U.S. Rep. Vern Buchanan (R-FL) convened a subcommittee hearing on Tuesday that explored findings that IRS policies on the retention of electronic records don’t comply with federal requirements that the records be retrievable and usable.
Buchanan, the chairman of the House Ways and Means Subcommittee on Oversight, called the hearing in response to a Treasury Inspector General for Tax Administration (TIGTA) report that found lacking IRS electronic record procedures had impeded congressional oversight and taxpayer requests for information.
“The production of IRS emails currently relies on the IRS’s ability to search thousands of employee hard drives; or, alternatively, each employee’s ability and willingness to print and file important emails,” Buchanan said. “Neither system is sustainable or reliable enough to satisfy the voluminous record requests received by the IRS.”
During the hearing, U.S. Rep. Jackie Walorski (R-IN) raised questions about IRS efforts to invest $12 million in a new record retention system, a purchase that was later challenged through a bid protest because the system wasn’t included in a blanket purchase agreement.
“Taxpayers spent $12 million on software that was never used,” Walorski said, “… basically, what it boils down to is you pick from something not on the list, taxpayers get stuck with a $12 million bill, and this isn’t used. So what safeguards are in place from that experience to say, ‘Oh my gosh, we made a mistake, we’re never going to do this again.’ Because in my district and to fellow Hoosiers in the state of Indiana, $12 million is a lot of money. Especially for something not used, sitting on a shelf.”
Jeffrey Tribiano, the deputy commissioner for operations and support at the IRS, responded that a mechanism is now in place in the procurement office that requires secondary review of every blanket purchase agreement schedule before purchases can be made.
Buchanan noted that the IRS has changed its record retention policies three times since 2013, creating confusion. And the IRS still lacks a basic email system that can automatically archive employee emails.
“These issues ultimately reduce transparency, open the agency to exposure in civil lawsuits, and inhibit congressional oversight of the IRS,” Buchanan said. “They also create a double standard whereby the IRS is not required to maintain basic records in the same way that an average American citizen must. No individual or small business could do the same and not be subject to punitive actions by the IRS. Furthermore, this issue has been raised repeatedly by Congress to the IRS for years, without a permanent solution.”
Edward Killen, the director of privacy, governmental liaison and disclosure at the IRS, testified that efforts are “squarely focused on making improvements because we realize that taxpayers have a right to request information of their government, and we’re committed to being able to provide that information.”
The IRS processed 244 million tax returns in 2016 alone.
“I believe members on both sides of the aisle want to ensure IRS has the authority and resources it needs to administer the code,” Buchanan concluded. “However, in return, we need to see stronger efforts by the IRS to ensure that records are properly retained and easily retrievable. We would also like to see the IRS work to improve how it procures and implements its IT systems.”