back to article The IRS spaffed $12m on Office 365 subscription IT NEVER USED

A report on spending from the office of the US Treasury Inspector General for Tax Administration (TIGTA) claims that between June 2015 and June 2016, the tax collectors paid $12m for subscriptions on Microsoft Office 365 and Exchange Online that were never used. The TIGTA report [PDF] found that in 2014, the IRS kicked off a …

  1. Anonymous Coward
    Anonymous Coward

    *FacePalmGroan*

    Damn it guys, can't you do anything right?

    If I had purchased a metric fuckton of MS product, written it off as a business expense, then failed to actually USE any of it, you bastards would be climbing up my arse with an electron tunneling microscope to audit the fuck out of me, but when YOU do it it's ok?

    *Double handed rude gesture*

  2. Herby

    My government...

    At its best. Wasting money it could use to better reform the patent system.

    (*SIGH*)

    1. Anonymous Coward
      Anonymous Coward

      Re: My government...

      Or some other more important things? Like saving peoples lives in emergency services?

  3. Anonymous Coward
    Facepalm

    Your tax dollars at work!

    "Work" being used in an ironic sense.

    1. MrDamage Silver badge

      Re: Your tax dollars at work!

      No, it is work.

      Incompetence is what they throw in for free.

  4. hypernovasoftware

    The IRS is just another bloated, money wasting government institution.

    As is the Dept. of Education, the EPA and countless other departments.

    Change is coming and the people in those departments should start looking for work now.

    1. Anonymous Coward
      Anonymous Coward

      "The IRS is just another bloated, money wasting government institution."

      Taxation is theft, right Comrade?

  5. Anonymous Coward
    Anonymous Coward

    Hey at least it wasted the money with an American company.

  6. Justicesays
    Devil

    I can see it now...

    PHB: So, I need a plan for the next email and server upgrade.

    Guy1 : Lets buy office "in the cloud" instead of hosting our own email and file servers.

    Guy2: Great idea, and we can save money on local support, servers, all that stuff

    PHB: I'll raise the PO, good job guys.

    ... Sometime later...

    Security guy: I just heard that we purchased office 365 for the whole organization.

    PHB: Yeah, isn't it great!

    Security guy: You realize that this means we'll be storing all our email and documents on Microsoft servers? And that we have at least 3 ongoing cases where we are investigating them for billions in taxes right now? Do you think it's a good idea to potentially let them read all our email , investigation outcomes and case preparation?

    PHB: Err...

    Security guy: Yeah that's what I thought. Migration cancelled. How much was that again?

    PHB: $12 million...

    1. Barbarian At the Gates

      Re: I can see it now...

      This could take "government transparency" to a whole new level. Add in some off-shore data centers for data resiliency and availability and think of all the additional "oversight" other countries could have over IRS email traffic.

      I mean, what's the big deal, the US government doesn't see anything wrong with snooping emails of foreign nationals, I'm sure they wouldn't object to having other countries take a peek at tax related messages.

      1. Doctor Syntax Silver badge

        Re: I can see it now...

        "Add in some off-shore data centers"

        At least Microsoft would be prepared to go to court to stop the FBS snooping on the IRS.

        1. Anonymous Coward
          Anonymous Coward

          Re: I can see it now...

          At least Microsoft would be prepared to go to court to stop the FBS snooping on the IRS.

          Not quite - it depends on how the request is framed. If it comes accompanied with a National Security Letter, Microsoft would be breaking the law talking about it..

    2. Fruit and Nutcase Silver badge
      Coat

      Orifice365/BackOrifice365

      @Justicesays

      Security guy: You realize that this means we'll be storing all our email and documents on Microsoft servers? And that we have at least 3 ongoing cases where we are investigating them for billions in taxes right now? Do you think it's a good idea to potentially let them read all our email , investigation outcomes and case preparation?

  7. Paul Hovnanian Silver badge

    $12 million?

    Big deal. That sort of expenditure regularly falls behind the filing cabinets at some of the outfits (private business) that I've worked for. Call me when they buy $250 million of automated test gear, put it o a shelf somewhere and then sell it off for surplus, unopened.

    1. Martin Summers Silver badge

      Re: $12 million?

      Would you have the same attitude if it was stolen from the business? Cos that's effectively what they did to the tax payer. Send me some of your hard earned would you? It's a short month and it seems it wouldn't make a difference to you anyway.

      1. chivo243 Silver badge

        Re: $12 million?

        Ahh, yes the tax payers. And how many of them are willing to risk an audit by squawking about how a few cents of their money was shamefully wasted over what size of an infrastructure?

        This could be written off as buying a few too many tiles for the shower, or a couple too many meters of carpet for the rumpus room.

        I'm not in favor of government cock-ups, but some are easier to swallow than others ;-} Count this one as a cocktail weenie...

      2. veti Silver badge

        Re: $12 million?

        Yep, the average poor ol' longsuffering US taxpayer is down by almost 9 cents as a result of this cock-up. Or rather they would be, if the budget were balanced - actually it's more like 7 cents of taxes plus 2 cents of debt.

        Tell you what - just out of the goodness of my heart, I'll send you your 7 cents, if you'll pay for the postage.

  8. JeffyPoooh
    Pint

    Auditing the Auditors...

    Okay.

    Who's going to audit the office of the US Treasury Inspector General for Tax Administration (TIGTA) ?

    Don't say 'IRS'. <- Boring loop.

    It will be much better as, 'It's Auditors all the way down.'

    1. Old Handle
      Headmaster

      Re: Auditing the Auditors...

      In all seriousness, it would be the job of the GAO (Government Accountability Office, formerly General Accounting Office).

  9. frank ly

    Good Citizens?

    "... the IRS was trying to extract billions in taxes from the software giant."

    We hear a lot about Apple, Google and Facebook using shady (but legal) accounting tricks to avoid paying taxes but I've not seen any articles about this sort of behaviour from Microsoft. Is that because they are 'good citizens', from a tax payment viewpoint?

    1. Ken Moorhouse Silver badge

      Re: Microsoft 'good citizens', from a tax payment viewpoint

      I heard some while ago that Microsoft set aside a hefty slice of their revenue to offset against future product support costs. Now for server products and for retail products, yes I can understand that.

      But what about OEM products where there are zero support costs? Is the reason for the lower cost of these items (apart from a reduction in packaging cost, and the fact that licenses are not transferable) that the difference between the selling price and cost price of OEM items not contributing to that support contingency fund?

      (Responsibility for support for OEM products falls upon the Manufacturer of the Original Equiupment where the product is tied to).

    2. oldcoder

      Re: Good Citizens?

      Nope. MS got in trouble in Oregon for shifting its taxes to Nevada I think it was. And then asking Oregon to install an exit from a freeway that went directly to the Microsoft campus...

      We don't hear about it because Microsoft has its hands in nearly every thing.

    3. Hans 1

      Re: Good Citizens?

      > Is that because they are 'good citizens', from a tax payment viewpoint?

      Of course they ain't, if the IRS is after them for billions, they must be doing something wrong, right ?

  10. mIRCat
    Black Helicopters

    You get out what you put in.

    Guess I can't feel to bad for not paying into the system then.

  11. Anonymous Coward
    Anonymous Coward

    Not just government

    I suspect this has happened at quite a few large private companies too. Our group IT moved us onto Office 365 a while ago, but I'd be willing to bet >95% of employees aren't even aware it exists.

    1. Adam 52 Silver badge

      Re: Not just government

      So did we. We don't use the cloud version (Google Enterprise customer) but it was the cheapest way to licence the desktop installs of Word and Excel.

    2. DonL

      Re: Not just government

      "Our group IT moved us onto Office 365 a while ago, but I'd be willing to bet >95% of employees aren't even aware it exists."

      We bought Office365 licenses too, but only because it is cheaper than on-premise-only but includes the on-premise Office licenses as well and is licensed per user (instead of per install, which is tricky to track). We never used or activated the online part.

      Are they sure the government didn't do the same?

      1. Danny 14

        Re: Not just government

        We get o365 for free with our core desktop office and cals. Never used it, never set it up and ive certainly not told staff. Seems the IRS was getting a bum deal.

  12. TRT Silver badge

    How many seats did that buy?

    It seems rather a lot.

  13. Sgt_Oddball

    oh come now

    We've all planned to do some big project, bought the bits and run out of time or energy to sort it out.

    1. Anonymous Coward
      Anonymous Coward

      Re: oh come now

      Guilty as charged! Also, it occurs that if the subscriptions had been used, it might cost significantly more to extricate themselves from the cloud once it finally gets through that a government tax operation has NO BUSINESS putting their user's private data on a foreign company's servers.

  14. Wade Burchette

    Not surprising

    Have you ever dealt with a lifelong government employee who was responsible for that bureaucracy's budget? I have. In the private sector, you have to earn money; in the public sector, you take money. When you have to earn money you appreciate how difficult it can be to obtain so you are careful to not waste it. It is quite different when you take money. There was no effort required to get the money, so you do not appreciate how hard it is to get.

    Now, yes there are many exceptions. This is not meant to demean the people in the public sector. It is to help you understand why waste in government is rampant. Their experience in life is different.

    1. Sureo

      Re: Not surprising

      The politicians waste/steal/misappropriate far more than the bureaucrats.

  15. Zack Mollusc

    "The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise," the report found.

    How unlike the purchases made by business.

    1. Stuart Castle Silver badge

      "The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise,"

      Sounds familiar.

      Back in the early 2000s, my current employer spent (apparently) a small fortune on a Lotus Notes system with the idea that it would help us integrate various systems, and manage the staff calendars more effectively than they could.

      A couple of years later, we introduced Exchange to do the same, so I asked our Lotus Notes admin what happened to the state of the art server we'd bought to run the Lotus Notes server components. He said, "Oh, that. It's under my desk keeping my feet warm". I will say, even in the dead of winter, it did a good job of keeping the office warm with no other heating sources.

  16. Ken Moorhouse Silver badge

    Have they locked down the cloud elements of the subscription?

    Though corporates throughout the world will lock down their networks and local hardware against unauthorised data exfiltration, how many will lock down users ability to store data in the cloud by virtue of it being part of their paid-for Office 365 subscription?

  17. Griffo

    It was probably cheaper

    Whoever wrote the article probably has no clue on Microsoft Licensing, so let me explain.

    Microsoft, like every other software vendor in the world, has long had a concept of software maintenance. This provides users with the ability to upgrade to latest versions every time one is released, as well as providing maintenance releases etc. Microsoft long ago named this Software Assurance and added in a bunch of other benefits including free services, training, home usage rights etc.

    Several years ago, while pushing O365 hard, Microsoft made it CHEAPER for organisations to move to an online SKU than to just keep maintenance for their on-premise CAL's. So you could buy an O365 E3, keep the maintance inplace for Exchange, SharePoint, Skype etc, and HAVE THE CHOICE as to whether you remained on-prem or moved to O365. The Office CTR version also provided a vastly simpler way to manage home-usage rights.

    So.. it's easy to say that it was "un-used" but a proper analysis will most likely show that they actually saved more money on software maintenance while increasing the flexibility to consume either on-prem or cloud solutions.

  18. Fungus Bob

    If any government organization should be proud to pay the Windows Tax to support our Microsoftian Way Of Life, it should be the tax collection one...

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