IRS can't find millions of tax records after botched transfer, IG says

The Internal Revenue Service can't find millions of tax records from a closed California location and thousands more from a Utah facility, according to the Treasury Inspector General for Tax Administration.

The agency stores old tax records in microfilm cartridges that can contain as many as 2,000 photos each. The IG noted that the tax information in such cartridges "is key information that can be used to commit tax refund fraud identity theft." Cartridges containing individual tax returns must be destroyed after 30 years while those containing business tax records must be destroyed after 75.

"Significant deficiencies exist in the IRS’s accounting for microfilm backup cartridges. Deficiencies result in the inability of the IRS to account for thousands of microfilm cartridges containing millions of sensitive business and individual tax account records," the report stated.

Released this week, the report indicated that the watchdog could not locate 168 microfilm cartridges from an Ogden, Utah facility and was further unable to locate any of the cartridges that ought to have been transferred from Fresno, Calif., to Kansas City, Mo. In Ogden, they did locate seven empty boxes that could have stored the missing cartridges.

In total, the watchdog could not locate roughly 4,500 cartridges from 2019 and more than 4,000 from 2018 at the Kansas City facility that should have been transferred from Fresno.

"Our review found that required annual inventories of microfilm cartridges maintained at the Austin, Kansas City, and Ogden Tax Processing Centers have not been performed," the watchdog concluded. The report recommended that the IRS properly conduct its inventories and tighten security related to the storage of and access to microfilm cartridges.

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.