Audit of IRS Discovers Over 30 Million Tax Documents Destroyed

Audit of IRS Discovers Over 30 Million Tax Documents Destroyed

IRS Auditor Blows Everyone Away With TOTALLY Unexpected Findings

( – If there’s one thing many Americans fear or dread, it’s the possibility of facing an IRS audit. However, the tables recently flipped on the agency when it underwent an audit of its own — and what investigators found is nothing short of shocking. The main question is how will the results affect taxpayers?

TIGTA Report

On May 4, the Treasury Inspector General for Tax Administration (TIGTA) released its audit report on the IRS. In it, they acknowledged the agency has taken steps to improve its e-filing capabilities, but it also revealed the IRS has a long way to go. In particular, the report noted the IRS destroyed approximately “30 million paper-filed information return documents” in March 2021.

Most of these are backlogs, exacerbated by the pandemic. The IRS made sure to clarify the documents destroyed were “information return documents,” and not actual tax returns.

What Does This Mean for Taxpayers?

The IRS said, “Taxpayers or payers have not been and will not be subject to penalties resulting from this action.” Tax experts aren’t so sure though. These missing documents could cause discrepancies or a “mismatch” in the system.

The referenced information documents typically include 1099s or W-2 forms, which the IRS uses to verify the details on any given tax return. Verification is necessary to issue returns. Failure to come up with a match can result in a delay in processing a return and can trigger an automated notice, which then gets mailed to the taxpayer.

To combat this, the IRS said it has halted the notifications as of February 2022, but the effects of the decision to destroy those documents remains yet to be seen. At the very least, it may lead to a damaged reputation, according to Larry Harris, a Certified Financial Planner at a firm in Asheville, North Carolina.

TIGTA Recommendations

To help the IRS avoid such drastic measures in the future, the TIGTA report included three recommendations to help improve efficiency at the beleaguered agency.

  1. Develop a strategy to prioritize drafting all forms for e-filing.
  2. Develop procedures to help identify and solve the issue of corporate filers who fail to comply.
  3. Develop procedures and processes to accurately assess fines against those non-compliant corporate filers.

The IRS rejected two of these suggestions right off the bat. The only one the agency agreed to was to ensure all forms were made ready for e-filing. At the very least, this would significantly cut back on the amount of actual paper sent to the offices.

What do you think about the IRS’ actions? Will there really be no consequence to the public?

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