...The IRS has failed twice to modernize its system, in the 1970’s when taxpayer privacy issues surfaced and in the mid-1990’s when the IRS spent ten years and $2 billion on the project and had little to show for it. The current project launched in 1999 with a budget of $8 billion. The project is late and over-budget; problems have been well publicized after the release of the IRS Oversight Board investigation...
http://www.kellogg.northwestern.edu/student/courses/tech914/...
AFAIK, the IRS dropped $10 Billion in IT money in just over a decade with little to nothing to show for it.
I used to joke around and say heck, they could have paid me 2 Billion and I would have also provided them nothing, but look at the money they would have saved!