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Microsoft The Almighty Buck

Bill Gates' Taxes Require Special Computer 428

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."
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Bill Gates' Taxes Require Special Computer

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  • by Osrin ( 599427 ) * on Wednesday February 01, 2006 @11:10AM (#14615604) Homepage
    Except the special computer that the IRS use for my taxes is an Altair.
  • by Anonymous Coward
    If the press could discern an attempt at a joke. Now THAT would be news.
  • by ma11achy ( 150206 )
    If I was Bill Gates, I'd go home and have a money fight with wads of thousand dollar bills.
  • by NiteShaed ( 315799 ) on Wednesday February 01, 2006 @11:11AM (#14615614)
    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 (Score:5, Insightful)

    by Alex P Keaton in da ( 882660 ) on Wednesday February 01, 2006 @11:11AM (#14615618) Homepage
    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?
    • Without seeing the interview I don't know the context of the remark. But I have to assume it was just a lame joke.
    • Its POSSIBLE that their normal software is programmed to to not accept numbers bigger than X so they need different software for gates. Obviously goverment efficiency mandates this must be on its own computer.
      • Re:I don't buy it (Score:5, Informative)

        by AviLazar ( 741826 ) on Wednesday February 01, 2006 @11:29AM (#14615800) Journal
        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 an insane amount....but still a drop in the bucket.
      • by crovira ( 10242 ) on Wednesday February 01, 2006 @11:30AM (#14615802) Homepage
        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.
    • Re:I don't buy it (Score:5, Interesting)

      by briancarnell ( 94247 ) on Wednesday February 01, 2006 @11:18AM (#14615695) Homepage
      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 [] for example).
    • But Bill saves ALLLLLL his receipts.
    • s/buy/get/
    • Re:I don't buy it (Score:5, Interesting)

      by Anonymous Coward on Wednesday February 01, 2006 @11:33AM (#14615836)
      "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 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 (Score:5, Interesting)

      by Rude Turnip ( 49495 ) <[valuation] [at] []> on Wednesday February 01, 2006 @11:41AM (#14615923)
      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.
      • by sjf ( 3790 )
        It has to be. Even Bill Gates does not get letters of apology from the IRS. No fricking way. Never happened. Chuck Norris on the other hand...
      • there are myriad of complicated structures (ie LLCs, FLPs, trusts, promissory notes) that require incredibly intense accounting.

        I have a new purpose in life, I will direct all my efforts to becoming an extreme, hardcore accountant.

        Bring it on.
    • Re:I don't buy it (Score:3, Informative)

      by hey! ( 33014 )
      Exxon-Mobile just posted a quarterly profit of 10^10$, up from 9.9x10^9$ in the prior quarter. Each of these figures was a record setter.

  • by digitaldc ( 879047 ) * on Wednesday February 01, 2006 @11:11AM (#14615619)
    There is only ONE computer [] 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.
  • Which only displays the numeral "6" in large repetitive multiples, usually in triplets.
  • Pure fluff (Score:5, Insightful)

    by MustardMan ( 52102 ) on Wednesday February 01, 2006 @11:12AM (#14615624)
    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
  • Well bad part about it is that the rest of us tax payers pay for it...ha ha ha
    • Yea, and Bill gates pays more taxes in one year then you and me earn in ten years. Talk about putting things into perspective.... Oh and my numbers are probably very very conservative.
      • by networkBoy ( 774728 ) on Wednesday February 01, 2006 @11:55AM (#14616067) Journal
        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.
  • by bigtallmofo ( 695287 ) on Wednesday February 01, 2006 @11:14AM (#14615650)
    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."

  • by SillySnake ( 727102 ) on Wednesday February 01, 2006 @11:14AM (#14615651)
    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..
  • by Manuscript Replica ( 307437 ) on Wednesday February 01, 2006 @11:14AM (#14615657)
    Perhaps this is more of a statement about our tax code than about Gates's fortune.
  • by Jaywalk ( 94910 ) on Wednesday February 01, 2006 @11:14AM (#14615663) Homepage
    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 [] to a UNIVAC [].
    • Do you REALLY want the IRS to use the latest and greatest technology with all of it's bugs? it is the same thing with NASA. They don't use the latest processors (I believe I read a long time ago on /. they use PIIs) because they want proven technology. This is one case where I am happy with our gov't using old technology...hell the gov't can't seem to get voting ballot machines to work correctly, it's amazing they got services like the IRS to work.
    • by dangitman ( 862676 ) on Wednesday February 01, 2006 @11:38AM (#14615887)
      Actually, I run a toy company and we just got an extremely large government order for Etch-a-Sketches.
  • Watch and find out!

    "My taxes can beat up your taxes!"
  • Right (Score:3, Funny)

    by suso ( 153703 ) * on Wednesday February 01, 2006 @11:16AM (#14615677) Homepage Journal
    They need a Linux computer
  • Begging (Score:3, Funny)

    by dupup ( 784652 ) on Wednesday February 01, 2006 @11:16AM (#14615688)
    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."

    • That's not funny.

      I've got the VAT people visiting me next Valentine's day. Do I want to be the recipient of a large dose of VAT-love? Nu-uh!

  • by ivan256 ( 17499 ) *
    If they're spending tax dollars on a computer to do one guy's taxes, I want some of the $30+K I sent to the government last year back. Seriously.

    If their automated system can't handle one return, then why the hell don't they just do that one by hand? Lazy bastards.

    As an aside, if this story were about Steve Jobs, all the replies would be bitching about how much press he gets.
    • ...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...
  • by Anonymous Coward on Wednesday February 01, 2006 @11:17AM (#14615691)
    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? (Score:5, Insightful)

    by goodben ( 822118 ) on Wednesday February 01, 2006 @11:19AM (#14615700)
    Anyone else consider that Bill was attempting a joke, but the interviewer couldn't tell? I mean only nerds get nerd humor, right?
    • Well, me for one. But it was quite funny.
    • I mean only nerds get nerd humor, right?

      Not even they do, it would seem...

    • Re:A joke? (Score:3, Informative)

      by C10H14N2 ( 640033 )
      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." ...granted, I imagine there's more literal truth to that story than this one.
  • by slashbob22 ( 918040 ) on Wednesday February 01, 2006 @11:22AM (#14615733)
    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.. (Score:5, Interesting)

    by MaGogue ( 859961 ) on Wednesday February 01, 2006 @11:25AM (#14615753)
    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)".
  • by Megane ( 129182 ) on Wednesday February 01, 2006 @11:25AM (#14615759) Homepage
    ...640K was enough for anybody?
  • I wonder (Score:3, Funny)

    by guspasho ( 941623 ) on Wednesday February 01, 2006 @11:26AM (#14615763)
    Does this special computer run on Windows?
  • Separate System (Score:3, Insightful)

    by ltbarcly ( 398259 ) on Wednesday February 01, 2006 @11:30AM (#14615811)
    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.
  • by mcho ( 878145 ) on Wednesday February 01, 2006 @11:33AM (#14615834) Homepage Journal

    ...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.

  • Excuse me if I don't believe this.
  • The Treasury Department computes its finances to 15 decimal places. []

    P.S. Incidentally they've just reached the current legal debt ceiling of $8.184 trillion and wont be able to issue new bonds until Congress raises it.
  • 1. Ints roll over at 2 billion but I doubt that they use ints for taxes.
    2. Even if it is a VERY old system most likely it uses BCD. No floating point rounding errors and used to be the standard for accounting system. Might still be for the high end ones.
    3. Lots of entities have been that rich in the past. I can imagine that the IRS needed special software for GM, Ford, and IBM long before Mr. Gates was more than a Yuppie.

  • Say what you will (Score:3, Insightful)

    by Billosaur ( 927319 ) * <wgrother@oEINSTE ... minus physicist> on Wednesday February 01, 2006 @11:39AM (#14615901) Journal
    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!

  • Any computer geek should know that once your fortune exceeds $2147483647 that you need to get a 64-bit processor and upgrade to Windows XP-64.

    Maybe the IRS is still buying from Dell and can't get a proper AMD64 processor.

  • Apparently they used to use one of their regular computers to do his taxes, but then Microsoft convinced them to switch from a Unix based system to a Windows one. Now they need much more powerful hardware, because 95% of the CPU cycles are used to run the spyware on it.
  • by VAXcat ( 674775 ) on Wednesday February 01, 2006 @11:41AM (#14615921)
    Yah, they hadda build one with dials that go to 11.
  • by FellowConspirator ( 882908 ) on Wednesday February 01, 2006 @11:42AM (#14615932)

    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.
    • Yes, GOTO programming is alive and well in the IRS tax forms.

      Except you are the computer and errors in your memory will cause heart pounding letters from the IRS.

    • by caudron ( 466327 ) on Wednesday February 01, 2006 @02:03PM (#14617562) Homepage
      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. :)
  • It wouldn't surprise me if the program the IRS uses to automate calculates only accepts 32bit unsigned integers [] which max out at 4,294,967,295 (or some similar range problem). It's not entirely unreasonable to guess that there are few enough cases of numbers greater than this appearing in whatever particular instance gates might be referring to that the IRS hasn't deemed it worthwhile to update the system and instead just does the math for those few people in Excel (possible irony alert).
  • The IRS has a department for handling corporate taxation, a small sub-department of which is for handling personal taxes for large income/asset citizens. It seems the mix up's occur when the normal tax departments process some of his holdings, and find on their local department network records that no taxes have ever been paid on the holdings, and send out some notices. There's never any names attached to the accounts at processing level, so it probably happens relatively often.
  • I'm confused by all the comments about the computer being just for him, or that there is something different about that one computer itself than any other. Reading TFA, it looks to me like the IRS standard software has a limit to what it can accept, probably due to input checking when someone making 1,000,000,000.00 in a year being considered an impossibility, and I'm sure the IRS is not allowed to do anything by hand (with the regulations for computerization that are thrown around), so they either modifie
  • by gelfling ( 6534 ) on Wednesday February 01, 2006 @11:49AM (#14616020) Homepage Journal
    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.
  • by ralphclark ( 11346 ) on Wednesday February 01, 2006 @12:09PM (#14616262) Journal
    ...that he's arrived - he has a 64-bit fortune.
  • by PhotoGuy ( 189467 ) on Wednesday February 01, 2006 @12:13PM (#14616323) Homepage
    "Barney, remember how I said we'd have to send away to NASA to calculate your bar tab? Well it came back...."
  • by vtechpilot ( 468543 ) on Wednesday February 01, 2006 @02:19PM (#14617763)
    ... and let me tell you, they don't have a clue. Did you know that more than half of the 1040's that get electronically filed, get sent to the IRS computers by Z-Modem? I'm serious. Z-modem inside a telnet session pumped through an SSL connection (the system sorta evolved that way from the pre-internet dialup system they used to use.) Now the new thing they are working on, MEF (or Modernized E-File) includes forms 1120 and 1120S which is income taxes for Corporations and S-Corporations. In an 1120 tax return you can actually send scanned PDF files, which I assume some human at the IRS has to then read. What was the point in developing these huge specs for XML based tax returns to allow automatic processing, if you can just send in a bunch of documents that require human intervention? Thats just bad design, but they also have problems with implementation. The acknowlegement files we get for the form 1120 also have broken XML schema locations. (I've been on them for about a week to fix this.) Of course the real interesting bit about MEF is that its basically a glorified file transfer system. They basically designed a whole new file transfer system that runs on SOAP and HTTP. The banks that we deal with in comparison do have a clue. The banks use Secure FTP, Which has worked flawlessly for the last 6 years.

    The icing on the cake? The company that has been contracted to build the MEF system? IBM.

Forty two.