Report Finds IRS Lost Millions Of Tax Documents

(TargetDailyNews.com) – According to a report from the Inspector General for Tax Administration, the Internal Revenue Service has lost track of millions of business and individual tax records that were kept at its storage facilities, Politico reported.

The agency maintains several facilities nationwide where tax records are kept, including microfilm cartridges with tax returns, additional filings, dispute forms, and evidence, all dating back decades.

An investigation by the inspector general’s office found seven boxes at two IRS storage facilities that should have held microfilm cartridges were empty. Since each box can hold 24 microfilm cartridges, the seven missing boxes could have contained as many as 168 cartridges.

According to the report, IRS personnel from the storage facility in Ogden, Utah did not know the current location of the missing cartridges. A single cartridge contains up to 2,000 images.

Additionally, the Kansas City, Missouri IRS storage facility was missing more than 4,500 cartridges containing individual tax information for 2019 and another 4,000 cartridges containing business tax information for 2018 and 2019. The facility was also unable to locate all of the cartridges with tax information from 2010 that were shipped from Fresno, California.

According to the IG report, the IRS has failed to perform annual inventories at storage facilities and the management was unable to say when the last mandated annual inventory took place.

The IG also found “security vulnerabilities” at IRS storage facilities with microfilm cartridges “not being safeguarded” to limit who can access the information. The investigators found boxes with microfilm cartridges being stored on “open shelving.”

The report warns that the missing taxpayer records include “key information” that could be exploited to commit identity theft and tax refund fraud.

The Inspector General recommended that the IRS improve its record retention. It also recommended that the IRS follow destruction protocols by destroying microfilm that is over 30 years old.

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