Monday, January 22, 2018

Carillion: How to tame the tech titans

Aussie glamour couple under investigation


Inside the secret world where oligarchs and criminals hide their money


From the article (hat tip Richard Smith):

In addition to the £2.6bn Section 75 pension deficit, Carillion’s liabilities when it went bust included £1.3bn owed to its banking syndicate; £350m arising from early payment facilities with suppliers; cross-guarantees of £630m relating to bonding facilities; £170m of convertible bonds guaranteed by the company; and an unknown debt to Her Majesty’s Revenue and Customs, £16m of which was due by the end of the month.
This is a big deal. The amount of pension shortfall, reported a few days ago and presumably based on published financials, was just under £600 million. So this means accounting fraud, big time. Plus the clowns were paying dividends and hefty exec bounuses until July 2017.
User succumbs to a seizure in virtual reality while other players can only watch The Verge

Machines are cheap. Humans are expensive. The IRS depends upon both to administer the fiendishly complex tax code that Congress tirelessly re-scrambles every year. This year is, of course, much, much worse. And everyone seems at least aware that a government shutdown will hurt the IRS’s ability to implement the new law. Here’s a recent WaPo article on the subject.
But the effect of a government shutdown on IRS operations is worse than is being reported.  More below the fold.
As I explained in last Monday’s Lesson From The Tax Court, the chronic shortage of funds has most obviously affected the human side. The loss of human personnel has been devastating. The IRS Oversight Board put it well in its FY2015 Report: “This means a current IRS employee will see five coworkers leave, some of them the most experienced and well trained, before one new employee is eventually hired to cope with a growing workload.”
Ironically, since the Oversight Board wrote that report, it is no longer functional because of the current administration’s ineptitude at filling appointments. Here’s what you find when you go to the Board’s home page:
The IRS Oversight Board does not currently have enough members confirmed by the U.S. Senate to make up a quorum and as a result has suspended operations. The Board will reconvene once it has a quorum.
One might think that if the IRS does not have the employees, it cannot do the work of processing returns, assessing taxes and collecting unpaid taxes. One would be wrong. The work will indeed continue, only with more unchecked errors. Loss of personnel does not mean stoppage of work; it means increased errors by the IRS because of unchecked automated processing of taxpayer accounts.
As I have elsewhere described in long, boring academic detail, the IRS has resolutely automated various tax administration functions for most of the 20th century to the point now that it is reasonable to say tax administration is run by machines, not humans.
Shifting work to computers is scary for many people, and rightly so. In fact, when the IRS first started using computers to process returns in the early 1960s, it created a public relations film to calm fears. The PSA is called “Right on the Button.”
I have also previously explained that what truly abuses taxpayers is unsupervised machine processing, because that’s often where errors creep in and it takes human employees to manually sort through the discrepancies. The short of it is that most adverse actions taken against taxpayers result from automated processing of taxpayer accounts: computers shoot first, and it is up to the taxpayer to ask questions later. When the computers get it wrong, adversely affected taxpayers must find a real, actual, live human to fix the problem. But who ya gonna call when there is no one there? When the already staggeringly understaffed IRS offices are completely emptied because of a government shutdown, there is no-one to stop the machines. And yet the computers keep on keeping on.
We saw this back in 2013, when the government shut down from October 1 to October 16. There were very, very few IRS employees working. Yet the machines kept whirring away. The National Taxpayer Advocate reported that during the shutdown – even with only a few employees – computers took a total of 301,807 adverse actions against taxpayers, including grabbing bank accounts, wages, Social Security benefits, filing Notices of Tax Liens, setting up deficiency assessments and more.
All of those actions were computer-generated. No human gave input or oversight. Let’s assume the computers got it 99% right. That still means more than 3,000 of the actions were in error, errors that could have devastating effects on taxpayers. Yet there were no humans to fix the mistakes.
The 2013 shutdown was 15 days.  If this happens again, how long will this one be?
This is not a rational way to run the county. But I suppose it is futile to expect collective rationality from the men and women whose bickering voices fill the halls of the current Congress. They have enough problems dealing with the personification of Mayhem in the White House.  Hey Allstate!  Ya got a policy for that?