Wednesday, March 05, 2014

Complexity of IRS reporting and processing, and antiquated systems, likely to lead to more old mainframe IT jobs

Entering my taxes into HRBlock this year, I can see a need for more systems development.
  
For the first time (partly because of a grantor trust), I have a lot of activity in securities sales, as reported on brokerage account 1099’s in the “1099-B” section. The statements don’t show the total long-term and short term capital gains and losses that eventually go onto Schedule D on the front page; you have to dig them out of the statement.  It’s not clear if you have to enter every security, or just the totals in each category.  Furthermore, with older securities the brokerage account may not even know the basis.  Fortunately, Yahoo! Finance has a database online to look up historical stock prices by date in the past.  But this means a lot more work. 
  
The 1099-DIV form states a capital gain distribution, which is also reported on a different line on Schedule D.  That’s a different concept from capital gains from a sale of security.  That is a distribution internal to a mutual fund that is itself a security in a brokerage account. The IRS ought to show both concepts clearly in the main 1040 page itself. 
    
The danger is that a naïve taxpayer (perhaps some with new accounts after receiving proceeds from an estate after a death in the family) may not realize everything he or she is expected to report, and get penalized later. 

  
The IRS should insist that Brokerage account 1099’s be clearer, with all the required information summarized on the front page, along with a clear explanation of where it is supposed to wind up on the 1040.  This would require a lot more systems development in companies that sell tax preparation software. That would require more business analyst and mainframe-emphasis jobs.

System changes could require that 1099's point out where any rogue information about securities sold without known basis numbers are reported.  Coding the page on which this appears with traditional Cobol logic can be tricky; I seem to recall running into something like this with commission statements when working in the life insurance industry in the 1990s.  
    
Back in the 1980s. when I did some job hunting in Dallas (before I wound up at Chilton) I found that a lot of the tax preparation software development seemed to be going on there.  I suspect that’s where the actions still is. 
   
I do see emails about jobs with contractors working for the IRS, often in northern Virginia.  It seems like they still look for mainframe assembler programmers.  It seems, judging from various recruiter emails,  as though the IRS has a lot of old systems and is having increasing difficulty finding people able to maintain them. 

Second picture is Dallas DART just south of I-635 and the Galleria area;  third is taken south of downtown Austin.  Is this where the jobs are? 

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