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IRS lost millions of taxpayer records, federal employees don’t know what happened



Republican lawmakers are looking for answers after the government’s Internal Revenue Service lost millions of taxpayer records; federal employees don’t know where they disappeared to. Republican Senator Chuck Grassley of Iowa and House Ways and Means Chair Representative Jason Smith (R-MO) sent a letter to IRS Commissioner Daniel Werfel raising concerns about the IRS’ inventory of taxpayer records.

Among the concerns include taxpayers’ identities being stolen by nefarious actors. “The IRS’s lackadaisical attitude towards the loss of millions of taxpayer records containing Social Security numbers, addresses, and other sensitive tax return information is appalling,” the letter said. “The American people deserve better.”

A recent Treasury Inspector General for Tax Administration report (TIGTA) found millions of the microfilm records of individual and business tax records stores in warehouses around the country by the IRS were unaccounted for. Federal employees were unable to answer questions as to what happened to the records.

The letter details issues such as improper storage:

TIGTA also reported that the IRS was unable to locate any of the fiscal year (FY) 2010 backup records that should have been sent from a Tax Processing Center in Fresno, California, to Kansas City, Missouri. In addition, the IRS could not account for 4,500 backup cartridges from FY 2019 containing individual taxpayer information and 4,000 backup cartridges from FY 2018 containing business tax records. This means the IRS cannot account for possibly 17 million tax records between FY 2018 and FY 2019 alone.
Moreover, during an onsite visit to an IRS Tax Processing Center, TIGTA observed multiple empty boxes that were intended to store up to 168 backup cartridges with hand written notes stating “sent for reformat 4-11-2013.” IRS personnel, however, had no idea where these backup cartridges were located because the microfilm contractor that would have received the backup units went out of business in 2018.

The lawmakers’ letter demanded answers about what has been done to rectify the problem, one of many administrative issues for the agency.

Lawmakers have also blasted the IRS for destroying about 30 million taxpayer documents.

Smith and Oversight Subcommittee Chairman David Schweikert, R-Ariz., sent a letter to Werfel in July saying the IRS has skirted oversight over the records and “willfully ignored” multiple information requests from Congress.

That inquiry began after a different TIGTA report showed the IRS destroyed 30 million taxpayer records in 2021. Those documents could have been used to help Americans defend themselves during audits, which President Joe Biden has pledged to ramp up to increase federal revenue.

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