The Treasury Inspector General for Tax Administration conducts annual audits and fulfils congressional requests for studies which review and evaluate the Internal Revenue Service (IRS) operations. Audit reports are issued in which the audit results and recommendations are made for improvements. This year’s recommendations will be for the IRS to find their tax files. Because they have lost millions of tax records, and they can’t be found. TIGTA reported that it found in this year’s audit significant deficiencies by the IRS in safeguarding and accounting for millions of tax records that contain sensitive taxpayer information.
TIGTA found (or not found) that the IRS could not locate thousands of microfilm cartridges containing millions of sensitive individual and business tax account refunds in various IRS locations. The watchdog said it found seven empty boxes at the IRS’s facility in Ogden, Utah, that should have contained as many as 168 microfilm cartridges, which hold up to 2,000 photographic images each, and that the IRS personnel there were unable to point to the location of the cartridges. The IRS also can’t find any cartridges containing tax records from fiscal year 2010 that were supposed to be transferred to its Kansas City processing center from its processing center in Fresno, Calif., when it shut down in 2021.
Finger pointing is everywhere in response to this report. IRS Wage and Investment Commissioner Kenneth C. Corbin said in a letter in response to TIGTA’s report that persistent underfunding of the agency had forced it to redirect employees responsible for the cartridge inventories to higher priorities. But TIGTA further said that agency personnel have not been doing required annual inventories of the microfilm cartridges and urged the IRS to better restrict access to the tax records. Corbin said the agency is still working through shipments of tax records to submission processing centers across the nation and that officials are “confident that as the backlog of non-tax documents is processed, the remaining cartridges will be incorporated.” Don’t hold your breath.
Great job by the TIGTA.
Today’s Fraud of The Day is based on article “IRS unable to locate millions of tax records, watchdog says” published by Politico on August 10, 2023
The IRS lost track of millions of sensitive individual and business tax records that should have been transferred from a closed agency facility in California and is also unable to locate thousands of records that were stored at a facility in Utah, according to a new watchdog report.
As part of a review of the IRS’ mandatory storage of old tax records in microfilm backup cartridges, the Treasury Inspector General for Tax Administration said in a report released Thursday that it found significant deficiencies in safeguarding and accounting for millions of tax records that contain sensitive taxpayer information.