Report Regarding IRS Performance

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New Report Regarding IRS Performance

The TIGTA has released a new report on the IRS’ performance in storing business and individual tax account information. The report covers the fiscal year 2022 and highlights major challenges faced by the IRS.

Why TIGTA Did This Report?

The IRS is required to keep records of both individuals and businesses’ tax returns. The IRS uses microfilm cartridges to store photographic records of this sensitive tax documents. In addition, the IRS need to ensure that these records:

  • are protecting the rights of the Federal Government and the taxpayers,
  • are available to conduct business,
  • document IRS activities in a proper manner.

What TIGTA Found Out?

TIGTA findings:

  • according to the report, the TIGTA found that the IRS does not account, safeguard or controls in a proper manner the microfilm cartridges,
  • the IRS has not been conducting the required annual inventories,
  • the IRS did not adequately safeguard the sensitive taxpayer information stored on microfilm cartridges,
  • requests for tax account information stored on microfilm cartridges made by IRS employees working in various operating division functional areas were fulfilled inconsistently and incompletely,
  • the IRS did not adhere to the requirements for record retention and destruction; IRS does not have established procedures to identify and destroy microfilm cartridges within the required time frames for destruction.

Conclusions

The report concludes that the IRS needs to prioritize its resources and activities to address the most significant risks and opportunities for improving tax administration and taxpayer service. The report provides 13 recommendations for the IRS, among which some recommendations were to:

  • properly maintain request logs,
  • properly secure microfilm cartridges,
  • conduct a detailed inventory of the microfilm cartridges,
  • properly destroy microfilm cartridges with a processing year beyond 30 years.

The IRS faces many challenges and you can avoid a lot of IRS hassle if you have your books and tax records in order. If you need tax and accounting help with your business, we are here to help. We serve small businesses and real estate investors. Click here to schedule an appointment.

This material is for informational purposes only. It does not constitute tax, legal or accounting advice.