US taxman was warned before tax system failed

The US taxman had been warned about potentially catastrophic problems with
its new computer system two months before it began paying out an estimated $200m
(£101m) in fraudulent or erroneous tax refunds, according to reports.

An unpublicised warning in November 2005, along with others, was discovered
by USA

Last spring, an upgrade of the system to protect
the IRS from fraudulent
claims was discovered to have failed, however, the old system could not be
switched on again.

As the 2007 tax season looms in the US, the old system is being restarted to
process tax returns.

Further reading:

Tax advisers angry at HMRC call for after
hours filing

Self assessment slow-up provokes wrath of

Reformed tax credit system to cost HMRC

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