Such a blue envelope keeps staring at you from the corner of the kitchen table

A disaster is unfolding behind the scenes at the tax authoritiesSAM VERBEEKGEERT WALINGRUUD DEIJKERSJEROEN VAN WENSENNovember 09, 2023Reading time: 1 minute Tax Office in The Hague.In this episode of “Every Week”, Geerten Waling and Sam Verbeek talk to Jeroen van Wenden and Ruud Deijkers about the complex world of the tax authorities.BEHIND THE SCENES AT THE TAX OFFICEThey dive into the challenges of outdated ICT systems and the difficult implementation of new laws, a problem that often sidelines politics. With an exclusive look behind the scenes at the ICT staff at the tax authorities in Utrecht and Apeldoorn, they reveal the reality of an organization that is struggling with modernization and efficiency. The discussion highlights the discrepancy between political expectations and the operational reality of the tax authorities, with the reflex “not working, can't” being a common response to new tax proposals. This raises questions about the service's capacity to meet the requirements of rapidly changing tax legislation and the pressure this places on officials. They also explore the consequences of the benefits affair and how it has affected the tax authorities. They discuss the need for a common language between ICT and policy makers to prevent future problems and improve services.Deijkers and Van Wenen offer a unique perspective on the internal workings of the tax authorities and the challenges ahead of us.Podcast about the tax authoritieshttps://open.spotify.com/episode/1iKLJK0izmJKDihwSiY9U8?go=1&sp_cid=49eb716653c1e182d66b56cbe8369460&utm_source=embed_player_p&utm_medium=desktopBehind the scenes at the tax authoritiesRUUD DEIJKERSJEROEN VAN WENSENNovember 09, 2023Reading time: 16 minutesIllustration: Erik VarekampWhy does the tax authorities use antique software and can barely implement new laws? Looking for answers ran WE join the ICT professionals in Utrecht and Apeldoorn. A unique opportunity to look inside the black box that has always been the tax authorities. “We have to speak the same language.”RUUD DEIJKERS (LEFT) IS EDITOR-RESEARCHER JEROEN VAN WENSEN IS A FINANCIAL JOURNALISTBy default, the tax authorities go crazy when the House of Representatives comes up with a new law. Rapidly implement new tax rules for wealthy citizens - box 3? How do they get it into their heads? The tax authorities reflex — “can't work, can't” — actually sidelines politics. So top officials of the service show up in The Hague again and again to answer to parliament. Excuse: faulty ICT. Come on, say. Even teenagers manage to assemble computer programs in their rooms. And an organization with 27,000 employees is unable to add a simple fact to the tax form? Are the Dutch tax officials incapable “window gazers”, or is there something else going on? Because a concrete answer to that question cannot be derived from briefings in the House of Representatives or from official documents — far too abstract — sent WE on February 21, 2023, a request via WhatsApp to the spokesperson for the Ministry of Finance, which includes the tax authorities. Whether we could join the ICT professionals at the tax authorities.VOYAGE OF DISCOVERYAnd so in recent months, we have regularly stayed in open-plan offices and at coffee machines run by the tax authorities. We spoke to officials and watched with programmers to see for ourselves what a hell of a job it is to put a simple tax rule on the servers in the data center in Apeldoorn. Like Tintin, we entered the black box that the tax authorities always were. And that's where the puzzle pieces fell into place.De Knoop, formerly the Lieutenant General Knoop Barracks and previously the headquarters of the Army, is connected to Utrecht Central Station by a footbridge. Finance officials and the tax authorities who are brought in by trains take glass elevators to flexible workplaces on one of the twelve floors in the sunlit atrium. They can visit The Green House restaurant next door for pizzettes and lightly toasted tartines topped with ingredients from the urban farm — our own urban farm. There is a power strip near each table, so working with a laptop is also possible. There is little point in stepping into De Knoop and walking around between desks with a notebook. Then you see what you see in every office: men and women behind laptops and in meeting rooms. Also useless (and boring): looking over a programmer's shoulders on any given day. An outsider has no idea what he sees then. That is why our journey of discovery is at the same time an unofficial “Crash Course in Tax Service”. And it logically starts with getting an idea of how the lines run. To find out, we start as high up the tree as possible.TAX WATCHERSDe Knoop in Utrecht. Illustration: Erik Varekamp Lift up, through the corridors. Tineke Bijl (61) sits in a meeting room. She was once a computer programmer, but her jacket reveals that she is now higher up the pecking order. The business economist has an impressive resume with leadership positions at companies such as ING, CapGemini and Nationale-Nederlanden. Via a screen at the head of the table, there is a video connection with Koos Veefkind (58), another heavyweight. He was previously ICT director at the police, De Nederlandsche Bank and the Central Bureau of Statistics. Still, nothing human is alien to him: he sits in front of the camera at home eating a sandwich.READ THE AUTHORS' COMMENTS: ICT PROBLEMS AT THE TAX AUTHORITIES THREATEN A FISCAL DISASTERTax service watchers — they exist — will recognize the pair as the top officials who provide technical briefings in the House of Representatives. They lead the directors responsible for providing information. Things go wrong with ICT. ICT is the provision of information. So we're in the right place. Bijl manages policy makers who set the lines and set priorities. The executors work under Veefkind, say the ICT department of the tax authorities. Together, the approximately 4,000 employees of these departments have the toughest and most complicated ICT job in the Netherlands. Just think. They must ensure that the State collects nearly 400 billion euros in taxes and contributions per year, that millions of tax assessments are flawlessly issued and hundreds of millions of payments are processed (from VAT and income tax to road tax), that data about all citizens and companies is linked together and kept safe for years. The tax authorities are a complex tangle of organizational units and departments. Which thread in that tangle should we follow to clarify where things are going wrong with ICT? It is good to mention at this point that the tax authorities do not use a sentence without abbreviations. To understand these abbreviations, you need to have the LvA ready, it turns out to be a common joke for newbies: the List of Abbreviations. The most interesting branch is 'IH'. That stands for income tax. It's the service's pressure cooker — there's no such pressure on any part. Bijl: “IH is an interesting area, about which questions are being asked in the press and House of Representatives.” Veefkind: “Yes, a mini ecosystem where everything comes together. On the one hand, there is the annual tax return cadence. On the other hand, we need to make sure that we implement new legislation every year. ' A relentless stream of wishes from the House of Representatives comes to income tax. Veefkind: “We have an overcrowded wish list. From a variant of box 3 to you name it. “Before we enter the wonderful world of income taxation, we first find out what ICT generally looks like at the tax authorities.DIGITAL BUILDINGSOld systems of the tax authorities. Illustration: Erik VarekampFrom the sixties, they started computerization at the service: from typing punch cards to extensive network systems. “Systems that are decades old are still running,” says Martijn de Bruijne (46), a friendly and smart man who is giving a powerpoint presentation in De Knoop. Some of these computer programs date back to the 1970s. De Bruijne is lead enterprise architect under director Bijl, say the technical brain behind the complete renewal of ICT. Like a rocket scientist, he comes up with solutions to connect the countless parts and chains within the tax authorities. The tax authorities appear to be working with 900 (!) various computer applications. This includes programs for entering officials' leave days and tax reporting systems to handy calculation tools in the Excel spreadsheet program that are exchanged internally. Over the past forty years, computer programs have been linked together that no longer meet modern safety and technical requirements. Many of these digital structures are now being replaced one by one by more modern versions.MONOLITHSThe good news is that three quarters of the vulnerable buildings have now been replaced. The bad news is that the remaining 26 percent of that “technical debt” affects the essential processes, the major tax systems for VAT and payroll taxes, among others. De Bruijne calls these obsolete systems “monoliths” because they stand out like unshakable rocks. New parts have been added all the time. If you change one or another function in one part, you will also disrupt functions in other parts — sometimes without knowing it. These monoliths were developed on platforms such as Cool:Gen and use the computer language COBOL.de Bruijne: “We can't find programmers who can work with Cool:Gen or who are willing to be trained to work with this type of archaic software.” Meanwhile, all data about citizens, companies and the laws and regulations themselves are locked in those ancient computer programs.LITTLE BY LITTLEWhy don't they make it easier for them at the tax authorities by starting with a clean slate? Control-Alt-Delete, erase everything, and then install a fresh, new software package. That question isn't that crazy. In the past, serious consideration has been given to developing a completely new tax authority and, as soon as it is ready, to replace the current one in one fell swoop. Apparently, that plan has not been implemented. “The ambition for such greenfield died in beauty,” says De Bruijne, “it turned out to be far too complex.” It would mean that the tax authorities would have to almost double the ICT capacity over a number of years. One branch of the organization then keeps the obsolete systems up and running and processes the relentless stream of new laws and regulations. The other branch is building the shadow system, but must also continuously adapt the new software to new legislation. A hopeless journey. De Bruijne: “You have to cut it into pieces and modernize it bit by bit.'The ambition for such greenfield has died in beauty. So gradually renew ICT. And that with the programmers that are available. And those ICT professionals must combine modernization with the unbridled stream of new tax rules. This means that choices are being made. What will be addressed first? What will be on the shelf or will be swept off the table? How do you stay flexible with limited manpower?POLISH COUNTRY DAYThis is where Patricia Hol (43) appears. She is head of the portfolio management department, also under Bijl. Like De Bruijne, she doesn't fit the cliché of an official: not a dusty office clerk counting down the hours between nine and five. She is an ambitious and enthusiastic woman who is just as good at a corporate company could work. In a mega-organization where so many changes are being carried out, a department like Hol's is needed to help make choices. To get an idea of how this works, let's take a recent practical example: the compensation for the energy bill for houses with district heating that was introduced in early 2023. Hol: 'A measure that the tax authorities must implement, but that ends up in an overcrowded portfolio. That means we can't do anything else. ' At the tax authorities, they try to be agile, but also to keep their eyes on the longer term. Such a multi-annual plan also requires projects to die. To do this, a Polish Country Day is organized every so often. All kinds of managers and specialists from the tax authorities and other organizations that want something from the tax authorities — such as the ministries of Finance and Social Affairs — are put together like gladiators in a room. If Hol is to be believed, things are going strong. The managers are trying to convince each other that their project — for example fighting fraud, complying with privacy legislation or modernizing ICT — should top the list. Magnetic stickers are enthusiastically placed on boards. And there is “poker” — a modern ICT term for estimating how much time the projects take. Hol: “Such a day is also meant to make everyone aware that you can't do everything at the same time.”RUNNING FOR YOUR LIFEThe Security Operations Center in Apeldoorn. Illustration: Erik Varekamp We are in Apeldoorn. Accompanied by a security guard, we walk through a lock gate and through a corridor to a second lock. It looks like a small glass revolving door from science fiction movies. Like you can be teleported to another dimension through it. If you want to enter unaccompanied, you should place your hand on a biometric sensor. A scale in the floor of the revolving door measures the weight to ensure that someone else does not sneak in. We are at the nerve center of the tax authorities: the data center on the heavily guarded Quintax site on the Laan van Westenenk. Everything at the tax authorities is massive and this is one of the places where that massiveness is tangible. The data of citizens and companies that the tax authorities collect does not hang in some mysterious cloud over the Netherlands. They are here, along with data from Customs, Surcharges and the Tax Intelligence and Investigation Service, stored on physical computers in large “data rooms”. Should a bomb fall on one building, the other building is still thereVia headphones, also hearing protector against the noise of the cooling systems, the energetic team manager Jan Esselink (61) fires facts and figures at us. We're talking about a 1 megawatt, air-cooled data center. In the event of a power failure, a huge diesel generator keeps the servers and thus the tax authorities as a whole running. In the event of a fire, argon and nitrogen gas from 180 bottles is released into the room within seconds to stifle the fire. Employees then have to run for their lives. We step into one of the metre-long shelving units with devices with blinking lights and carefully arranged cables on both sides. At the bottom of the cabinets, the servers are powered with electricity, Esselink explains, and the cables for data run upstairs. The data goes in and out via fiber optic cables. With multiple connections, the data center is linked to the twin data center that is 5 kilometers away. Should a bomb fall on one building, the other building will still be there.HIGHEST STATE OF PREPAREDNESSIn one of the meeting rooms on the Quintax site, we have lunch with Hans Hoekzema (50) and Guus Heesink (53), both officials who work under director Koos Veefkind. Hoekzema and its employees are responsible, among other things, for providing information about IH - income tax, as we now know. Heesink comes up with solutions for the complicated ICT problems that Hoekzema faces. They have short lines of communication with the Ministry of Finance. If the Secretary of State has a problem, Hoekzema and Heesink will be called in. After December 2021, for example, they were saddled with implementing the Supreme Court's devastating “Christmas judgment” on the savings tax — it was summed up when large savers had to get overpaid tax refunded to their accounts. IH was placed on high alert. The operation was carried out almost flawlessly: not only did all tens of thousands of victims get their money refunded automatically, a result of the ricocheted law was also that the ongoing tax return campaign for 2021 had to be overhauled immediately.PLUG POWERHoekzema accompanies us to the SOC, the Security Operations Center, right next to the data center. As exciting as that sounds, it is, too. If hackers try to penetrate the servers in the neighboring halls from outside, the cyber security officers will see it here — if all is well — immediately. An on-site manager has “plug in”: in the event of an acute attack, he can pull the plug on the entire data center.Around midnight, there is an old-and-new feelingThe heart of the SOC looks like a NASA mission control center: an auditorium with a meter-high video wall. In the room, the beats of trip hop music sound. The screens show, among other things, which websites currently refer to those of the tax authorities, whether the link with the DigiD identification system works and how much the load on the servers is. All tweets mentioning the tax authorities are on the screen and are being watched. On March 1, the first day that taxpayers are allowed to file their tax returns, is rush hour in the SOC. “Around midnight, there is an Old and New feeling,” says Hoekzema. The first reports arrive within the first minute after midnight, then tens of thousands per hour. Last year, there was a major failure: the declaration system was unavailable. On the screen, the security guards and income tax people, including Hoekzema, saw the stream of complaints. However, the glitch was in DigiD, which is managed by Logius, which in turn is part of the Ministry of Internal Affairs. At the tax authorities, everything went according to plan. Whether or not something went wrong with Logius does not matter to the people at the SOC. They need to focus on their own computers. They no longer allow themselves to be fooled by all the outside criticism.BLUE ENVELOPESSo safety is quite 'a thing' for the tax authorities. The entire financial and fiscal property of millions of people is stored in the Veluwe. You shouldn't think about malicious people coming in. But a DDoS attack, where cybercriminals can take down a website, is also disastrous: the government's financial system depends entirely on working computer systems. So why do blue envelopes — made of paper — still fall on the mat, if everything is so digitized? Isn't it possible to make a profit in manpower and money here? So not. An email or app message usually appears on your screen when you have something to do other than study tax letters. After clicking away, you already forgot about it. Paper letters are necessary to remind citizens of their obligations, even if the letter refers to a website. “Such a blue envelope keeps staring at you from the corner of the kitchen table,” says Geert Beuving (64), a big, firm man who holds sway in the printing shop, right under the data center.Such a blue envelope keeps staring at you from the corner of the kitchen table.There are rolls of paper and mail crates. Computer-controlled machines shoot letters and envelopes. Although these halls smell like lubricating oil, this is also information technology. The millions of letters, mostly personalized, are printed automatically, packed in envelopes and sent bundled. At the same time, it is as massive as it is meticulous work. It must not happen that dozens of letters are not sent due to a mechanical error: this puts the addressees in trouble. Electronic eyes follow small QR codes on the letters to make sure everything is going well. Beuving: “And if a letter ends up wrong behind the envelope window, more becomes visible than allowed: so that's a data breach. “If the premiums for surcharges are known at the end of the year, Beuving and his team have only a few weeks to print and send 6.5 million letters. “We continue to work at night and also at the weekend. So I'm at the machines and take care of the food. We print millions of pages: it's a blast! 'COVETED NATIONAL PASSProgrammers at work in Utrecht. Illustration: Erik Varekamp To complete the picture, we now want to see ICT professionals who introduce income tax rules at work. To do that, we go to an office on the Graadt van Roggenweg in Utrecht. Between nine and half past ten in the morning, we join the daily 'stand-up', the chat round, by the Rule Development and Management team, part of income taxation. We agree to call everyone by their first name only. Erik, a so-called rule analyst, chairs the stand-up. Cees, how are you? Sofia, did the rule test work? Welcome, Eelco, it's your second day of work and you've already received your Rijkspas, I understand? Thirtysomething Eelco is very proud of the coveted pass that gives officials access to office buildings across the country and allows them to print, for example. After the stand-up — and a walk past the coffee machine — half of the team is looking for a spot in the office garden under the suspended ceiling. Around the flex desks where we sit, an ingenious invention for quickly automating tax rules and laws comes up. One of the inventors is policy officer Elian.SUPERSTAR“Do I hear my name there,” it sounds from an office island away. Perhaps not coincidentally, the income tax superstar is present. With a colleague, Elian — short hair, rimless glasses, friendly face — introduced a way to communicate with computers in plain language. The underlying concept was co-developed in the nineties of the last century by American business guru Ronald G. Ross. You have gold in your hands, the guru Elian said: “My colleague and I often sat across the train and came up with our plan along the way.” After a successful test with a prototype, RegelSpeech, as the language was called, was introduced in income tax. According to Elian, Ross's mouth fell open when he saw the result at a conference: “You have gold in your hands.” In a conference room, Erik and colleagues work on “task 2690”. The screen shows the assignment: a minor change in the computer systems that means that citizens with a residual mortgage debt must fill out a full tax form instead of a shortened form.HOLY GRAILProgramming using RegelSpeech involves three steps. First, the change is translated into so-called Regelspraak rules — a type of structured Dutch. After that, conclusions are added to those rules. Example: someone does or does not have their own home and it is true or false that someone has residual debt. “With the last step, the miracle happens,” says Erik: words and decision rules are automatically converted into modern code. No COBOL.Okay, this system is apparently the holy grail, but completing the three steps for the simple task 2690 still requires a battalion of experts. In addition to rule analyst Erik, who is now handing out bastognecakes, there is a tax specialist who knows everything about mortgage interest deduction, a tester and the official who wrote the policy document containing the change. Carrying out task 2690 is not going as smoothly as hoped. In step two, a word keeps glowing red because the system does not recognize it. A short discussion follows, after which Erik decides to take it up himself later that day. Should Erik complete the task today, the process will not be complete yet. First, a teammate checks for errors; in other teams, they check that the change does not mess up the declaration form. Thereafter, it must be ensured that the change appears without failures in the declaration program of citizens. Only after a security check does the modified code end up on the servers in Apeldoorn.AGILE EXECUTION FACTORYFrom the top officials to the printer of blue letters, we looked at ICT. Where is it going wrong now? Of course, there are the obsolete computer languages that only the old guard can work with. When those experts retire soon, the old systems must be modernized. If that does not happen, the wish lists from The Hague cannot be executed. Couldn't the processes be more efficient? Yes, for example with “miracle software” RegelSpeech, which should turn the tax authorities into an agile execution factory. Even then, you can't avoid documenting and testing properly. Otherwise, you won't remember what you built later or run major risks. The glitch in the chain will be exacerbated by the difference in language at departments in The Hague and at the tax authorities. For a lawyer, a legal text may seem obvious, but a rule analyst like Erik still picks out ambiguities: words colored red. Elian: “Everyone must speak the same language.” Quick to open a window with additional programmers, then? Not an option: programming at the tax authorities requires years of training. But the tax authorities lack trainers and years.THINK BEFORE YOU STARTThe biggest problem is that any new fiscal wish that has to be implemented immediately disrupts modernization. At the end of October, Secretary of State Marnix van Rij (CDA) warned the House of Representatives not to demand too many tax changes before 2024: “Think before you begin”. But the representatives of the people did not care. They came up with a freakishly long list of tax changes. We now know that due to the massiveness of the processes, changes are never small. The Rule Development and Management team continues undeterred. And in a few weeks, the team trip will be to the Achterhoek. After coffee and currants, a covered wagon ride follows. Erik: “We end with a barbecue in our colleague's garden.” Ruud DeijkersRuud Deijkers (1981) is a researcher and journalist for EW.