By Stephen Barr
Washington Post Staff Writer
Monday, August 3, 1998; Page A10

The Year 2000 computing crisis comes a year early at the Internal Revenue Service.

IRS planners have adopted a strategy called "renovation and replacement," which they acknowledge will make the 1999 tax-filing season among the riskiest in the agency's history.

Under the plan IRS employees will enter taxpayer names, income data and other vital information from the 1998 returns into new computers, which will replace obsolete equipment incapable of handling date-conversion tasks on Jan. 1, 2000.

In addition, 50 million lines of software code in 127 application systems – essential to processing returns and issuing refunds – must be overhauled. The updated code will run programs for the 1999 filing season. Afterward the IRS will run the clock forward and test the code's Y2K fixes.

Altogether, the agency plans to repair or replace 1,400 mid-size computer systems and 130,000 personal computers. Sixty-seven big mainframe computers operating at 10 processing centers are being consolidated into 12 mainframes at two centers.

The changes, occupying about 1,000 IRS employees, add up to what IRS Commissioner Charles O. Rossotti calls a "brute force" approach to the Year 2000 computer bug.

"I'm sure that we can do it," Rossotti said, but he added: "There will be errors in the 1999 season. There's bound to be with this much change. There's no way we're going to catch everything. What we're trying to do is manage the risk."

Testing of the new galaxy of hardware and software will begin in May, although it's not clear whether the complex checks will be completed before the new millennium. The agency's technical wizards are working on a testing scheme that simulates 60,000 IRS computer users online as the first week of the new century rolls around.

"The best we can do is test the key paths through the system, the main things that need to be done – issuing refunds, getting information to the customer service representatives, sending out notices," Rossotti said. "We're probably not going to get everything tested. In fact, I know we're not going to get everything tested."

Before joining the IRS, Rossotti worked for 28 years in the private sector leading a successful technology company. "This," he added, "is something that is unique in my experience."