IRS Counts Pennies, But Not Computers

WASHINGTON – The Internal Revenue Service may be watching every dime, but they aren't watching their equipment.

A recent Treasury Department audit said the tax collectors couldn’t find more than 2,300 computers that have gone missing over the past three years. Whether they are lost, stolen or not properly documented is undetermined.

IRS officials said Tuesday it's probably no big deal since the computers are more than three years old now anyway and probably obsolete. They added that the computers likely do not contain sensitive taxpayer data or provide the avenue for hackers to break into the IRS's main computers.

Toni Zimmerman, chief of information technology services, said most have probably been misplaced through bookkeeping errors

"Over the course of events, they were coded wrong in the system," Zimmerman said.

The explanations didn't sit well with one senior senator, who suggested Congress require concrete improvements in bookkeeping before approving more money for a long-term IRS computer systems upgrade.

"Just as a taxpayer would be held accountable for missing receipts, so must the IRS be held accountable for missing 2,300 computers," Sen. Charles Grassley of Iowa, ranking member on the Senate Finance Committee wrote to Office of Management and Budget Director Mitch Daniels.

Grassley asked Daniels to consider placing a hold on the IRS budget until the situation gets better. The IRS budget for fiscal 2002 is $9.5 billion, and Congress has approved over $391 million through 2004 for the computer modernization project.

In another letter to the Treasury's inspector general, Grassley also said he is concerned that public safety and law enforcement may be compromised by the theft of the IRS computers.

Zimmerman said the IRS is already improving its inventory controls as determined in a congressional General Accounting Office report, Zimmerman said. A new system is underway to identify whether computers are lost, stolen or damaged and improve the agency's ability to investigate incidents of missing property.

"We want to show that we are fiscally responsible and taxpayers should feel confident with our processes," she said.

The missing computers were uncovered by a Treasury inspector general during an audit late last year that also found six unaccounted-for IRS firearms and hundreds of lost investigative items such as badges and communications gear.

All told, auditors could not account for 2,332 laptops, microcomputers and microservers covering the period between October 1998 and Sept. 30, 2001. The IRS had 163,000 computers total as of September.

Of the six missing guns, one was lost in an ocean boating accident and five were stolen from vehicles. Fifty communications devices, 40 identification badges and 15 pieces of electronic surveillance gear were also reported missing, which auditors said "could compromise the public's safety or ongoing investigations."

The Associated Press contributed to this report.