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The IRS insists that the destruction of taxpayers’ data will not affect taxpayers

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The IRS insists that the destruction of taxpayers' data will not affect taxpayers

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The IRS decision to destroy the data of millions of taxpayers will not affect the files, the agency said in a statement on Thursday.

It is estimated that in March 2021, the IRS issued about 30 million so-called paper declarations with information, according to an audit conducted by the Inspector General of the Treasury of the Tax Administration.

The news is there caused anger in the tax communitymany are concerned about the agency’s ability to verify revenue by causing more error messages, especially with limited ways to contact the IRS.

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“In 2020, we processed 3.2 billion information declarations. Information declarations are not tax returns, and these are documents submitted to the Tax Inspectorate by taxpayers, not taxpayers, ”the IRS said in a statement.

The agency said 99% of the returns had already been processed and the remaining 1% had been destroyed due to “software constraints”, making room for the 2021 filing season.

“There were no negative consequences for taxpayers as a result of this action. Taxpayers or taxpayers have not been and will not be subject to penalties as a result of this action,” the agency said.

The agency said the situation reflected “significant problems with outdated IRS technology”. In 2020, the IRS gave priority to outstanding applications to return money and other benefits related to Covid-19, rather than processing less than 1% of paper returns – mostly Form 1099.

Systemic restrictions require the IRS to process paper forms by the end of the calendar year in which they were received, the agency said.

“Failure to process these returns did not affect the filing of the original return by taxpayers, as taxpayers received their own copy to file an accurate return,” the IRS said.

“The tax inspection plans to process all paper information received in 2021 and 2022,” the agency added.

However, MP Bill Pascrell Jr., DN.J., chairman of the House Subcommittee’s oversight committee, demanded the president on Friday. Joe Biden replace IRS Commissioner Charles Retig over the incident.

“The tax inspectorate is vital to public confidence in our country, and its Trump-appointed leader has failed,” Pascrel said, pointing to a “drop in public confidence” in the tax system.

“The way we learn about the destruction of unprocessed documents is just the latest example of Mr. Retig’s indecent attitude,” he added.

– Dan Mangan from CNBC contributed to this report

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