North Charlotte Today

WASHINGTON, D.C. – Senator Thom Tillis and all Senate Finance Committee Republicans sent a letter to Internal Revenue Service (IRS) Commissioner Werfel demanding answersfollowing the release of new information demonstrating that the IRS’s March 2021 decision to destroy 30 million unprocessed 2019 taxpayer information returns has indisputably harmed taxpayers.

“Recently reported information demonstrates the Internal Revenue Service’s (IRS) March 2021 decision to destroy 30 million unprocessed tax year 2019 taxpayer information returns has indisputably harmed taxpayers,” said Senator Tillis.

“For example, one of the recent reports provides troubling evidence of specific taxpayers who were directly harmed by the destruction of these information returns. For these taxpayers, the IRS denied their earned income tax credit (EITC) claim based upon the mistaken belief that the taxpayers had insufficient earned income,” Senator Tillis continued. 

“[However], it appears that ‘relief’ was not provided by the IRS to at least some, and potentially thousands of, taxpayers who claimed the EITC in 2019; the destruction of these unprocessed information returns was unnecessary and its direct and indirect harm is disproportionate to whatever storage costs the IRS would have incurred; to date, the IRS is systemically denying/challenging EITC claims that rely upon income reported by these destroyed information returns rather than evaluating documentation in each case; and the IRS has not responded to diverse substantive issues arising from this episode,” Senator Tillis concluded.

In addition to the unanswered questions from a previous request for information in May 2022, the senators requested new information from the IRS on the impact the document destruction had on taxpayers, especially low-income taxpayers who claimed the earned income tax credit (EITC).

Read the full letterHERE.

Background:

According to the Treasury Inspector General for Tax Administration (TIGTA), in March 2021, the IRS intentionally destroyed 30 million unprocessed taxpayer information returns due to its paper processing backlog. While the IRS claimed there were no negative consequences as a result of this action, Finance Committee Republicans raised concerns with the agency, and asked about the potential ramifications for taxpayers. 

Now, recent news reports suggest the IRS’s destruction of information likely led to several negative consequences, including the unwarranted and onerous examination of many hardworking taxpayers and denial of tax benefits they are entitled to, in some cases for multiple years. These persons would not be helped by future changes to IRS enforcement efforts, including reducing enforcement with respect to returns claiming the EITC.  

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WASHINGTON, D.C - Senator Thom Tillis and all Senate Finance Committee Republicans are demanding answers from the Internal Revenue Service (IRS) following the revelation that the destruction of 30 million unprocessed taxpayer information returns in March 2021 has caused harm to taxpayers. The senators have sent a letter to IRS Commissioner Werfel expressing their concerns.

"Recently reported information demonstrates the Internal Revenue Service’s (IRS) March 2021 decision to destroy 30 million unprocessed tax year 2019 taxpayer information returns has indisputably harmed taxpayers," said Senator Tillis.

The destruction of these information returns has had specific consequences for some taxpayers, as evidenced by recent reports. The IRS denied their earned income tax credit (EITC) claim based on the mistaken belief that the taxpayers had insufficient earned income," Senator Tillis continued.

"It appears that 'relief' was not provided by the IRS to at least some, and potentially thousands of, taxpayers who claimed the EITC in 2019. The destruction of these unprocessed information returns was unnecessary, and its direct and indirect harm outweighs any storage costs the IRS would have incurred. To date, the IRS is systematically denying/challenging EITC claims that rely upon income reported by these destroyed information returns instead of evaluating documentation in each case. Additionally, the IRS has not addressed the various substantive issues arising from this episode," Senator Tillis concluded.

In addition to seeking answers to unanswered questions from a previous information request in May 2022, the senators have requested new information from the IRS regarding the impact of the document destruction on taxpayers, particularly low-income taxpayers who claimed the EITC.

For more information, read the full letter here.

Background:

The Treasury Inspector General for Tax Administration (TIGTA) reported that in March 2021, the IRS intentionally destroyed 30 million unprocessed taxpayer information returns due to a backlog in paper processing. While the IRS claimed there were no negative consequences, the Senate Finance Committee Republicans expressed concerns about the potential ramifications for taxpayers.

Recent news reports suggest that the destruction of information by the IRS has led to several negative consequences, including the unjustified and burdensome scrutiny of hardworking taxpayers and the denial of entitled tax benefits, in some cases spanning multiple years. Measures to reduce IRS enforcement efforts, including enforcement related to EITC claims, would not aid these individuals.

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