The Internal Revenue Service is not doing a good job of managing its paper case files, according to a newly released report.

The Government Accountability Office found that the IRS does not have an effective process to ensure that paper case files can be located within the requesters' time frames. The missing case files can result in lost revenue, create unnecessary tax burdens, and make the case files unavailable for quality review groups and advisory groups.

The report found that in several District Court cases, the IRS lost over $40,000 in revenue per case because it could not locate the files. In two prior GAO audits, the IRS could not locate 10 to 14 percent of the case files requested. In one audit by the Treasury Inspector General for Tax Administration, the IRS could not provide about 19 percent of the case files requested. The missing files can also hinder congressional oversight.

"The findings are very troubling," said Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Finance Committee, in a statement. "The GAO and TIGTA are finding that the IRS cannot locate between 10 percent and 19 percent of paper files that are requested ... The GAO's findings should be an embarrassment to the agency."

The GAO recommended that the IRS track the number of files that cannot be located and the reasons why, and develop performance measures. The IRS agreed it needs to review its program and will form a cross-functional group to identify improvements.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access