BY PAUL BARTON
Enquirer Washington Bureau

WASHINGTON - Federal tax collections will be chaotic if the Internal Revenue Service can't reprogram its computers by 2000, a top IRS official said Thursday.

Arthur A. Gross, chief information officer for the IRS, said he has a ''reasonable degree of confidence'' the agency can do it. But he added that the task facing the agency in the next two years is daunting. The IRS has set January 1999 as the target date for straightening out its computer problems.

''We're running a marathon race at sprinter's speed,'' Mr. Gross said. ''Nothing else will do.''

Agency officials told the National Commission on Restructuring the IRS that meeting the challenge has become their top priority.

Mr. Gross said it will take at least $155 million to fix the problem.

One of the co-chairman of the commission, Rep. Rob Portman, R-Terrace Park, said he was concerned by what he heard.

''I am not convinced they have it under control,'' Mr. Portman said, pointing to their requests for additional staff and money.

''The consequences of not solving it are disastrous for the federal government.''

The IRS collects $1.4 trillion in revenue annually.

IRS spokesman Steven J. Pyrek added later that the problem boils down to an easy-to-understand disaster.

''The money that comes into the government won't be accounted for,'' he said.

Processing of returns, refunds and notices will be among those items put in jeopardy.

Since the advent of computers, systems have used two digits to distinguish between years. For many government computers the year 2000 will be indistinguishable from 1900, creating the likelihood that date-sensitive calculations will be incorrect for years past 1999.

Many of the government's computer systems were designed and developed a generation ago and use computer languages that are obsolete. The conversion problem was not recognized when the systems were installed - many in the 1960s - because it was expected they would be replaced long before 2000.

IRS officials recently disclosed that a $4 billion computer modernization program has been a failure.

To fix the year 2000 problem, the IRS is having to analyze - and, in many instances, change - close to 100 million lines of computer code.

Other members of the commission said they were not reassured by the IRS testimony, either.

''The prospect of running a marathon at sprinter's speed is a frightening one for the taxpayer, I would suppose,'' said David Keating of the National Taxpayers Union.

Mr. Portman added: ''The IRS is already not trusted by a lot of Americans. If this were to happen, I think it would be a real problem not only in terms of running the government, but also in terms of people's level of trust - confidence - in the Internal Revenue Service.''