Within months after the inauguration of President Joe Biden, the Internal Revenue Service destroyed an estimated 30 million paper-filed information returns.
“Management subsequently stated they estimated that approximately 30 million documents were destroyed on or around March 19, 2021,” the Treasury Inspector General for Tax Administration (TIGTA) announced in a report. He noted the information was learned during a walk-through of the IRS Ogden Tax Processing Center.
The large number of documents were reportedly destroyed, in part, to relieve a backlog of paper documents. The TIGTA report skims over the destroyed returns other than noting Form 1099‑MISC was an example of a destroyed document.
“Information returns are important because they typically serve as a third-party check to ensure taxpayers are accurately reporting their income and deductions,” said Sen. Mike Crapo (R-ID). “These information returns are so important, that a taxpayer who files an information return late or with inaccuracies is subject to penalties.”
The 30 million destroyed returns represented just one percent of the total information returns filed, and they were destroyed due to a software limitation and to make room for 2021 tax filing season documents, according to Crapo. The IRS claims “[t]here were no negative taxpayer consequences as a result of this action,” and taxpayers will not be subject to penalties resulting from the IRS’s actions, Crapo noted in a weekly column to constituents.
House Republicans on the Ways and Means Committee this week directed the IRS to retain all documents related to the agency’s decision to destroy the documents.
IRS officials have declined to provide the decision memorandum that outlined the agency rationale for destroying the paper files. Republicans asked for it in a letter Thursday to IRS commissioner Charles P. Rettig, according to a Fox News report.
“Committee Republicans have repeatedly sought this document and information,” wrote Ways and Means Ranking Member Kevin Brady, R-Texas, and Oversight Subcommittee Ranking Member Tom Rice, R-S.C. “The Administration’s refusal to respond to the Committee, engage in a substantive discussion with staff about the request, and ultimately deny access to the decision memorandum obstructs the Congress’ important role to conduct oversight.”
A deeper congressional inquiry from the Ways and Means Committee is coming if Republicans take control of the House, according to the Fox report.
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