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IRS Computer Basics

December 18, 2013

We get tons of Form 2290 questions about how the IRS works and how e-file works. The short answer is that,  ”it’s complicated.” The long answer is that the IRS has such a big job to do that they need more than one type of computer to get everything done. Below is a simple explanation of just the basics. We’ll only talk about two of the IRS computer systems, and call them Computer A and Computer  B.

 

Computer A

Computer A does the bulk of the work at the IRS. They issue EIN’s, SSN’s, and IRS Notices. They calculate penalties, generate audits, and process refunds. They are what the IRS Phone Operators have access to when you call and ask them questions. Eventually Computer A holds ALL the data for ALL tax returns, no matter how they are filed.

That’s a lot of data, and that’s only the beginning.

 

Computer B

Computer B holds the e-file system for all e-filed tax returns. if it’s e-filed then it’s all processed in the same e-file system whether it’s a Form 2290 or a 1040EZ Income Tax. Computer B checks for errors, issues e-file confirmations (like the Stamped Schedule 1) and holds master copies of the records that have been e-filed.

That’s a lot of data, too!! More people are e-filing all the time.

 

Do the Computers Talk?

These computers are connected but they don’t talk very fast.  There is so much information between the two computer systems that the IRS needs two weeks for one system to update the other. TWO WEEKS!

That’s why if you get a new EIN, you can paper file, but you can’t e-file 2290 forms right away. The EIN is issued by Computer A but Computer B won’t know that a new EIN exists until they are updated.  Two different systems.

It’s the same when you call the IRS the day after you e-file 2290 forms, the IRS Phone Operator doesn’t have your records yet. The Operators use Computer A  and your records are over in Computer B. They need two weeks for the update.

At least, I think it’s two weeks. Sometimes updates seem to take longer, and sometimes they happen faster – it’s hard to say for sure.

 

IRS Shut Downs

All this together helps explain why the IRS has to shut the computers down several times a year. I reboot my computer at least once a week because it gets slow, or starts acting funny and my computer has an easy job to do. The IRS computers have to work much harder, serve many more people, and they need to be rebooted every once and a while also.

The IRS shuts down for these updates almost every weekend during in the middle of the night, and for the most part, these shutdowns slip by unnoticed. We only notice the BIG shut downs, the ones that take place on weekdays. Some are predictable and some aren’t.

 

Annual Shut Down Schedule

Every year the IRS does BIG shut downs at the same times.

  1. Labor Day Shutdown – Usually starting the first week of September, lasting anywhere from 3 days to 3 weeks.
  2. Christmas Shutdown – Usually starting the day after Christmas and ending some time in early January.

We know these are coming, and we do our best to prepare for them. The IRS even tries to let us know EXACTLY what day and hour they will shutdown and start up.  The trouble is that the IRS can’t always stick to the exact dates and times they choose.

The IRS is often doing a lot more than just turning their computers off and on again, and it doesn’t always go according to plan. They are preparing for new tax years, implementing updates to their programming, and fixing problems. All this has to be done, then tested, and only after they KNOW it’s working do they turn the computers back on for us. Sometimes it all happens faster than they expect and they open earlier. Other times it all takes longer than they expect and they open later. They do their best to be on time, but sometimes it’s just not that easy.

 

Did That Help?

Hopefully this helps explain a little bit of what is going on behind the scenes and allows you to plan wisely!!  When the IRS is down, nobody can access it, so it’s good to plan ahead and make sure you have all your documents long before these shutdowns happen.