The IRS Fell Behind So Its Employees Destroyed 30 Million Tax Documents in an Effort to Catch Up

An audit of the Internal Revenue Service found staffers destroyed 30 million taxpayer documents, as they faced a massive backlog. However, the tax collection agency says no taxpayers were adversely affected by the destruction.

“This audit was initiated because the IRS’s continued inability to process backlogs of paper-filed tax returns contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” says the TIGTA report signed by Michael E. McKenney, the deputy inspector general for audit. “The IRS uses these documents to conduct post-processing compliance matches to identify taxpayers who do not accurately report their income.”
The IRS issued a public statement last week regarding the inspector general report first released on May 4.

President Joe Biden is asking for $80 billion to help the IRS crack down on tax avoidance from wealthy Americans and big corporations.
The proposal seeks a boost in enforcement staffing, technology and additional bank reporting, measures that may generate an estimated $700 billion in tax revenue over the next decade.

However, some financial experts say the plan may spark more audits for certain small businesses.