European Stars And Stripes (Newspaper) - March 12, 1986, Darmstadt, Hesse                                Cautious Confidence at by William  new York times l ast year at this time a bureaucratic horror Story was unfolding inside the Long Low building in Northeast Philadelphia where the internal Revenue service processes Federal income tax returns from 14 million taxpayers in the Middle Atlantic Region. By summer a Jumble of errors bottlenecks delayed refunds and lost information out raging hundreds of thousands of taxpayers had made the Philadelphia processing Center the worst example Ever known of a breakdown of the irs system. This year with an air of cautious Confidence the Center s new director predicts that nothing like what happened in 1985 is in store for 1986. Joseph Cloonan who took Over As head of the Philadelphia Center last August said it is far ahead of its 1985 Pace in processing returns. As of feb. 14 nearly one third of the 1,534,000 returns received at the Center had been processed. At the same time last year it had worked through less than 10 percent of the 1,845,000 returns that had come in by then. That is not to say that there won t be problems or that some taxpayers won t complain said Cloonan. But for the majority of taxpayers there will be a return to the kind of service they re accustomed to and our Early performance indicates  the official irs goal is to Send out All refunds within 45 Days after the april 15 filing deadline. Irs officials attribute last year s chaos to a new untested computer system which was still in its Shakedown period and prone to malfunctions aggravated by widespread human error and inexperience. The result was a tremendous logjam of unprocessed tax returns hundreds of thousands of returns were backed up delaying some people s refunds for Many months. The delays have Cost the government More than $15 million in interest paid to the taxpayers. On top of that data from thousands of tax returns were lost. Some taxpayers were required to file returns twice or even three times. Some received refunds they were not supposed to get while others were Dunne for taxes they did not owe. Letters from furious citizens piled up. The Telephone Exchange serving the irs office in downtown Philadelphia became so jammed that at one Point officials feared it might collapse from the overload. And amid All this it was reported and later substantiated that returns and checks for payment of taxes had been found in a trash barrel. In a separate incident irs officials also Learned a clerk habitually threw taxpayers forms and checks into a wastepaper Basket. The debacle prompted Congress the general  ice and the irs itself to investigate. Now officials Are waiting to see whether the Philadelphia Center can sustain its improved Pace All year. If it does Cloonan said the improvement should be credited to a number of moves. In one of them the Center s Sperry uni vac computer system which was new last year had its programs tested and refined. It has run predictably and Well since last Spring and it continues to run Well Cloonan said. The computer capacity has also been increased by 50 percent with the addition of two More Central processing units making a total of six. Last year he said the computer system was scheduled to operate 65 hours a week. This year it is scheduled for 85 hours. This year the system has been working properly for 95 percent of its scheduled time he said. An information retrieval unit that had been particularly troublesome is now operating Well he added. Other improvements cited by Cloonan include expanded training retraining and experience for employees dealing with the computer system. We now have 13 or 14 months under our Belt he said. We anticipate problems and jump on them faster. We be done a lot of rebuilding of the work  a 12 percent increase in the Center s staff to about 1,500 permanent employees and 2,000 seasonal ones for a total of 3,500 at the Peak of the tax season in april and May. The addition of More data base managers. A new emphasis on accuracy As Well As Quantity in rewarding the Center s workers with incentive pay. The introduction of error checkers. These people review the data that other employees Type into the computer directly from tax returns. In this Way it is hoped any error prone employees can be identified. Although Cloonan did not make a Point of it a new corps of senior managers has also been assigned to the Center. This year the Philadelphia Center is expected to receive and process 8.3 million returns from individuals and 5.7 million returns from businesses in Pennsylvania Delaware Maryland and the District of Columbia. The Center also handles All returns from americans living abroad. A study of the Center s 1985 deficiencies by the Gao found that a disproportionate share of last year s problems there were some problems at All 10 irs processing centers occurred there. The Philadelphia Center handles about 8 percent of All individual tax returns in the country but it was responsible for 23 percent of delayed refunds last year or 523,137 in All. It was also responsible for 30 percent of the nationwide total of almost $50 million in interest paid on delayed refunds by the end of 1985. No other Center came close to Philadelphia s $15.5 million of interest paid. The Center still has not issued refunds on 664 of the returns that were filed by last april 15 the end of last year s enormous backlog the Center s main Job is to process returns but that task often requires correspondence or Telephone discussions with taxpayers whenever problems with the returns arise. Processing begins soon after mail trucks unload envelopes full of returns. A sorting machine then slices huh my Mph  Odyssey of a tax return froce$sin8 it the rite Telp a it face of the  open the envelopes scans the bar codes on the outside and deposits them in trays according to Broad categories. The sorting machine also looks inside the envelope to see if a Check is enclosed. On the next floor in a space the size of six football Fields the returns go to employees seated at special tables. Each table contains 15 in boxes arranged in semicircular tiers. These Tingle tables so called after James Tingle the irs employee who designed them enable returns to be classified by Type of return or document and by whether or not a Check is enclosed. A mechanism on each table strips the envelopes of their contents. For purposes of control the returns Are next gathered into blocks of 100 documents. Clerks stamp a locator number on each document and each remittance Check. The thump thump of their Stamps is heard above other sounds in the room. Then the 100-document blocks Are grouped into batches of 2,000, placed on carts and taken to the next Section where employees examine each return to make sure that it is legible properly filled out signed and accompanied by wage statements. The next operation and the biggest involving tasks performed by employees is entering the data from the returns into the Center s computer system. For this purpose 336 computer terminals Are arranged in rows of 14 by 24. Many of last year s errors occurred at this stage according to Cloonan when people made typing mistakes. The computer checks the accuracy of All calculations. Employees review any returns with arithmetic errors Correct them and re enter them in the computer system. With that the Job of the return itself is done. It is kept in the Center s files for up to six months then turned Over to the Federal records centers. Returns Are held for usually seven years and then destroyed. Magnetic tapes containing the information gathered from returns Are sent to the National computer Center in Martinsburg w.va., for posting in a master file. From there the details necessary for mailing refunds to taxpayers Are sent to the government Check disbursing centers in various parts of the country. When the checks Are mailed out the annual tax Cycle is completed. Return is delivered by mail truck and conveyed to sort ing machine which opens envelope scans any bar code looks to see if Check is enclosed and de posits envelope and form by category into a tray. 7 details for mailing a refund to taxpayer Are sent to appropriate government Check disbursing Center and refund is mailed. 2 tray is carted to Tingle table in a Large room where contents of envelopes Are removed and documents sorted according to whether or not Check is enclosed. Documents without checks Are sent to clerks who stamp them with control numbers. Those with checks Are sent to unit where control num Bers Are imprinted on both return and Check and then Check is removed. Return is taken in Batch of .2,000 to employees who Check that it is readable Complete signed and accompanied by Appi opiate forms. If anything is amiss taxpayer is notified. If Check is enclosed it is sent for Bank Deposit and taxpayer s account is credited. 4 data of approved return is entered into computer which a ticks accuracy of All calculations. 6 magnetic tape of return is sent to National computer Center in Martinsburg w.va., for master file. 5 return is stored at Center for four to five weeks after processing and then at a Ware House for up to six months. It is next sent to Federal records centers where it May be held for up to seven years before it is destroyed. Wednesday March 12, 1986 the stars and stripes Page 13