, for the sake of morale and political support. “There need to be milestones defined so that people can recognize they’re doing something and celebrate the success,” he says. “And you have to change your definition of success as you move forward. People aren’t going to think you’re successful five years from now [based on] how you define it today.”


Duncan figures the IRS has a year and a half from the time it defines users’ requirements for each system to field it if the agency is to keep pace with changes in technology. According to a project schedule provided by the IRS, most of the nine systems under development currently fall in that time frame. The planned financial management system, telecommunications upgrades and systems management applications for the IS department will take up to two years to deploy. Another factor working in the agency’s favor is that the IS staff and business-side executives are working more closely than ever before. When the agency reorganized its business operations–another mandate of the 1998 IRS reform law–IRS Commissioner Charles Rossotti put the CIO in charge of the entire IS staff. “The IS function was elevated tremendously in terms of stature,” says Philcox. Now, the CIO doesn’t have to scrounge for money from business units’ operating budgets, he says. The CIO sits as an equal with business executives on an executive steering committee headed by Rossotti. This committee meets monthly to review how the modernization project is progressing. Zimmerman says the forum, carried over from meetings senior managers held while they were working on Y2K upgrades, encourages people to come clean about problems before they threaten a project. This group also has to approve each new stage of a project.


That alignment is critical, says John Thomas Flynn, former California state CIO and now a CEO with Sacramento, Calif.-based TechEd Strategies. In the mid-’90s, Flynn pulled the plug on nearly a dozen IT projects in California because the state had no idea what it was getting for the hundreds of millions of dollars these projects cost. When he started asking for monthly reports on project budgets and requiring quality checks on what vendors delivered, he found money being wasted on systems that didn’t work. He doesn’t just blame the vendors. “I’ve had directors of large government agencies tell me that an IT project was 20th on the list of things important to them,” says Flynn.


At the IRS, Concklin say his main contribution so far has been to bring order to the process of assigning work to CSC and holding the company accountable for its performance. “When I arrived [June 2000], converting requirements [for a project] into a task order was in a relatively primitive state,” he says. Prices, deliverables and deadlines were ill defined, exposing the IRS to cost overruns and delays. Now work orders detail more specifically what CSC has to do to get paid. And every month, several dozen IRS and CSC managers meet to review the schedule, budget and progress of every project. That’s a far cry from the past, when IRS managers and vendors rarely met face to face and communicated mainly through memos. It’s no wonder that when it came to IRS modernization, failure was as sure a bet as death and taxes.


Trouble Ahead, Trouble Behind


The IRS hasn’t put the bad old days completely behind it. TEI’s Murphy, the former IRS deputy commissioner, says there are plenty of ways this current modernization project can go awry. One fear is that the agency will lose momentum while it’s searching for a new CIO and then again while getting the new appointee up to speed. Before Reece was named to replace Cosgrave, Commissioner Rossotti downplayed the importance of Cosgrave’s resignation, saying that public sector CIOs inevitably come and go. He insisted that “one of the things Paul [Cosgrave] and I tried to do is set up a management structure and process that is robust enough not to be dependent on the heroic efforts of one individual.”


Faith that the project will stay on track still rests with Rossotti. “We’re very comfortable with him,” says a congressional staff member who is following the project. But Rossotti has less than three years left to his term. President Bush could reappoint him, but Rossotti hasn’t said whether he’s interested.


Another worry is whether Congress will continue to support modernization. The agendas of 535 members of the House and Senate, cobbled together in tax and budget bills, often send conflicting messages to agency managers about how to invest their IT budgets. “Part of the problem with the IRS’s information technology is that they’re trying to design it to accommodate a moving target–the tax code,” says Pete Sepp, a spokesman with the National Taxpayers Union in Alexandria, Va., which lobbies for lower taxes and tax simplification. “If you find that the more complex areas of the tax code are the ones people make more mistakes with, you’re going to have to devote a larger proportion of upgrades to the systems that spit out tax returns for audits, [rather than to customer service or electronic filing].”


Finally, there’s the risk inherent in every large IT project that the new systems simply won’t work. That’s particularly worrisome because the new IRS Master File, designed to be accessible by the public, obviously will be more vulnerable to hackers and unscrupulous employees. The IRS’s ability to protect taxpayer records from unauthorized access by its workers has a checkered history. Concklin says officials know they have to get security right, but the details are classified: “All I can say is we’re approaching it in a professionally rigorous and contemporary way. When these systems are up, people can make a judgement whether this is something that is trustworthy.”


If the public decides it isn’t, all bets are off. Once taxpayers lose confidence, “you run a risk that the compliance rate will slip,” says Murphy. If that happens, he worries, it would set the IRS on another downward spiral, forcing it to rely on its legal powers, rather than user-friendliness, to get people to pay what they owe. He notes the IRS generally gets low approval ratings from the public. “People say that because there’s a certain amount of fear of its power,” Murphy says. All the IRS needs is a few horror stories. Once that happens, it will be almost impossible to earn back taxpayer confidence.


And that will be another $10 billion down the drain.


Here is The Background


“If liberty means anything at all, it means the right to tell people what they do not want to hear.”

--George Orwell

The Internal Revenue Service (IRS) is headed by the Commissioner. IRS is an Agency of the Department of the Treasury.
IRS consists of two major Divisions. The Taxpayer Division and the Information System Division (IT).
The Information System Division is supposed to provide all the hardware and software infrastructure to enable the Taxpayer Division to do their job, which is to examine and or audit the tax returns submitted by the taxpayers.
To cite an analogy, the Taxpayer Division is the dog, the Information System Division is the tail.

The problem began when the tail began to wag the dog.

The IT Division consists of a horde of programmers who were committed to the programming language COBOL. COBOL is a 1960's language to handle commercial applications. It cannot handle modern, recent applications with ease. Indeed, some applications needed by the taxpayers cannot at all be handled by COBOL. This is where the problem begins. When the taxpayers were annoyed by the lack of responsive customer service by the IRS, the United States Congress sensed this annoyance. Congress demanded that the IRS should be more responsive to the taxpayers in various areas. These areas include electronic filing, matching the W-2 and 1099 with the tax returns promptly, quicker refunds, and numerous others. The old-timers who were addicted to COBOL and the IBM mainframe mindset were unable to meet these expectations. Hence, contractors were hired. The old timers resented this encroachment of contractors into their territory. Various methods of sabotaging the contractors' work ensued, such as feeding the contractors the wrong information, and by not giving them enough information about how the tax processing software is structured. Often, the contractors were fed misleading information. IRS created a separate division to supervise the contractors. These divisions were variously called Systems Engineering, Requirements Gathering, etc. When these new divisions began to to take charge of modernization, the old timers systematically began to sabotage their activities, by not providing the requisite information, and refusing to collaborate.

The contractors could not perform in this environment. The contractors needed these projects to survive. After sensing that the IRS is not going to provide the required information to do their job, the contractors began to take full advantage of the situation. They assigned the least skilled employees to the IRS modernization projects. The contractors started proposing various unnecessary projects to the IRS. To cite an example, during one meeting, attended by Srinivasan, an employee of the TRW said he was modeling the arrival rate of the transactions for the past several months!! Srinivasan pointed out that this issue had been resolved a long time ago by Dr. Peter Denning of the MIT in 1978, and the results have been published in the Journal, "Computing Surveys" of the Association of Computing Machinery in 1978. This remark put an end to that "modeling" effort saving the Government a few million dollars, in addition to annoying TRW. Then there was the IRS employee George Economou. Srinivasan assigned him to take the minutes of this meeting. George Economou left out all critical elements in his minutes of the meeting! He was on the side of the old timers!! The executives at TRW had high level connections at the IRS, and requested that Srinivasan be not allowed to attend any more meetings. Of course the IRS executives were more than willing to oblige.The IRS counterparts assigned to do the modernization also sensed the lack of cooperation by the old time COBOL programmers. Programs and projects began to fail like dominoes. Billions of dollars went down the drain. But does anyone care? Of course not. Just pocket the money and be happy.

The sabotage was perpetrated by several old-timers. Among them were, John Yost, Bruce Pitt, Tom Lucas, Lauretta Brown, .......it is a long list. Some of them, even after retiring, go to work with the contractors-- not to do any work, but this is called walk around money.

Several Chief Information Officers (CIO) were hired one after another, in the fond hope they will make the information modernization will succeed. It is rather unfortunate that when someone new was brought into the IRS, they were never given the background information that surrounds the organization. They were all black mailed, and they left. Clueless, the CIOs were all fired by the Commissioner. When a new Commissioner was appointed, he was also clueless. Who is going to bell the cat? Who is going to tell the commissioner why the IRS modernization systems were failing by the droves? Not the old timers who were sabotaging all modernization projects.

After several failures of modernization, wasting several billion dollars of taxpayer money, the President decided to bring someone from the IT industry. That happened to be Mr. Charles O. Rossotti.

But, how does the blackmail work? There lies the beauty. As you know, the IRS is in the business of collecting taxes. There is a filing season which starts from January to April of each year. For corporations, this season may vary. The filing season must successfully go through. Added to this major task, the US Congress keeps changing the tax laws so frequently for the IRS to keep track of. All the tax law changes must be incorporated by the Information Systems Division to successfully complete the filing season. If some glitch happens, there will be a hue and cry from the taxpayers, and the newspapers will take up the bull horn. All it takes to blackmail the new CIOs, executives, and the Commissioner is to subtly hint that if they mess with the old-timers that the filing season may not go through after all. Done. Everyone falls in line, even to the extent of lying to Congress about the progress of modernization. Honorable Charles O. Rossotti, the former Commissioner, did this very well. One of the CIOs that came, found out what was going on, quietly departed within a few months to the Department of Homeland Security. The strange irony here is that no one, neither the Commissioner nor the CIOs had the guts to call the FBI and have them investigate this sabotage as a criminal matter. But, that requires a spine, which most of us lack. Even more, if they did act to start an investigation, you never know where that will lead. Your own background may come under investigation. How did you get where you happen to be? Not through honesty. In the Federal Government, especially around the beltway, "Honesty" is a code word. If anyone knows you are "honest", it implies that you won't play ball. When the Government makes it easy to just hold your nose and pocket the money, there is absolutely no reason to rock the boat.

The old-timers, the COBOL programmers, redefined the modernization as changing the computer mainframe provided by IBM. The IBM mainframe got repeatedly changed, and presto, they declared, modernization is successfully happening. IBM was happy. They also had a captive customer. The IRS employees were well-fed. What else do you want? While this was happening, other mainframe manufacturers got annoyed and complained to the Government Accounting Office (GAO), now called the Government Accountability(GAO) Office. GAO kept producing reports after reports. Who cares. Finally, just for show, the IRS launched a competitive bidding for the mainframe. IRS ended up choosing UNISYS. UNISYS proposed their version of the mainframe called ITASCA, still under development. But, no one cared about the software where the real modernization needs to take place.

Finally, complaints began to mount that the modernization that was to produce modern functionality along with the development of the Internet was not happening. Congress started asking questions. Congress came to the conclusion for some unknown reason that the IRS Information System employees were incompetent, and the IRS should hire "outsiders" who were competent technically. IRS started the hiring process.

There was an engineer, by name, N. Srinivasan. He had two Masters degrees in Engineering. Around 1995, he was working at the Wright-Patterson Air force Base in Dayton, Ohio. He was staying in a hotel. Around 3 AM on one morning, the telephone rang in his hotel room. When Srinivasan answered the phone thinking that there may be a fire in the hotel or some such emergency, he heard from the other end someone hollering, "we are calling from the IRS." It was an ear splitting voice. Srinivasan replied that he has already paid all the taxes every year. Talking at the other end was a gentleman by the name Mr. Jim Robinette. Mr. Robinette hollered that this call was not about the taxes, but about IRS Information System Modernization. He went on to add that the US Congress had mandated that until the IRS hired "competent" technical managers, no more funding will be forthcoming for modernization. Mr. Robinette asked Srinivasan whether he would be interested in joining the IRS to modernize their systems. After a brief discussion, it apparently sounded interesting. Srinivasan said, "yes." Mr. Robinette immediately said that he will FAX the forms, and all that Srinivasan had to do was to sign his name, and FAX the forms back to the IRS. Surprisingly, all the forms were at the front desk of the hotel by 4 AM. The clerk called Srinivasan in his room. Srinivasan went downstairs, looked at the forms, and surprisingly all the fields etc., had already been filled out. Srinivasan signed the forms, and FAXed the forms back to the number that was provided. By 5:30 AM, the Offer of employment was on hand.

Frankly, Srinivasan did not know what he was getting into. He was indeed diving into a shark tank. Srinivasan joined the IRS in February, 1995. Along with him, a few other outsiders were also hired. One of them was Mr. Cecil Hua. It turned out Mr Cecil Hua was indeed very clever. After, the new hires joined the IRS, to their dismay, they found out that the IRS had no intention of using the newly hired employees' expertise for modernization. Even more aggravating to the old timers was, the new hires were called the "Blue Ribbon Hires". In all discussions the newly hired employees were kept out of the loop. The IRS was also sneaky. The top executives never had any intention of modernizing the information systems. They promoted some of the old timers as "new hires" just to keep an eye on the new hires as they were the "outsiders" and report back to them what the "new hires" were up to.

One such employee was Mr. Behroot Sabet, an Iranian of some sort of Muslim persuasion who was willing to do anything, yes, indeed anything, regardless of whether it was legal or not, as long as he got a raise and or a promotion depending on the illegal act he was called upon to do. An old-timer, Mr. John Yost played a major role in sabotaging any and every effort by the new comers. Indeed, he was adept at it along with his colleagues. A modernization task-force was formed. Srinivasan was appointed to lead it. It was assigned the acronym "SIAM" task-force. The purpose was to define what "Modernization" entailed. Mr. Yost showed up to contribute the knowledge of the "legacy" systems and tried his best to be disruptive. Despite the disruptions, the task-force proceeded. Mr. Yost figured that the activities of the task-force was prejudicial to his interests in various respects, among them, sticking to COBOL, sticking to the good old "CFOL"-- an acronym for "Corporate Files online". "CFOL" was only a fraction of the taxpayers database that was online and accessible. To access the rest, one had to go through a convoluted process, which consumed time and effort that caused considerable delay in processing the massive tax returns submitted by the taxpayers. After one such meeting, Mr. Yost went back, and from Mr. Bruce Pitt's Office (One of the Senior Executives), announced over the telephone that the SIAM task-force was dissolved!! Note that he was not the one who convened the task-force and Mr. Yost had no such authority. Who was he to dissolve the task-force? Hey, such was the power of the old timers.

Mr. Cecil Hua was part of the task-force. He was merely a spectator without any contributions. Mr. Hua looked left, right, up, and down. He concluded that the IRS power structure was entirely slanted towards the old-timers, as manifested through Mr. John Yost, and thus concluded if you can't beat them join them. Join he did, and thus became part of the sabotage efforts. Mr. Cecil Hua had the remarkable talent to hide himself on issues pertaining to modernization, and thus avoided all efforts to shoulder any assignments, thereby gaining the trust of the old-timers. Mr. Hua's only goal was not to do any work, and just float around, the idea being, if you did not do any work, no one had anything to find fault with. Mr. Hua had a remarkable ability to manage upwards, and adept at brown-nosing. You can always see Mr. Hua in his boss's office uttering platitudes and praise which all of them apparently liked-- gave them all an ego boost.

An exception to the old guards was Mr. Dick Oakes. He was an engineer. He had an engineering degree, while most of the rest of the old timers merely had a high school education. Mr. Oakes understood the importance of modernization. Indeed, one could talk to him. He listened. The pressure from the Congress became more intense. The IRS had to show them something significant. Mr. Oakes, a Senior Executive himself, convened a task force consisting of Senior Executives not only from the Head Quarters, but also from the ten service centers. to define what modernization entailed, and at least partially. The task force was to be held at Oxen Hill, away from the main IRS Head Quarters. He nominated Srinivasan to head the task force. Srinivasan told Mr. Oakes to choose someone else, as the task force was going to be sabotaged like the SIAM task force by John Yost. Mr. Oakes assured Srinivasan that this time, he as a Senior Executive, is going to be part of the task force, and hence will ensure no sabotage will occur. Knowing how Mr. John Yost acted, Srinivasan demanded that Mr. Yost should not be part of the task force, to which Mr. Oakes agreed, with reluctance, as Mr. Yost commanded a great deal of power among the old timers. In the interim, a transition approach was created. Srinivasan had proposed a comprehensive Disaster Recovery Plan, and reduced the ten Service Centers to three Corporate computing Centers. One of the old time employees, probably a Senior Executive at the IRS who had retired and joined the contractor team told Mr. Oakes that no Disaster Recovery was required, because to HIS knowledge no disaster had occurred in the past. Mr. Oakes called in Srinivasan, and told him about that eloquent conversation that emanated from the retired Senior executive, now working as a contractor. Srinivasan told Mr. Oakes that if the disasters occurred everyday, they won't be called disasters, but just another rainy day. Mr. Oakes after listening, told the old timer that he was no longer an IRS employee, and Srinivasan was, and indeed Srinivasan was selected to head the task force because of his qualifications. End of that story. At the end of the task force, a report was produced. The cost of the reports was fully paid for by Srinivasan ($600 +) to expedite. Srinivasan was not reimbursed.

The Prevailing Atmosphere at the IRS During the 1995 and Thereafter

"In the U.S., free speech and the press are protected by the First Amendment. It has a clarity unmatched by modern legislators and declares that Congress shall make no law... abridging the freedom of speech, or the press."

--Jacob Rees-Mogg

One can find employees watching pornography on their computers, playing the stock market, staring at the Princess's Diana's photograph on their computer screens, and other activities unrelated to IRS's mission. Several employees were running their own businesses utilizing IRS resources, on IRS time. Those employees such as Mr. Srinivasan who wanted to do productive work got useless assignments which went by the name of "Alternative Analysis", or some such. It was impossible to find resources for such projects, because after all everyone knew no one really cared about modernization. Several employees routinely stole copying paper from the copy machine room. Indeed, many stayed behind after office hours to steal copy paper, and even had the audacity to charge over time, because they stayed beyond the normal office hours. During lunch break, in the cafeteria, the conversation around the table revolved around who is having sex with whom. Indeed, one of the employees, Dick Wexelblatt routinely got emails at home that described the sexual escapades at the IRS. He had to tell the email senders not to send such emails because he and his wife shared the same computer at home !!

Mr. Steve Benigni who got promoted to Branch Chief kept doing his Crossword Puzzles aggressively all day, planning his vacations, and managing the time-shares he owned overseas. You could not interrupt him for any work-related reasons, other than gossip, as it took his precious time away from his extracurricular activities such as doing crossword puzzles.

Mr. Cecil Hua was getting desperate to get promoted as a supervisor, as the supervisors never did any work other than watching the employees assigned to them, as though watching the cattle grazing in the pasture or watching the chattels. When an announcement was made to nominate employees for a promotion, Mr. Cecil Hua promptly sought the help of several senior executives, including Mr. Reggie McFadden, who at that time was the head of the Systems Engineering Division. Besides, Mr. Cecil Hua had proved himself on the side of the "Old timers." Just to show that Mr. Cecil Hua had indeed did some work, he was asked to produce a document titled, "Case for Action", the substance of which was intended to justify the need for information system modernization. Produce he did-- a two page trash, full of grammatical mistakes. It was shameful. The irony indeed was that the case for action existed a long time ago and was justified several years ago.There was absolutely no need for any further need for "Case for Action".

Well, it so happened that no one else wanted a promotion from the Systems Engineering Division, hence by default, Mr. Cecil Hua got selected, sent to executive training for six months, and came back well fed. Presto, Mr. Cecil Hua became the head of the systems engineering division!

Mr. Reggie McFadden was a new comer to the IRS. He is a retired Colonel from the military, an African American, was sincere, knew more than the others technically. It has always been the plan to get rid of him. After seeing the Chaos Memo, it was the last straw. Mr. McFadden was transferred to the Austin Service Center. Mr. Cecil Hua took his place. But Mr. Hua did not have a clue what his job entitled, nor did he have a backbone. Everyone sensed it. Indeed Lauretta Brown was alleged to have called him several profanities. Mr. Cecil Hua hid himself in his private office and closed the door shut.

Well, time passed. No modernization was occurring. Some employees were running their own businesses on IRS's time, while being paid by the IRS. There was another employee by name, Mr. George Yu. He always answered his telephone in Chinese, "Nee Ha". For some unknown reasons, Mr. Yu always had always conducted his telephone conversations on the speaker phone when he answered the call. The conversations were all in Chinese. When everyone had one inadequate computer in their offices, Mr. George Yu had two well-equipped computers. No one knew what Mr. Yu was doing for the IRS. In several meetings it was not unusual for discussions to break-out in Chinese. One had to point out that the national language of the United States was still English. There was another employee who was studying to become a priest. There was yet another employee who was studying to become a lawyer. He rarely showed-up for work. No one dared to ask him any questions because allegedly he had some sort of degree from the MIT, although he was a zero in knowledge related to information system modernization. Whenever he showed up for work, everyone paid obeisance to him, as he knew how to manipulate the system!!

Srinivasan was detailed to the Treasury Department, the purpose was to oversee the IRS modernization efforts. After observing all that was going on at the IRS modernization, the Treasury CIO decided, the hell with it. The Treasury CIO was originally from the secret service. Srinivasan was also drafted by the CIO ( Mr. John Murray) of the Financial Management Service (FMS) to produce some sensitive documents which required a nuanced writing. Mr. Murray will tell Srinivasan to go home and write those memoranda and the documents, the reason being, if anyone found out that Srinivasan was the one writing the memoranda and the documents, there will ensue a pandemonium, as Srinivasan was an outsider for the FMS. When Srinivasan asked Mr. Murray why he was asking Srinivasan to write these sensitive documents, Mr. Murray responded that he did not have the staff to write sensitive materials with nuance so as not to offend the target parties involved.

Hon. Rossotti, the Commissioner, Arranges for Physical Assault

As mentioned before, Mr. Rossotti (Before he became "Honorable") was appointed as the Commissioner to implement the modernization. The reason he was chosen because of his wealth, and he had founded an Information Technology (IT) company, American Management Systems (AMS), one of the "Beltway Bandits".

Of Course he was surrounded by the old timers. Now that he had become "Honorable", he also had the authority to bring in his buddies as executives at the IRS to navigate the modernization efforts. Mr. Levitan was one of them. He also brought in other private contractors. Well, he owed them something it seems. These contractors came up with the idea that the IRS taxpayer Division should be split into four divisions. No one had any clue that the fundamental problem was in the software. The new contractors were dealing with the old timers. The old timers fed the wrong and misleading information to the contractors. As many of the projects began to fail one after another, Hon. Rossotti allegedly started rattling the cage. He started firing the Chief Information Officers (CIOs). Allegedly, he was reminded that if the Hon. Rossotti did not "behave", the filing season may not go through. If the filing season did not go through, who is going to shoulder the blame? That will be the Hon. Rossotti, the Commissioner. The software was all in COBOL, and it was all tangled in spaghetti code, ill documented, the knowledge of the code resided in the minds of the old timers. No documentation! The contractors, regardless of how smart they were, could not figure out the software architecture, because there was no architecture! That did not stop the contractors. Projects after projects were proposed. In the Federal Government, it seems mandatory that the projects spanned multiple years. Anyone who suggested that a software architecture was needed and the projects had to be incremental, became persona non grata. These mammoth projects had multiple mile-stones. It is customary in the Federal Government for the Commissioner to testify before the Congress about the progress of the modernization. While the projects were failing, the Hon. Commissioner testified under oath, that everything was fine and dandy (that is, lied profusely).

By now, essentially, the contractors were running all modernization projects. As part of the modernization, a project to process Form 1120 came up. By now, the GAO had mandated that every information technology project required a "Business Case" before the project was funded. The PRIME contractor proposed a business case for this project. The contractor figured that this indeed was a golden opportunity to pocket a significant sum of money. The contractor concocted a business case in a convoluted way. In the business case, they threw in several alternatives. Each alternative was very complicated in their own way. To make sure no one in the IRS can understand the business case, the contractor threw in a lot of Mathematics, probability Theory, and a few other confounding issues. It went through step-by-step through the IRS, and got signed off, and finally reached the desk of Hon. Rossotti. The commissioner assumed that everyone who had signed-off on the business case, must have reviewed the contents. Under that assumption, he also signed off the business case, which was saturated and marinated with fraud and several misrepresentations.

This business case had a direct impact on the taxpayer division. It fell into the hands of a Senior Executive, Mr. Andre Re. After he tried to understand it, he became confused. His division was responsible for using the product of this business case that was intended to audit corporate tax returns. Mr. Andre Re went around asking who in the IRS can go through this arbitrarily concocted and confusing business case and give him the truth. He was told that the one guy who will tell him the truth was Srinivasan. It was a sunny, Friday afternoon. Around 3 PM, Srinivasan got a call from Mr. Andre Re. He asked Srinivasan to come to his office, which was located near the Union Station in Washington DC. Srinivasan was located at the New Carrollton Office. Srinivasan went to Mr. Re's office. Andre Re asked Srinivasan the favor of reviewing the business case and provide him whether it will accomplish what his division needed. Mr. Re wanted the comments by the Monday morning.

Srinivasan took the Business case home. Read it twice, thrice. It appeared confusing. The fourth reading revealed the fraudulent use of Mathematics in justifying convoluted alternatives in implementing the project, which was sure to fail. To keep the long story short, here is Srinivasan's analysis of the Business Case:

By now Hon. Rossotti had appointed four Commissioners for the four Divisions that had been created under the advise of the newly hired contractors. All the four Commissioners got a copy of Srinivasan's analysis of the Business Case. All hell broke lose. Commissioner Hon. Rossotti had to cancel the Business case, because based on Srinivasan's analysis, it became obvious the whole business case submitted by the Prime Contractor was fraudulent. Senator Grassley's Office also took notice. Mr. Dean Zerbe of Senator Grassley's Office wrote a letter to Hon. Charles O. Rossotti. Hon. Rossotti, after receiving Senator Grassley's letter, wrote a card To Srinivasan "Congratulating" Srinivasan. This was not a benevolent congratulation, but a venomous "Congratulation", written with poison ink. Later on, a journalist, George Guttman, who used to cover the IRS for news papers told Srinivasan that Mr. Dean Zerbe wrote these kind of letters just to keep Senator Grassley's name under circulation.

After the business case fiasco was exposed by Srinivasan, Hon. Charles O. Rossotti began to regard Srinivasan as his enemy. The Honorable Commissioner, decided that it is time to get rid of Srinivasan who in his esteemed opinion, had become an enemy by repeatedly exposing frauds and saving the Government several million dollars. These exposes also prevented the Honorable Commissioner's cronies in the contractors' community from looting the Government. Srinivasan's actions also made the Honorable Charles O. Rossotti looked incompetent. In the Federal Government, honesty and saving taxpayers' money is not acceptable. Now, the question is, what to do? Get rid of Srinivasan, a brown skinned fool who does not know how to keep quiet--a fool who does not know he is a minority! Government is there to plunder and loot! Apparently, he issued orders to get rid of Srinivasan by whatever means. It should be fairly be simple-- he the wealthy Commissioner with lot of powers endowed upon him, Srinivasan, a mere GS-15 !!



The order went forth to employ whatever means to get rid of Srinivasan by any means. Apparently several employees refused to do that, because Srinivasan had been honest and truthful, and to oust him "by whatever means" may amount to illegal and even criminal acts. Finally, they managed to locate Mr. Behrooz Sabet, who was willing to do whatever was needed to oust Srinivasan. Finally, Cecil Hua managed to find someone to do the hatchet job. In return, Mr. Behrooz Sabet demanded, it seems, what is it in for him. Looks like they settled on an immediate promotion to GS-15 for Mr. Sabet to take on the job, and one more promotion to Senior Executive Service if Mr. Sabet succeeded in ousting Srinivasan, with no holds barred.

The harassment began. Banging on Srinivasan's office doors and walls, calling him all sorts of obscenities, following him to the men's room, spitting on the floor, following him to the cafeteria, the list goes on. For further details, please see the attached court filing. Mr. Behrooz Sabet will come and sit in Srinivasan's office talking obscenities, calling this country, United States of America, a bad place, culturally depraved, and how much he hated America. It was indeed an astonishing scene by any and all means!!

All during this period, the Hon. Charles O. Rossotti had been the presiding commissioner demanding action!!!

Mr. Sabet could not wait any longer-- he desperately wanted the promotion that had already been promised, so said he to Srinivasan. Sayeth Mr. Sabet to Srinivasan, "I have been brought here to oust you!!" One fine day, Mr. Sabet hit Srinivasan with a three ring binder from almost ten feet away. Srinivasan had to run out of the building. While running, he fell down and broke his knee, for which he needed to have a total knee replacement and several other surgeries.

Srinivasan concluded that he could no longer serve a corrupt organization that demanded its employees accept bribes, commit fraud, and other prohibited acts. Srinivasan mailed his resignation letter directly to the Commissioner Hon. Rossotti, enclosing his IRS badge, on September 10, 2001, a day before the infamous 9/11. After the 9/11 disaster, the Government offices were closed for several days. No one could have seen Srinivasan's Resignation Letter at least for a week when the Government reopened. Out of vengeance, the illustrious commissioner made the resignation letter effective September 10, 2001, the day it was mailed !! Mission accomplished !! Now Srinivasan cannot get any medical benefits !!

Vengeful and malicious people do not rest ! Their enemies have to be completely destroyed !!


Homicide appeared to be difficult to carry out now that Srinivasan is outside the Federal Government-- local police jurisdictions may get involved !! What else to do now after Srinivasan had been forced to resign by various means, including physical assault? Think Quick !! Start a rumor that Srinivasan entered the IRS Federal Government building illegally, even after Srinivasan had resigned and surrendered his badge. Never did it occur to the Honorable Commissioner and his minions, thugs, knaves and imbeciles, that it is impossible to enter a Federal Government building surrounded by armed guards and closed circuit cameras after one had resigned and surrendered his badge !! Hey, that should not prevent starting a rumor that Srinivasan entered the building illegally, and to add a little more venom, by saying that Srinivasan not only entered the building, but also logged on to his old computer, and sent a threatening email that Srinivasan wanted to kill a few people !! It seems that it never occurred to these brilliant people Srinivasan's email accounts would have been deleted as soon as his resignation became effective! If it had not been deleted, why not?


When vengeance clouds your mind, reasonable and honest thinking vacate !!


Here is the correspondence with the Commissioner. Never got a response !! How can the idiot respond, having committed an illegal and malicious act !!


By the time the Honorable Commissioner Charles O. Rossotti left the IRS, almost all modernization projects that were initiated during his reign as the Commissioner, had collapsed.



The total Attachments: