Internal Revenue Service officials told the U.S. Senate Finance Committee last week that the initial lack of an automated system for detecting refund fraud could cost the federal government US$200 million to $300 million this year. The IRS said Computer Sciences Corp. failed to deliver a new system after the agency had pulled the plug on its previous one last fall. The older system has since been restored. CSC declined to comment on the situation.

Software error at Verizon inflates bills

Verizon Communications Inc. said it overbilled about 11,000 customers in the mid-Atlantic region late last month because of a software programming error that resulted in their calling plans being inadvertently changed. The New York-based telecommunications company fixed the error three days after it was discovered and is correcting the bills of affected customers.

Microsoft pulls plug on private folders

Responding to pressure from corporate IT managers, Microsoft Corp. has pulled a free tool called Private Folder 1.0 off its Web site. Systems and network administrators had voiced concerns that the tool, which lets Windows users create password-protected folders, could be used to hide inappropriate content or maliciously store files so they couldn't be accessed by other workers.