IRS says no taxpayers will experience issues after agency destroys data of millions of taxpayers

The Internal Revenue Service recently made the decision to destroy the data of millions of taxpayers in an effort to clear digital storage space, but the agency insists the move will not result in any consequences or difficulties for taxpayers.

An audit by the Treasury Inspector General for Tax Administration found the IRS had dumped an estimated 30 million tax filing documents for millions of individual filers from the 2020 tax year. The IRS claims the data was only deleted from its system because of storage issues, and that the data deletion will not interfere with the individuals’ taxes.

“We processed 3.2 billion information returns in 2020. Information returns are not tax returns, and they are documents submitted to the IRS by third-party payors, not taxpayers,” the IRS said in its statement. “There were no negative taxpayer consequences as a result of this action. Taxpayers or payers have not been and will not be subject to penalties resulting from this action.”

The IRS added that the decision to delete the data stems from outdated technology at the agency.

The incident has caused some backlash, and even calls for the dismissal of IRS commissioner Charles Rettig. Congressman Bill Pascrell (D-NJ) is one of the voices on Capitol Hill calling for Rettig’s termination.

“The IRS is vital to public confidence in our nation and its Trump-appointed leader has failed,” Pascrell said, adding that Rettig’s decision had “plummeted” public confidence in the IRS. “The manner by which we are learning about the destruction of unprocessed paperwork is just the latest example of the lackadaisical attitude from Mr. Rettig,” Pascrell said.

The IRS says the practice of deleting the documents would not be repeated for next tax season, but tax professionals across the country have expressed their horror at the decision to dump tax data. “The IRS’ recent statement provided some of the answers, but American taxpayers deserve to know why this decision was made and how it might impact them,” said Ed Karl, vice president of the American Institute of CPAs.