GOP fires warning shot at IRS: Destruction of taxpayer filings is ‘ripe for congressional oversight'
The IRS destroyed 30 million paper-filed taxpayer documents in early 2021, claiming 'software limitations'
Lawmakers press IRS on why 30 million taxpayer documents were destroyed
National Taxpayers Union Executive Vice President Brandon Arnold examines the potential fallout for taxpayers following a head-scratching move by the IRS on 'The Evening Edit.'
Republicans on the House Ways and Means Committee asked the IRS this week to keep all documents related to its 2021 decision to destroy millions of taxpayer filings, and indicated a deeper congressional inquiry is coming if Republicans take control of the House.
During the first few months of the Biden administration, the IRS destroyed 30 million paper-filed "information returns," which must be filed by small business and others to inform the IRS of various transactions. The IRS claimed that "software limitations" prevented it from processing those returns, and a decision was made to destroy them.
The IRS insisted that no taxpayers would be penalized as a result of its decision, but tax professionals were outraged at the decision to wipe out documents that took time and expense to file, and Republicans demanded more information about what happened.
IRS SETS HIGHER TAX BRACKETS, STANDARD DEDUCTION FOR 2023 AS INFLATION RAGES
Charles P. Rettig, commissioner of the Internal Revenue Service, is under pressure to explain why millions of taxpayer files were destroyed. (Tom Williams / POOL / AFP via Getty Images/Photo Illustration)
The IRS so far has refused to hand over the decision memorandum that outlined the rationale for destroying the paper files, and Republicans this week asked for it in a letter Thursday to IRS commissioner Charles P. Rettig obtained by FOX Business.
"Committee Republicans have repeatedly sought this document and information," wrote Ways and Means Ranking Member Kevin Brady, R-Texas, and Oversight Subcommittee Ranking Member Tom Rice, R-S.C. "The Administration’s refusal to respond to the Committee, engage in a substantive discussion with staff about the request, and ultimately deny access to the decision memorandum obstructs the Congress’ important role to conduct oversight."
SEN. MARSHALL INTRODUCES BILLS DESIGNED TO PREVENT IRS OVERREACH FOLLOWING AGENCY EXPANSION
Ways and Means Committee Ranking Member Kevin Brady, R-Texas, has asked the IRS to preserve all documents related to its decision to destroy millions of taxpayer files. (Drew Angerer/Getty Images / Getty Images)
While the IRS has said it destroyed the documents because of software limitations, Republicans have argued that its failure to hand over the decision memo is raising suspicions that there may be other factors at play. In May of this year, the IRS told Republicans that releasing the decision memo would pose a "significant risk to the agency," a position that Brady and Rice rejected this week.
"This blanket refusal from the IRS based on a perceived risk to the agency is unacceptable," they wrote. "Congressional oversight does not stop whenever the executive branch identifies a perceived risk."
Just weeks ago, Democrats on the Ways and Means Committee rejected a GOP resolution of inquiry (ROI) that would have acted as a formal request from Congress for the decision memo. But Brady and Rice indicated in their letter that Republicans would keep pressing the issue next year if they win a majority in the House in the midterm election.
YELLEN OUTLINES PLANNED CHANGES TO THE IRS IN $80B OVERHAUL
President Biden's IRS destroyed 30 million taxpayer documents in March 2021, a decision Republicans have vowed to investigate. (Chip Somodevilla/Getty Images | Alex Wong/Getty Images / Getty Images)
"Although Democrats voted to unfavorably report the ROI, Republicans remain committed to our duty to conduct oversight of the agency’s processing and destruction of the paper-filed returns," they wrote.
"The decision to destroy information returns diligently prepared by millions of American taxpayers is ripe for congressional oversight," they added.
CLICK HERE TO GET THE FOX BUSINESS APP
The letter asked the IRS to collect and preserve all records related to the destruction of taxpayer files, and asked the IRS to respond to the letter by Nov. 3.
The IRS declined to respond to a request for comment for this story. In May, the IRS said it processed 3.2 billion information returns in 2020, and that just 1% of those returns were destroyed. The IRS said it priorized getting refunds to taxpayers over inputting a relatively small amount of information that was submitted on paper, and said that decision reflects the "significant issues posed by antiquated IRS technology."