The IRS needs to tighten up its procedures for handling requests for tax account information, according to a recent report.

The report from the Treasury Inspector General for Tax Administration looked at how the IRS is following the mandates of the Freedom of Information Act, the Privacy Act of 1974, and Internal Revenue Code Section (§) 6103, to determine if the service properly denied written requests for tax account information.

As errors in this area can violate taxpayer rights and result in improper disclosures of tax information, TIGTA is required to conduct periodic audits to determine if the IRS properly denied written requests for tax account information.  

Of 55 FOIA/Privacy Act information requests (from a population of 3,415 requests), TIGTA found nine (16.4 percent) in which the IRS improperly withheld or failed to adequately search for and provide information to requestors. In addition, the IRS failed to adequately search for and provide information in three (5.6 percent) of 54 sampled IRC Sec. 6103 information requests.  

All of the FOIA/Privacy Act information requests sampled were responded to in a timely fashion. While there are no statutory time frames within which the IRS must respond to Sec. 6103 requests, for 15 (27.8 percent) of the 54 Sec. 6103 requests, the IRS took more than 30 calendar days to provide a response.

In addition, sensitive taxpayer information was inadvertently disclosed in response to nine (16.4 percent) of the FOIA/Privacy Act and four (7.4 percent) of the Sec. 6103 requests reviewed.

TIGTA recommended that the IRS require disclosure specialists to adhere to the general correspondence guidelines when processing Sec. 6103 requests by specifying these time frames in the disclosure section of the Internal Revenue Manual; and that it emphasize the importance of disclosure laws and regulations with disclosure specialists and their managers.

The IRS agreed with both recommendations. 

This is TIGTA’s fourteenth review of denials of FOIA, Privacy Act, and Sec. 6103 information requests.

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