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Wednesday, May 18, 2022

IRS insists destruction of 30 million recordsdata of taxpayer information gained't have an effect on payers

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Filers will not be affected by the IRS resolution to destroy information for thousands and thousands of taxpayers, the company stated in a press release Thursday.

The IRS tossed an estimated 30 million so-called paper-filed info returns in March 2021, in accordance with an audit by the Treasury Inspector General for Tax Administration.

The information has sparked anger within the tax neighborhood, a lot of whom fear concerning the company’s means to confirm returns, triggering extra error notices, particularly with restricted methods to achieve the IRS.

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“We processed 3.2 billion information returns in 2020. Information returns are not tax returns, and they are documents submitted to the IRS by third-party payors, not taxpayers,” the IRS stated in its assertion.

The company stated 99% of the data returns had been already processed, and the remaining 1% had been destroyed as a consequence of a “software limitation,” making room for the 2021 submitting season.

“There were no negative taxpayer consequences as a result of this action. Taxpayers or payers have not been and will not be subject to penalties resulting from this action,” the company stated.

The company stated the state of affairs displays “significant issues posed by antiquated IRS technology.” In 2020, the IRS prioritized backlogged returns to ship refunds and different Covid-19 aid over processing lower than 1% of paper info returns — largely Form 1099s.

System constraints require the IRS to course of paper types by the top of the calendar yr wherein they had been obtained, the company stated.

“Not processing these information returns did not impact original return filing by taxpayers in any way as taxpayers received their own copy to use in filing an accurate return,” the IRS stated.

“The IRS is planning to process all paper information returns received in 2021 and 2022,” the company added.

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