IRS insists destruction of taxpayer data will not affect taxpayers
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The search agency will not be affected by the IRS’s decision to destroy the data of millions of taxpayers, the agency said in a statement Thursday.
The IRS released an estimated 30 million paper returns by March 2021, according to an audit by the Treasury Inspector General for Tax Administration.
News has causing anger in the tax communitymany of them worry about the agency’s ability to verify returns, causing more error messages, especially with limited ways to contact the IRS.
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The IRS said in their statement: “We processed 3.2 billion information returns in 2020. Information returns are not tax returns and they are documents issued by third party payers, non-taxpayer filing with the IRS.
The agency said 99% of information returns were processed and the remaining 1% were canceled due to “software limitations,” making way for the 2021 filing season.
“There are no negative consequences for taxpayers as a result of this action. Taxpayers or taxpayers have been and will not suffer penalties as a result of this action,” the agency said.
The agency said the situation reflects “significant issues posed by antiquated IRS technology.” In 2020, the IRS prioritizes backlog returns to provide refunds and other Covid-19 relief in processing less than 1% of paper returns – mainly Forms 1099s.
The agency said system constraints require the IRS to process paper forms by the end of the calendar year they were received.
Failure to process these returns does not affect the original taxpayer filing in any way because taxpayers received their own copies for use, the IRS said. used in filing accurate tax returns.
The agency added: “The IRS is planning to process all paper declarations received in 2021 and 2022.