Loose Lips

Tax Office Error Plunges Couple Into Terminator-Like Nightmare

shutterstock_114722566Software used in the District's tax office worked so poorly that it reminded a Court of Appeals judge of the genocidal computer network Skynet, according to a new court of appeals opinion out today.

"In the 1984 film 'The Terminator'—a work of fiction starring Arnold Schwarzenegger—artificially intelligent machines attempted to exterminate what was then left of the human race," D.C. Court of Appeals Judge Frank Schwelb writes. "In the appeal now before us, a man-made computer system did not go so far but, defying the will of those who programmed it, it caused significant grief and distress to those who had a right to rely on its accuracy."

Schwelb's opinion concerns the somehow-still-ongoing saga of Sara and John Shuman. LL couldn't track down the Shumans for comment, but that's OK. After being embroiled for nearly a decade in the Skynet-with-a-screw-loose that was the Office of Tax and Revenue computer system, they deserve a break.

The Shumans' trouble began when they filed a joint tax form with OTR for 2005 saying the city owed them a $790 refund. Instead, the refund went into OTR's tax system as a debt to the District. The Shumans discovered the mistake in Sept. 2007, when OTR billed them for the "missing" money. A week later, OTR admitted the error.

But the Shumans' OTR saga was only beginning. OTR's computer withheld $790 from their 2007 tax refund, claiming that it was payment on the nonexistent debt. Again OTR admitted the mistake, and again the agency's computer held back the money.

The Shumans took their case to the Office of Administrative Hearings, only to get yet another notice from OTR that they owed $790. Even when a judge ordered OTR to pay the Shumans $790, the system issued yet another letter about the alleged $790 debt. Now completely out of the control of its creators, OTR's computer also issued the couple a $1,799.76 refund while simultaneously claiming that the couple's debt had metastasized to $19,151.

This back-and-forth continued for years, with the computer generating random debts for the couple while OTR employees tried to convince it to stop. Even writing off the $790 wouldn't dissuade the computer from pursuing the Shumans. "The computer system, though inanimate, would not be so easily diverted," Schwelb writes.

In the end, a judge had to impose harsh sanctions on OTR (the issue that's still being litigated in today's opinion), while the Shumans received notices about their phantom 2004 debt to the District through at least 2011.

Office of the Chief Financial Officer spokesman David Umansky tells LL that the computer problem has been fixed. Still, consider the forbidding testimony of John Shuman: "It is a sad day when computers rule man."

This blog post has been updated with a comment from CFO spokesman David Umansky.

Terminator photo by Shutterstock

  • OTR Sux

    Terrible, but not surprising. My family had its own saga with OTR. One of their lawyers reinterpreted a law which meant we suddenly owed a lot of backtaxes - and penalties and interest. To make matters worse, OTR kept changing the amount we owed. First it was $6000, then $8000, then $13,000, then $23,000, then $33,000. One person in the office would say one thing and then another person would contradict them. We finally just paid the damn bill.

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