The Internal Revenue Service is running out of storage space for the copies of documents it stores on cases closed by its Office of Appeals, according to a report by the Treasury Department's Inspector General.

Because it closes more than 100,000 cases a year, the Appeals office is running out of storage space for the files and has begun shipping them to offsite storage for a fee. The Treasury Inspector General for Tax Administration said Appeals could save the staff time used to create the extra copies of files for processing additional cases and apply the money paid for offsite storage to fund additional staff positions.

"The Appeals closed case filing system is rapidly becoming unmanageable and losing the benefit of its original reason for creation," said TIGTA.

Due to space limitations, Appeals has begun to ship some files to a Federal Records Center to store them for a fee, but by shipping them to a third party, Appeals is losing the benefit of getting better control over the files and the convenience of having them onsite. Appeals began developing a paperless attachment program in 2003 to create and store electronic versions of the files but suspended the program in 2007 to evaluate technical alternatives.

TIGTA wants the chief of Appeals to conduct an analysis of how often and when Appeals files are accessed.
The report recommended that he should also destroy or return the existing Appeals files currently stored offsite and stop sending them out for storage. And TIGTA wants Appeals to conduct further planning, analysis and testing of the paperless attachment program.

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