Is the IRS Scandal Microsoft’s Fault?


(This post originally appeared on Forbes)

Hmm….maybe Microsoft MSFT +0.95% is to blame for this whole IRS-email thing.

Just last week, “…a second federal judge has now ordered the IRS to explain under oath how the agency lost emails from former division director Lois Lerner, the woman at the heart of the Tea Party targeting scandal. U.S. District Court Judge Reggie Walton told Obama administration lawyers on Friday he wants to see an affidavit explaining what happened with Lerner’s hard drive. The IRS claims her computer suffered a crash in 2011 that wiped her email records at the time clean.”

Ah-hah! It’s a brilliant ploy. Can’t provide emails requested by the courts? Then just blame the computer guys! The computers crashed. It was a blue screen of death. You know what’s it like with Windows, right? We’ve all had this happen to us before. Who hasn’t had their computer crash? Curse you, Microsoft! This must be your fault! You’ve foiled us again!

In other words: you can’t blame Microsoft. Nice try.

Let’s assume that Ms. Lerner was using Microsoft Outlook as her email client. Outlook is still the most popular email software around (at least for now). Outlook is a client-side software which means that it’s installed on a desktop computer. It does save data. But it’s reliant on a server-side, email messaging platform in order to send out emails, like Microsoft Exchange or something similar. Sometimes a copy of that email does reside locally. But every IT firm I know who sets up products like Exchange (particularly in these times of cheap storage space) also configures it to save emails on the server as well. This enables the IT staff to administer users’ mailboxes, security, rules and, of course, backup the data. And it enables users to access their email online or from any other device they choose. In today’s corporate environments (and that includes 2011) it’s actually more difficult to setup a server-based email system where emails are NOT centrally saved.

In today’s corporate environments, computers running even older versions of Windows are more portals than desktops. As explained above, emails are almost always by default saved on a central server. Ms. Lerner likely did her document and spreadsheet work (assuming that’s the kind of thing a director actually does) on files that were automatically stored on a server somewhere else too. Even if she was saving this work locally, it’s Network Administration 101 to have these files automatically backed up to another location. Small businesses like mine pay around $25 per month to have all of our files automatically backed up using services like Carbonite or Mozy. I find it hard to believe that backups weren’t taken or stored since 2011 by the IRS’ IT team.

The “computer crashed” story also seems implausible for another reason: computers don’t really “crash” any more. OK, I admit that this may happen once in a while. But I just don’t see this happening at clients like it did many years ago. One reason is that so many of my clients are now using Apple AAPL +0.19% products and Apple products are really well made. But, say what you want about Microsoft, they learn and adapt. And Windows has become a very, very reliable system. Maybe Ms. Lerner’s version of Windows was a very old one but I would have to go back pretty far before Windows XP to find a version of Windows that would crash a hard drive so bad that it couldn’t be recovered. Was it a virus that did this? Something that snuck its way into the IRS’ network? That’s more of a concern to me. Not Windows.

And one other thing: Every accountant (like me) knows that the IRS’ record retention policy ranges from 3-7 years for businesses. We generally use seven years as a rule of thumb for our clients. Imagine me telling an IRS auditor that I couldn’t retrieve the information requested from two years ago (this investigation began in 2013) because my “computer crashed.” Even my smallest clients back things up and have them stored for years – especially server based data stored in their accounting and…yes…email systems. It’s too easy and inexpensive not to do this with today’s services.

So did Ms. Lerner’s computer really crash, wiping out all her data, including emails? That story’s really hard to believe for anyone with an IT background. It’s easy to blame Microsoft for our problems. That used to be a great excuse. But that excuse is getting harder and harder for anyone, even the IRS, to make.


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