IRS Lost Thousands of Cartridges Containing Sensitive Tax Records

The Internal Revenue Service (IRS) cannot find thousands of microfilm cartridges holding millions of tax records.

The Treasury Inspector General for Tax Administration stated in a report that its review “identified significant deficiencies in the IRS’s safeguarding, accounting for, and physical storage of its microfilm backup cartridges.”

“In fact, management could not provide a time frame of when the last required annual inventory was conducted. The lack of adequate inventory controls also includes no reconciliation of the microfilm backup cartridges noted as being sent from closed Tax Processing Centers to what was physically shipped and received,” the document adds.

The cartridges contain backup information on tax records from fiscal year 2010.

“The IRS is not in compliance with records management requirements. IRS management stated that 15 large pallets containing microfilm cartridges required to be sent to the Federal Records Center have been stored at the IRS’s National Distribution Center since 2018,” the report notes.

“IRS management noted that efforts are underway to coordinate with the Government Publishing Office to have these 15 pallets of microfilm cartridges shipped to the Federal Records Center. However, as of April 2023, IRS management noted that they have yet to secure a contract to have the microfilm cartridges sent.”

According to the report, the “personal taxpayer and tax information included on these backup cartridges is key information that can be used to commit tax refund fraud identity theft.”

Reporting from The Hill:

Tuesday’s report also found that the microfilm cartridges at the Ogden center are not being “adequately safeguarded to limit access” to the sensitive information they contain and that all three tax processing centers continued to store cartridges past their proper retention date.

The backup cartridges are meant to be destroyed after 30 years for individual tax records and 75 years for business tax records.