IRS loses millions of taxpayer records, says watchdog.

The IRS‌ Lost Millions of Sensitive Tax Records, Putting Individuals and Businesses at Risk

According to a new watchdog report, the Internal Revenue ⁢Service (IRS) has lost millions of sensitive tax ​records belonging‍ to individuals and businesses. This alarming revelation raises concerns about ⁤the⁢ security and protection of taxpayers’ ‌information.

Failure⁣ to Safeguard Tax Information

The Treasury Inspector General for‍ Tax Administration recently released a report highlighting the IRS’s inadequate ⁤safeguarding ⁣of tax information during shipping between processing centers. Shockingly, the report reveals that the IRS⁣ cannot ‍locate records that were supposed‌ to be transferred from California to Kansas City and ⁤is also missing thousands of ‍records stored in ‍Utah.

The⁢ watchdog report states, “The​ IRS is unable to identify, notify, and/or offer protection to taxpayers when sensitive tax information is lost in the mail and at risk for potential identity theft.”

Missing Records ⁣and Lack‍ of Documentation

The report further details the discovery of seven empty boxes‍ in Utah that ⁢should have contained around 170 microfilm cartridges, each capable ⁣of holding up to‍ 2,000 images. Additionally, records from the 2010 fiscal year‍ that were supposed to be transferred from California to Kansas City could not be located. The‍ lack ‌of documentation identifying the affected taxpayers⁤ hinders the IRS’s ability to notify and protect them.

Underfunding and⁢ Proposed Solutions

The IRS attributes ⁢this problem to underfunding, claiming that it has been forced to reassign employees responsible for inventories to other tasks. ⁣However, the agency expresses confidence ⁢that as the backlog of non-tax documents is processed, the‍ missing ⁤records will be⁣ incorporated.

To address these issues, President Joe‌ Biden’s Inflation Reduction Act allocated $80 ‍billion in new funding for the IRS over the next ten years. This ⁢funding will enable​ the IRS to hire additional​ agents and invest in⁢ cutting-edge technology, data, and analytics to operate⁤ more effectively.

Recurring Criticisms and Concerns

This is not the first time the IRS has faced criticism for mishandling⁤ sensitive tax information. In 2021, the agency destroyed 30 million⁤ paper tax⁢ returns, causing‍ alarm among tax experts. Additionally, GOP lawmakers raised concerns after ProPublica published an exposé containing information from thousands of tax returns belonging to wealthy Americans.