BREAKING: IRS Destroyed 30 Million Documents!

The IRS shredded tax data for millions of filers, according to the agency’s own watchdog.

The destruction of 30 million paper tax returns enraged tax professionals and prompted a key Democrat lawmaker to call for the firing of the agency’s chief.

The revelation that the IRS quietly disposed of around 30 million unprocessed tax documents is the latest blow to the reputation of an agency that has long struggled with its public perception. https://t.co/45e1I3fsg3

— Bloomberg Tax (@tax) May 13, 2022

House Ways and Means Committee member Rep. Bill Pascrell is calling on President Joe Biden to replace the head of the Internal Revenue Service Charles Rettig after an audit showed the agency destroyed data relating to some 30 million paper tax returns. https://t.co/14cMSi3J83

— NEWSMAX (@NEWSMAX) May 14, 2022

A report from the Department of Treasury’s Inspector General for Tax Administration revealed the destroyed data due to huge backlogs.

The report said bureaucrats gave up on working through the paper-filed information return documents and trashed them last year.

“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,” the report stated.

The #IRS decided to destroy an estimated 30 million paper-filed information return documents in March 2021 because of its inability to process its backlog of paper #tax returns, according to a new report. https://t.co/8o5EhZrmy2

— Accounting Today (@AccountingToday) May 9, 2022

The Daily Wire reported:

The documents, described as paper-filed information returns, are filed annually by employers and financial institutions, and include copies of the W-2 forms sent to taxpayers. The paperwork is used to verify the details on individual taxpayers’ returns, and without it, the IRS could see more delays and mixups, they predicted.

IRS Commissioner Charles Rettig blamed the backlog on budget cuts and the COVID pandemic, which resulted in offices being closed for long stretches.

“There were no negative taxpayer consequences as a result of this action,” the IRS said in a statement. “Taxpayers or payers have not been and will not be subject to penalties resulting from this action.”

Rep. Bill Pascrell, (D-NJ), called on the Biden administration to fire Rettig over the scandal.

“The IRS is vital to public confidence in our nation and its Trump-appointed leader has failed,” said Pascrell, chair of the House Ways and Means Committee’s oversight subcommittee.

Tax professionals were shocked that the agency dumped the massive trove of documents.

“I was horrified when I read the report describing the destruction of paper-filed information returns,” Phyllis Jo Kubey, president of the New York State Society of Enrolled Agents, told CNBC.

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.

“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.