Has an unknown number of non y2k-compliant machines.

The New York Times advises the IRS has an unknown number of non y2k-compliant machines.  The IRS's computer systems have long been known to be somewhat inefficient, and multiple databases are used for taxpayer records.  The article indicates that if needed, the 10 IRS Service Centers could produce up to 10,000 manual refunds daily (in the aggregate), and that taxpayers most in need would get their refunds first.  Taxpayers with special approvals called taxpayer assistance orders, would be processed first, then taxpayers with gross income of $10,000 or less, increasing in $5,000 increments of income.

My comment to the above is - beware!  I am not an overly concerned Y2K person.  I have newer computer equipment and good, current software, so I have, in my opinion, taken reasonable precautions my business and favorite hobby will function next year.  But, can you imagine how long it could take to get a tax refund if your income is, say $100,000, and probably 98% of everyone else comes first, and only 10,000 refunds are processed a day?  What a potential problem!  How many people will the budget-strapped IRS put in charge of determining who will get their refund, and manning the telephones to talk to angry citizens?  So, I really recommend that you spend a little extra time this year to project your taxable income, and don't end up with a big overpayment.

CPA's have long done "year end planning" to try to make their clients penalty-proof, and to have them pay in as much tax as is advantageous or required. Often, the result of those efforts is, frankly, nothing more than a timing difference that provides more deductions in the current year.  I am concerned the IRS may well have a problem in the year 2000, and I will run enough numbers before year-end to ensure I am not significantly overpaid on my 1999 taxes!

I'll do a brief article on year end planning for taxes next month, so come back to our site in early December to get some suggestions for what you might do before year end to help your tax situation!


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