A watchdog report reveals that the Internal Revenue Service IRS is facing challenges in locating thousands of microfilm cartridges that hold millions of sensitive tax records for both individuals and businesses. These cartridges serve as backups for tax records, as mandated by federal law.
According to a recent report by the Treasury Inspector General for Tax Administration, the IRS is unable to track down microfilm cartridges dating back to fiscal 2010. Initially stored at a processing center in Fresno, California, these cartridges were intended to be transferred to another processing center in Kansas City, Missouri, last February, following the closure of the California facility.
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Adding to the issue, the watchdog discovered seven empty boxes at the Ogden Tax Processing Center in Utah. These boxes had the capacity to hold a total of 168 cartridges, but their contents were missing. Personnel at the Ogden center were unaware of the whereabouts of the absent cartridges.
The report indicates that the Kansas City facility is also unable to locate over 4,000 cartridges containing business tax account details from fiscal 2018, along with an additional 4,500 cartridges containing individual tax account information from fiscal 2019.
The comprehensive report underscores the critical nature of the personal taxpayer and tax information stored on these backup cartridges, highlighting that this key data could potentially be exploited for nefarious purposes such as tax refund fraud and identity theft. The implications of this vulnerability are particularly concerning and raise significant alarms within the realm of data security.
In addition to these revelations, the report released on Tuesday further reveals a disconcerting lack of adequate safeguards in place at the Ogden center, inadvertently enabling unauthorized access to the sensitive contents of the microfilm cartridges. This oversight in maintaining strict access controls poses a significant threat to the confidentiality of the information contained within.
Risks and Imperatives in Tax Processing Centers
A noteworthy aspect highlighted within the report pertains to the retention period of these backup cartridges. Alarmingly, all three tax processing centers, including the Ogden center, were found to have retained cartridges beyond their designated retention dates. This oversight, though unintended, underscores the importance of adhering to proper data retention protocols and highlights potential deficiencies in the management of these critical records.
It is essential to emphasize that the backup cartridges, as mandated by established regulations, should be securely destroyed within specified timeframes—30 years for individual tax records and 75 years for business tax records. This ensures that obsolete data is expeditiously disposed of, reducing the risk of any unauthorized access or potential misuse. Addressing these findings and implementing robust corrective measures will be pivotal in safeguarding sensitive tax information and upholding the integrity of the entire tax processing system.