Civil Rights and Civil Liberties Subcommittee Ranking Member Nancy Mace (R-S.C.) and House Committee on Oversight and Reform Ranking Member James Comer (R-Ky.) today sent a letter to Internal Revenue Service (IRS) Commissioner Charles Rettig raising concerns about the IRS destroying data for an estimated 30 million filers in March 2021. The lawmakers request all documents and communications about the IRS’ mass destruction of paper-filed return documents, the legal authority the agency relied upon to destroy these documents, and the IRS’ plan to integrate the recommendations from the Inspector General’s audit.
“Committee on Oversight and Reform Republicans are reviewing recent allegations of potential misconduct by the Internal Revenue Service (IRS),” wrote the Republican lawmakers. “The intentional decision to destroy these documents – which the IRS would need to ensure taxpayers are accurately reporting their income – was based in part on ‘the IRS’s continued inability to process backlogs of paper-filed tax returns…’ Indeed, it is not lost on Committee Republicans that Congress appropriated an unprecedented half a billion dollar increase in IRS funding in FY2022. We write to request documents and information to understand why the IRS would destroy records needed for post-processing compliance reviews.”
According to a recent audit administered by the Treasury Inspector General for Tax Administration (TIGTA), the IRS destroyed an estimated 30 million paper-filed information return documents in March 2021 instead of digitizing these documents. These information return documents include Forms W-2, 1099 and 1098 which are used by the IRS to verify taxpayers’ information such as income. The decision was made because of the massive backlog of unprocessed paper-filed tax returns. Oversight Committee Republicans previously raised concern about the IRS’ growing backlog due in part to the agency’s outdated software and federal employees not returning to the office.
“Committee Republicans are concerned that the destruction of these documents might slowdown already inefficient processing procedures and hurt American taxpayers left unaware that the IRS destroyed documents already entrusted into its care. Indeed, it appears that the IRS may now demand that taxpayers provide duplicate copies of information previously destroyed by the IRS. We are also troubled by TIGTA findings that efforts by the IRS to modernize paper filing processing has failed and are skeptical that the IRS will follow through with TIGTA recommendations to alleviate these problems, particularly as ‘IRS management did not take sufficient actions to address recommendations included in [TIGTA’s] prior review,’” continued the Republican lawmakers.
Read the full letter to Commissioner Rettig here.