Posted on 05/13/2022 10:45:59 AM PDT by Red Badger
The IRS destroyed data for an estimated 30 million filers in March 2021, according to the Treasury Inspector General for Tax Administration.
The decision, prompted by a backlog of paper filings, has sparked anger in the tax community.
“It just further damages the IRS’ reputation in the business community and in the public,” said Larry Harris, director of tax services at Parsec Financial.
An audit by the Treasury Inspector General for Tax Administration revealed the IRS has tossed data for millions of payers, sparking anger from the tax community.
The material, known as paper-filed information returns in accounting parlance, is sent yearly by employers and financial institutions, and covers taxable activity, such as W-2 forms, with copies sent to taxpayers and the IRS.
“The continued inability to process backlogs of paper-filed tax returns contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” according to the report.
The IRS backlog, created by years of budget cuts, understaffing, pandemic-related office closures and added duties, is expected to clear by December, according to Commissioner Charles Rettig.
While the report doesn’t specify which information returns the agency chucked, the news has triggered angry responses from tax professionals, particularly after another difficult filing season.
“I was horrified when I read the report describing the destruction of paper-filed information returns,” said Phyllis Jo Kubey, a New York-based enrolled agent and president of the New York State Society of Enrolled Agents.
Missing information returns can cause a “mismatch” at the IRS, delaying refunds because the agency can’t verify details on a taxpayer’s returns, she explained.
While the eventual consequences of the decision are unknown, tax professionals have long complained about the stream of automated IRS notices, with limited options to reach the agency.
IRS steps up efforts to hire workers to process taxes
“If they’re not putting those into the system, there’s going to be discrepancies, which means potential notices that are sent out,” said Dan Herron, a San Luis Obispo, California-based certified financial planner and CPA with Elemental Wealth Advisors.
Although the IRS halted more than a dozen types of automated notices in February, Herron says the constant correspondence is still creating headaches for taxpayers and advisors.
“There were no negative taxpayer consequences as a result of this action,” the IRS said in a statement on Thursday. “Taxpayers or payers have not been and will not be subject to penalties resulting from this action.”
Brian Streig, a CPA with Calhoun, Thomson and Matza LLP in Austin, Texas, said the news was a “break of our trust,” pointing to the burden on the business community.
“Small businesses stress out every year in January trying to accurately prepare these informational returns and get them filed on time,” he said. “To see the IRS just destroy these is almost like the IRS admitting they don’t really care.”
“It just further damages the IRS’ reputation in the business community and in the public,” he added.
I can’t file my taxes next year — I destroyed the data on 1 filer (me). But it’s just 1 and not 30 million, so I guess it’s no big deal.
I paper filed in January 2022, this year, for tax year 2019.
I just submitted the online, send to my US mail request, for the status.
I.R.S. still claims no return filed.
They are pushing people to electronic filing, and I beleive the mishandling of paper filings is designed to encourage that.
And yet if WE filed an incomplete form, all hell would break loose and we’d be fined.
So if they are going to destroy the records, then how do they differentiate between people who filed wrong and people who filed correctly and are not supposed to be penalized?
I. DON’T. TRUST. THEM.
i paper filed with certified mail, and the postcards came back.
glad i used certified mail...
Probably to make sure Joe and Hunter’s tax return data can never be recovered.
“prompted by a backlog of paper filings“
More like prompted by laziness and incompetence, corruption and irresponsibility. … Not more like.. 100% like.
The IRS sent me an overdue tax notification of $472 for covid relief funds i never received in 2020.
6 months prior to receiving this notice i received a first notice telling me I had not yet cashed my covid relief check of $472. I called and they said a replacement check was on the way- despite the fact I told them i did not want it.
Never received the replacement check. I was on the phone with the IRS for more than two hours helping them connect the dots. I finally got a letter telling me i owed them nothing since no check was ever cashed. On my 2021 taxes I deducted $750 ($375 and hour) for the time i spent on the phone with them- figuring out their problem- as a tax preparation deduction.
Just another step toward the U.S. becoming a Banana Republic.
The IRS used to have a rule that said they did not have to accept proof you had mailed, and they had received, a tax return, unless the tax payer sent it registered mail. Has that changed?
Their 1200 baud modems haven’t downloaded it yet.....................
Ever wonder if the intended purpose is to get rid of Xiden family tax records to protect against future opposition Congress investigations like have been done with Trump?
The only thing that makes me question that motive is the fact that the GOP doesn’t have a history of having the political balls to extract payback.
The GOP doesn’t have a history of having balls..............period...............
Would the be horrified if 30 million filers were destroyed?
My refund, based on a retroactive court finding of general tax law, has not been see since last year. It was filed early last year and I got 60 day extension notices from IRS for a few months telling me to be patient then nothing for the last many months.
Try not paying your taxes though.
Hate is not a sufficient word.
So what types of fradulent returns that were filed could be now harder to be detected with those info returns destroyed? Bueller?
It is impossible to harm the reputation of the IRS.
You can bet it’s something like that. Destroy millions of records to delete some buried among the others Classic
If they don’t have the paper with your signature on it then they cannot hardly expect to win a case in court where they say ‘your return is wrong/fraudulent.’
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