The Internal Revenue Service may have inadvertently disclosed sensitive taxpayer information in response to Freedom of Information Act requests in violation of taxpayer rights, according to a new report.
The report, from the Treasury Inspector General for Tax Administration, is issued annually to examine whether the IRS is responding properly to FOIA requests. However, the issue has taken on greater importance this year in light of the presidential election, with a Democratic super PAC filing a FOIA request last month with the IRS for copies of Donald Trump’s tax correspondence (see Democrats File FOIA Request for Trump’s IRS Correspondence). This week, the media company Vice News filed suit against the IRS for failing to respond to a FOIA request for copies of the agency’s audits of Trump’s tax returns.
For the TIGTA report, auditors reviewed a statistical sample of 60 information requests out of 2,720 FOIA requests and found seven (that is, 11.7 percent) in which taxpayer rights may have been violated. The report acknowledged the IRS properly released thousands of pages from these documents, but taxpayer rights may have been violated because the information requests had some information erroneously withheld. TIGTA also chose a statistical sample of 55 information requests under Section 6103 of the Tax Code, which governs confidentiality and disclosure of tax returns and return information, and found the IRS adequately provided information for all of those requests.
However, with the IRS’s tight budget, FOIA requests were delayed. The number of backlogged FOIA requests increased for the third straight year, though TIGTA found that responses to all of the FOIA requests in its sample were issued on a timely basis. There are no statutory timeframes within which the IRS must respond to taxpayers’ Section 6103 information requests, but the IRS requires its disclosure specialists to provide a status report to the requestors if their requests are not completed within 30 business days. For nine (that is, 16.4 percent) of the 55 Section 6103 information requests reviewed by TIGTA, the IRS took more than 30 business days to provide a status report to the requestor. According to the IRS, the cases identified by TIGTA in which requestors did not hear about the status of their FOIA requests on a timely basis could have been caused by an oversight by caseworkers when completing their reviews.
In addition, disclosure specialists at the IRS inadvertently disclosed sensitive taxpayer information in two instances when they responded to FOIA requests. Finally, based on a sample of 19 information requests received by the IRS’s Tax Exempt and Government Entities Division under Section 6104 of the Tax Code, which governs publicity of information from certain tax-exempt organizations and trusts, TIGTA found the information requests were processed on a timely basis and no sensitive information was inadvertently disclosed.
TIGTA made no recommendations in the report, but IRS officials reviewed the report before it was issued and agreed with its facts and conclusions.
“The IRS remains committed to openness in government to ensure public trust and to support the ideals of transparency, public participation and collaboration,” wrote Edward T. Killen, director of privacy, governmental liaison and disclosure at the IRS. “We appreciate your recognition of the positive steps taken by the IRS to operate an effective Freedom of Information Act program and as always, we will continue to work towards improving the processing of information requests in a timely and quality manner. Although there were no recommendations cited in the report, it is important for the public to understand our offices process and release hundreds of thousands of pages during each fiscal year. The cases identified with errors involved the release of 15,660 pages of records. Of those 15,660 pages, only 124 pages had errors in under or over withholding.”
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