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Audit: IRS improperly withholding information requested by taxpayers

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[September 30, 2015]  By M.D. Kittle 

The federal agency that wants your money still has a problem with transparency.

A new audit shows the Internal Revenue Service improperly withheld information from requesters under the Freedom of Information Act 12.3 percent of the time.

The Treasury Inspector General for Tax Administration, or TIGTA, the IRS’ auditor, reviewed a statistically valid sample of 65 FOIA requests and found eight requests for which the tax collector improperly withheld information.

“The eight cases we identified included improperly withheld information of examination and collection activity and other tax return information that the taxpayer or authorized Power of Attorney should have received,” the audit states.

Extrapolated, some 346 FOIA/Privacy Act requests may have had information erroneously withheld between Oct. 1, 2013, and Sept. 30, 2014, according to the audit.



TIGTA also found that the IRS did not release 7.3 percent of the Internal Revenue Code information requests reviewed — information that should have been open to the requester.

“Although the IRS properly released thousands of pages from these documents, taxpayer rights still may have been violated because some information was erroneously withheld,” the audit notes.

RELATED: IRS pays out billions in improper income-based tax credits, audit finds

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The IRS must ensure the provisions of the Freedom of Information Act, the Privacy Act of 1974 and the Internal Revenue Code are followed. Errors can violate taxpayer rights “and result in improper disclosures of taxpayer information,” according to the auditor.

TIGTA’s audit last year found the IRS improperly withheld FOIA-requested information from taxpayers in 11.3 percent of the reviewed cases.

In addition, sensitive taxpayer information was inadvertently disclosed in 13 FOIA requests, or about 21 percent of the cases reviewed.

The 2014 audit came at a sensitive time for the IRS, which faced lawsuits from conservative watchdog groups due to the agency’s failure to turn over emails and other information tied to the IRS scandal involving tax-exempt status for right-of-center groups.

While the number of backlogged information request cases increased for a second straight year, TIGTA’s most recent audit found that agency responses “were timely.”

There are no timeframes under which the IRS must respond to taxpayers’ Internal Revenue Code information requests, but the IRS has established guidelines of responding within 30 business days.

TIGTA found that the IRS took more than 30 business days to respond in 24.5 percent of the information requests reviewed.

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