Bill Gates' Taxes Require Special Computer

NightWulf writes "News AU claims Bill Gates said in an interview, his fortune is so big, that the IRS needs a special computer, because a normal one can't handle the numbers. The IRS must have had to switch from PC's to Macs just for Gates."

At last, I have something in common with Bill...

Except the special computer that the IRS use for my taxes is an Altair.

Re:At last, I have something in common with Bill..

They do mine on a napkin with a red pen.

Re:At last, I have something in common with Bill..

You must be raking in the dough.
They send mine to this fellow [wikipedia.org].

Re:Bistromathics

Well that would certainly explain the mysterious nonabsoluteness of the relationship between what the Tax Man says I owe, and that which I am prepared to pay!

Your Shell Script

And here it is:

read INCOME ; echo "Your total tax bill is: $INCOME"

Re:Your Shell Script

Hi, fellow Canadian?

Re:At last, I have something in common with Bill..

I need Microsoft Money 64-bit edition to handle my personal finance...

Re:At last, I have something in common with Bill..

Mr. Simpson, this computer can process NINE tax returns per DAY. Did you really think you could fool it?

Its not the numbers

Its not that the numbers are too big, its that the EULA he staples to his tax forms require it be processed by 100% MS software.

I don't buy it

This has to be BS. There are very lareg corporations with financials much more complex than Gates' taxes.
This sounds ridiculous. Do Warren Buffet's taxes need the special computer also?

Re:I don't buy it

Yes but large corporations don't have the sort of long-running mismanagement of IT that the IRS has. The story here isn't that Gates' fortune is so large but rather -- assuming the story isn't a hoax -- that the IRS is so mismanaged that it cannot deal with exceptional cases like Gates.

The IRS is apparently still using a computer system that became operational in 1967 (see this announcement [house.gov] for example).

Re:I don't buy it

I'm inclined to believe it. About four years ago, I did a little consulting work with a guy whose full time job was working for the US Treasury Department on a project named "System 89", so named because it was originally scheduled for completion in 1989.

Re:I don't buy it

"There are very lareg corporations with financials much more complex than Gates' taxes."

Yes, but corporate taxes are probably held by a different division than personal taxes.

I worked for a year at the IRS in the early 90s and things are BAD. I wouldn't be surprised if he had to have his personal stuff moved over to the corporate computers.

Think about it this way, if you are running on older databases on older computers -- you have specific field sizes. Its hard to retroactively recode these without possible killing a large number of other items (I worked on modernizing some code at my department -- it was a pain in the ass). And beyond that, just because 0.00001% of the population needs a field size of a few hundred digits to calculate a value -- this will mean EVERYONE gets the same value size and require the same sorts of calculations slowing down the whole process and requiring a lot more memory (on computers that are no longer manufactured or were custom pieces -- because when I worked there, it was the battle of the lowest bidder and they ALWAYS made sure that just because they were lowest, it didn't mean they didn't make up for this fact a few years down the road with purposely propriatary parts they never told anyone about even though it was against the original spec sheet).

So I wouldn't be surprised to know a few dozen billionaires had their own computer system and were managed by a single individual (where as a single individual might manage a few million from a data perspective otherwise). And when you think about it, as much taxable income that man is bringing into the gov't -- it makes PERFECT sense that they'd put a $30k employee on to manage one guy that is chipping in a hundred million a year in taxes...

I could say more, but I won't because I still have security clearance with the IRS...at the same time, I'm going to post this anonymously even though I didn't give out any information that was secret (or even all that interesting).

Re:I don't buy it

This story is 100% plausible.

Bill didn't say that his tax records were the *only* one on that special computer. It is very likely that Mr. Buffet's records are on that computer too, as well as the records for any high net worth individual with complicated tax situations. I completely buy the story. I work in estate and gift tax planning and at least from that perspective, there are myriad of complicated structures (ie LLCs, FLPs, trusts, promissory notes) that require incredibly intense accounting. And I'm not even exposed to the more esoteric tax issues.

I did some work for a billionaire with only a *fraction* of Bill Gates' fortune once and I had to invent a whole new set of models for keeping track of the spider web of entities. The guy's accountants had it even worse, because they had to keep track of transactions in hundreds of entities by and among various family members...I just had to track the data for one individual. It was my understanding that if this particular family ever underwent a Section 754 Election, where the cost basis of the underlying assets is adjusted to market value (or something like that), the cost in legal, accounting and IT resources could run into the millions.

Re:I don't buy it

I highly doubt it. Billy may be the richest man in the world, but the IRS - frequently - deals with large numbers ranging in the billions and trillions. Considering the IRS does consolidation reports to report to their bosses - so their bosses can say "This year, Americans earned XYZ dollars". Billy G is a drop in the hat...yea larger then what we put in the hat...by an insane amount....but still a drop in the bucket.

Re:I don't buy it

>Billy G is a drop in the hat...yea larger then what we put in the hat...by an insane amount....but still a drop in the bucket.

sooo...... you wear a bucket as a hat?

I don't buy it either.

This article is pure BS because I seem to remember something like 15 digits of precition on either side of the decimal point (999999999999999.999999999999999). These machine and their algorithms are PRECISE. There isn't any rounding float error because they don't really round. So its not the software or the hardware.

They do segregate some accounts because of the sheer volume of transactions but the database systems and transaction handling systems are on separate 'farms'
  of machines so this article seems to be utter fabrication.

W.ealth O.verload P.lanned R.esponse

There is only ONE computer [sun.com] that could possibly handle these calculations.

I have an idea, if your fortune gets to be so large that even the IRS can't figure it all out, you should be required to give some of it away to the poor until they can do the necessary calculations.
That being said, I will accept cash and postal money orders only please.

You can't be serious.

I have an idea, if your fortune gets to be so large that even the IRS can't figure it all out, you should be required to give some of it away to the poor until they can do the necessary calculations.

Part of the problem is likely that Gates gives so much to the poor already. [gatesfoundation.org] He's the richest man in the world, but name someone that gives more money to the poor than he.

WHO

Don't forget the enormous amount of money he donates to the WHO, not to mention paying for immunizations for hundreds of thousands of American kids. The Gates have become world-class philanthropists, and yet they get almost no credit for it. Humility in charity is an impressive thing.

Re:WHO

I have plenty of problems with Bill Gates, but I applaud his charitable giving. However, I can't accept your accusation of humility: it is called the Bill and Melinda Gates Foundation after all, not AFAIK (Aid For Africa In Kind) or something more anonymous. And, anyone who has listen to NPR knows that BMGF is a regular sponsor. There's no humility here: this is about Bill's image. On the other hand, that's fine with me, I don't doubt that he's doing some good at the same time.

Re:W.ealth O.verload P.lanned R.esponse

You can sneer at his wealth all you want but he has already founded the Bill and Melinda Gates foundation [wikipedia.org], the world's largest charitable foundation. That's a good thing.

Re:W.ealth O.verload P.lanned R.esponse

> There is only ONE computer [sun.com] that could possibly handle these calculations.

WOPR? A mere abacus. Mention it not.

Pure fluff

I'd love to see some more detail on exactly WHY they would need a different computer. It's not exactly like 47 billion is a hard number to handle. If it's even true (questionable) I'd say it's probably because their SOFTWARE has some sort of limitation, using low precision numbers or the like, so they had to set up one machine where the software was modified to have higher precision

Oblig. Simpsons Reference

Moe: "Say, Barn. Uh, remember when I said I'd have to send away to NASA to calculate your bar tab?"

Barney: "Oh ho, oh yeah. We all had a good laugh, Moe."

Moe: "The results came back today."

I've got negative money!

I haven't RTFA, but when I read the blurb, it made me think of all the old games and software that would let your money/score/whatever roll over to zero if it got too high. Nothing like having one billion, wait, negative 500 million doll.. Ah CRAP!

And now that I've RTFA while I waited for ./ to log me in.. I wonder why they needed a special computer.. if it really was because thier system can't handle numbers that large, of if there's some sort of other reason.. I wonder if Warren Buffet has the same problem/bragging rights as well..

Funny story, but...

Perhaps this is more of a statement about our tax code than about Gates's fortune.

IRS Computers.

The IRS must have had to switch from PC's to Macs just for Gates."

The IRS's computers have been in the dark ages from time immemorial. It's more likely that they had to switch from an ENIAC [wikipedia.org] to a UNIVAC [wikipedia.org].

Re:IRS Computers.

Actually, I run a toy company and we just got an extremely large government order for Etch-a-Sketches.

Right

They need a Linux computer

Begging

his fortune is so big, that the IRS needs a special computer, because a normal one can't handle the numbers

"Oh, please, please, Mr. IRS Man, please give me the latex glove audit."

One of the MS Money Editions might suffice

MS Money.
MS Money Small Business Edition.
MS Money Enterprise.
MS Money Multi-national Edition.
MS Money Dr. Evil Edition.
MS Money Dr. Evil Edition with Laser Beams.

A joke?

Anyone else consider that Bill was attempting a joke, but the interviewer couldn't tell? I mean only nerds get nerd humor, right?

Re:A joke?

There's an old one out there about Nelson Rockefeller, whose dyslexia was so bad that papers had to be numbered "Page One, Two, Three" etc. When asked how he filed his tax returns, he laughed and said "son, I have five floors of accountants just for that."

They still can't calculate my taxes.

and never will, unless they can effectively divide by 0.

In other news, Steve Balmer threw a chair at the IRS computer so he could also claim they needed a new "special" one for him too.

Reminds me of..

Ah well this reminds me of the story that claimed that a Cray computer has been used to design the new Apple Mac (I don't remember which one).

When Seymour Cray was told this he supposedly replied with "That's funny, because I'm using an Apple computer to design(the Cray supercomputers)".

But I thought...

...640K was enough for anybody?

I wonder

Does this special computer run on Windows?

Separate System

My guess is that the IRS segregates the really big fish into a separate system for closer scrutiny. If they are off a tiny bit on a "regular" tax return they might end up plus or minus $50. If they make a tiny mistake on Billy-o's taxes it could be millions of dollars. Plus they probably have an actual team of people going over it, so they may need to let more than one person access a record at a given time, which is likely not the case with their standard system.

He's not Chuck Norris, because...

...when Chuck Norris sends in his taxes, he sends blank forms and includes only a picture of himself, crouched and ready to attack. Chuck Norris has not had to pay taxes, ever.

Say what you will

Gates's fortune is put at $US47 billion ($62.88 billion), according to the latest list of the world's rich published by Forbes magazine.

The couple's Bill and Melinda Gates Foundation has a $US29 billion ($38.8 billion) endowment making it the world's biggest charity.

So BG is putting more than half of his money into the Foundation (assuming he's the sole contributor). We may all not like him, but at least he's trying to do some good with the money he's fleeced from us. I just wish I still had the money so I could donate it and get the tax writeoff!

Bill Gates' tax computer

Yah, they hadda build one with dials that go to 11.

That taxes requires a computer at all is a shame

My finances are not very complex, but apparently enough that I'm relegated to the long-form return. I've got to search various forms for fields labelled with numbers to copy out numbers and add them together, copy those to other numbered fields into another form, add them together, altogether having to read an instruction for each field that often reads: "refer to IRS document X to see if this applies to you", or "complete worksheet X and if you get a number between -100 and 325, ignore this line". PLEASE, GOD, WHY?!?!

In my wife's home country, all taxes are collected at whatever transaction takes place. At the end of the year, you get a receipt to review. If everything seems in order, you are all set.

Personally, I'd like to see the entire body of personal tax law reduced to 2 pages. If you can't fit it in 2 standard-size pages in 10-pt type, you can't tax it. Further, taxes should be collected at transaction time (payment, sell investment), and the rate ought to be flat and without deductions. Do that, and Gates taxes would look like this:

Salaries: 1,000,000
* 0.15 = 150,000 tax
Realized gains on investments: 2,000,000
* 0.15 = 300,000 tax
Interest earned: 900,000,000
* 0.15 = 135,000,000

Total tax: 135,450,000
-- paid in full, thank you for your support of the USA.

Re:That taxes requires a computer at all is a sham

Further, taxes should be collected at transaction time (payment, sell investment), and the rate ought to be flat and without deductions.

I used to agree with you, but I've since found the that picture isn't so simple.

Taking taxes at transaction time means pushing a situational-tax only system. In other words, pay tax on a sale of goods or services or the such, which pushes a larger percentage of the tax burden farther down the economic ladder (remember that everyone has to eat and buy things). The richer you are, the lower the percentage of situational tax with respect to your income/net worth. That's not good. Thus, income and estate taxes are pushed as a way to readjust the percentages to make the wealthy pay a larger percentage of their net worth than the poor per annum. Additionally, speaking as someone who was there, taking even 15% of my income when I only make $10k or $20k is pretty onerous, if not simply not possible. But taking even 30% of my income now that I make six figures would pinch, but is far more doable. Speaking as the hypothetical Bill Gates, taking as much as 45% of my $50B, leaves me with enough cash on hand to own a small nation and still manages to do an amazing amount of collective good for the nation.

Also, deductions are an absolutely necessity of the system. Let me explain by example:

If I own a business and that business brings in $100k in gross profit, without deductions, I pay tax on $100k. However, looking at the bigger picture, If my business is anything like the norm, only about 30% of that gross stays in my pocket. That means, I had to pay employees (who are taxed on that pay), advertising (which is taxed on the service provider), and office supplies (which were already taxed at the OfficeMax counter). I have to be able to deduct business expenses otherwise the remainder of the gross that I hold in my hand after business expenses will go, in total, the IRS and I end up having run a business that did $100k in profit and I, as the owner, have exact $0 to show for it (if I don't end up oweing.

Deductions of the other sort exist to encourage charity. There are those who would give to charity out of kindness, but to the same extent? As frequently? What about the rest. We can't forget that charity write-offs really work. Americans give a tremendous amount to charity every year. How much who those charities get if there were zero benefit to the giving? Not nearly as much. Sure, those who give anonymously would still give, but as for the rest, the numbers would drop drastically.

Al Gore---not my favorite guy in the world---had a great idea. Tax breaks for people who make beneficial environmental choices (buy hybrids, use solar, etc...) to encourage people to lessen our dependence on foreign fuels. His ideas never came to full fruition (a real shame, regardless of whether I like him or not), but they would only work if the tax base can claim deductions as incentive.

Brevity is not my strong suit, so sorry for the long ramble, but you get the idea. :)

Merrill Lynch, 1987, payroll system had same thing

We had to modify our payroll system in 1987 to be able to cut a check with 8 digits to the left of the decimal for one broker.

Re:I want my money back

...if this story were about Steve Jobs, all the replies would be bitching about how much press he gets.

I thought he only got a $1 salary? Can't be that hard to do the taxes on that. I'd say roughly half as hard as mine...

Re:What a liar...

$64.0 billion ought to be enough for anybody.

Re:Is this the Intel Math bug???

So Billy boy has $47B and earns 1.5% average return on his money (any excess is given away).
Bill's salary is given away.
Bill's home mortgage (if it exists) does not exist.
He earns roughly: $705,000,000 per year.
That quite certainly puts him in a high tax bracket:

If taxable income is over-- But not over-- The tax is:
$326,450 no limit $88,320.00 plus 35% of the amount over 326,450
(So he pays $705M - $326,450)*35% + $88,320
246635742.5+$88,320 =

$246,724,062.50 in taxes
Since we don't use the cents collumn in fed tax does anyone know whether the .5 rounds up or down in this case :-)

I make about $42K a year.
So dear billy pays in taxes what I make in over 5 _THOUSAND_ years.
Yeah, I'd say your guess was conservative alright. We haven't even figured in state taxes and I think he earns more than 1.5% in interest and divadends per year.
-nB

Half accountant, half philosopher...

Bill's home mortgage (if it exists) does not exist.

Whoa, man, you're blowing my mind!

Re:I'm sure he means ...

Just for kicks and grins,... Has anyone noted that those ordinary computers he is talking about run on a common OS?

Because of the fact that some people on this forum moderate anything intelligent as troll, I will leave it to the readers to guess which OS those computers run on. This has to be the funniest thing all day.