After five years, a project to replace the IRS’s aging file-keeping computer system with modern technology is so far behind schedule that the IRS. has told the prime contractor that unless it improves its performance by the end of the month, the government may have no choice but to fire it.

This fits in perfectly with the DaVinci Institute’s prediction that the income tax system will collapse within ten years.

The project, which was expected to cost $8 billion when completed, has spent less than $1 billion so far, but it is already 40 percent over budget for what it has done, according to the I.R.S. Oversight Board, an independent watchdog body that Congress created in 1998.

Most taxpayers are younger than the computer system that the I.R.S. relies on to maintain its master files on individuals and businesses – all the records of who they are, where they are, their income, taxes paid, and the amounts they still owe or are owed as refunds.

The I.R.S. says it can still process returns and send out refunds on time, but its dependence on the 1960’s-era Assembler and Cobol computer languages makes it difficult to investigate and resolve taxpayers’ problems. Finding a record using the existing system can take a week; the new system is supposed to do the job in seconds.

“This is not about a one-time delay,” said Larry Levitan, chairman of the Oversight Board. “Every single major project under way experienced a significant delay in time and overrun in budget – not two or three out of five, but five out of five. What we have here is a five-year track record of absolute consistency of cost overruns and delayed deliveries.”

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