Watchdog: IRS Can't Locate Millions of Tax Records

The Treasury Inspector General for Tax Administration (TIGTA) said in a report released Tuesday that the IRS has lost track of millions of sensitive tax records.

According to the Department of Treasury watchdog office, most of the information was supposed to be transferred from a closed submission processing center in California, with thousands of others lost from another in Utah.

Microfilm cartridges are the mandatory means by which the old records are stored. However, none of fiscal year 2010's traveling from the California facility to one in Missouri appeared to have made it.

The TIGTA also revealed it found seven empty boxes at the Utah facility that were intended to keep as many as 168 microfilm cartridges, with IRS personnel unable to locate them.

While the agency is required to do annual inventories of the microfilm cartridges, the watchdog said it did not find that the personnel actually were.

Some of that same critical data, which can be used to commit identity theft in the wrong hands, was also discovered on open shelving in the middle of a large warehouse at the Utah facility.

Kenneth C. Corbin, commissioner of the IRS's wage and investment division, defended the agency in a letter responding to the TIGTA report. He argued that persistent underfunding was the root cause of the issues.

The executive further pledged that the IRS was still working through shipments of the tax records and is "confident that as the backlog of non-tax documents is processed, the remaining cartridges will be incorporated."

"We are taking action on the report recommendations to complete inventories of the microfilm media stored at the SPCs and updating procedures to ensure the inventory records are contemporaneously maintained and reviewed annually," Corbin wrote.

• Watchdog: IRS Spent $10M on Weapons, Ammo Since 2020
• IRS Warns Against Summer E-mail Scam 'Wave'