The Internal Revenue Service improperly withheld information from people requesting it under the Freedom of Information Act, according to a new government report.
The report, from the Treasury Inspector General for Tax Administration, reviewed a statistically valid sample of 65 information requests from a population of 2,809 FOIA/Privacy Act information requests and found eight (or about 12.3 percent) for which the IRS improperly withheld information from the requestors.
The IRS also improperly withheld information for four (or 7.3 percent) of the 55 information requests under Section 6103 of the Tax Code that TIGTA reviewed. Although the IRS properly released thousands of pages from these documents, TIGTA acknowledged, taxpayer rights still may have been violated because some information was erroneously withheld. TIGTA is required to conduct periodic audits to determine whether the IRS properly denied written requests for taxpayer information pursuant to Section 552(b)(7) of the Freedom of Information Act, or FOIA, and Section 6103 of the Tax Code.
In addition, TIGTA found that the IRS’s Disclosure Office does not have direct control over how other IRS functions process Section 6103 information requests, nor does it regularly assess the quality of disclosure responses throughout the IRS.
Even though the number of backlogged information request cases increased for the second straight year, TIGTA found that responses to all sampled FOIA/Privacy Act information requests were timely. While there are no statutory time frames within which the IRS must respond to taxpayers’ Section 6103 information requests, the IRS established guidelines for all Disclosure Office personnel to contact the requestor and either provide an interim response or submit a status report prior to the expiration of 30 business days. TIGTA found that for 14 (25.5 percent) of the 55 Section 6103 information requests reviewed, the IRS took more than 30 business days to provide a response.
In addition, disclosure specialists inadvertently disclosed sensitive taxpayer information in three responses to FOIA/Privacy Act and Section 6103 information requests.
TIGTA recommended the IRS develop and implement a formalized plan to periodically review the quality and processing of Section 6103 information requests worked outside of the Disclosure Office. The IRS should also incorporate timeliness procedures for Section 6103 information requests into the Internal Revenue Manual as well as remind employees of the new procedures for processing Section 6103 information requests, TIGTA suggested, and develop and implement a plan to focus on decreasing the number of backlogged cases. The IRS partially agreed with TIGTA’s first recommendation, agreed with the other two recommendations, and plans appropriate corrective actions.
The IRS also wanted to clarify some of the estimates in TIGTA’s report. The report said, "We identified eight requests for which disclosure specialists improperly withheld the requested information. Based on our sample error rate of 12.31 percent and a confidence level of 90 percent, we estimated that the number of requestors erroneously denied information to be 346 [2,809 x 12.31 percent].”
In response, Mary J. Howard, director of privacy, governmental liaison and disclosure at the IRS, wrote, “Although we do not dispute those findings, it is important to understand the eight exception cases involved the release of 12,984 pages of records. Of those 12,984 pages identified, only 102 of those pages contained errors in under or over-withholding. Statistically, that computes to an error rate of only 0.785 percent. Disclosure offices process and release hundreds of thousands of pages on an annual basis, using a system that does not have search and find functionality that would enhance consistency in applying redactions to duplicate pages. In addition, our processes are subject to human error and the low error rate on the number of pages released reflects a more realistic picture of our effectiveness that should be noted.”
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