Charles P. Rettig, commissioner of the Internal Revenue Service, testifies during a Senate Finance Committee hearing titled IRS Fiscal Year 2022 Budget, at the Dirksen Senate Office Building in Washington, DC, on June 8, 2021.
Tom Williams | Swimming Pool | Reuters
A top Democrat in the House of Representatives on Friday called on the President Joe Biden to replace IRS Commissioner Charles Rettig on controversial agency matters destroy data related to 30 million paper tax returns filed.
Representative Bill Pascrell of New Jersey, chairman of the oversight subcommittee of the powerful House Ways and Means Committee, said: “The IRS plays an important role in public confidence in our nation. We and our Trump-appointed leader have failed.”
“This latest disclosure furthers the public’s confidence in our unfair two-tier tax system,” Pascrell said.
“That confidence cannot be restored if all the American people see at the IRS are incompetence and disaster,” the Democrat added. “The way we are learning about the destruction of unprocessed paperwork is just the latest example of Mr. Rettig’s lack of seriousness.”
The White House did not immediately respond to requests for comment on Pascrell’s statement. An IRS spokesman was not immediately available for comment.
The call to overthrow Rettig came after The Treasury Department’s Tax Administration Inspector General has released the results of an auditThis angered tax preparers.
The audit found that the IRS has continued a “substantial backlog of unprocessed personal and business tax returns” since the agency reopened its tax processing centers in June 2018. 2020, several months after the Covid-19 pandemic resulted in their closure.
The audit found that the inability to handle the backlog of paper returns contributed to management’s decision to destroy an estimated 30 million paper returns in December. 3 year 2021.
Those documents may include W-2 forms and other information submitted to the IRS by employers and financial institutions.
Tax preparers have told CNBC they fear the destruction of the documents could make it impossible for the IRS to verify the taxpayer’s return details, which in turn could lead to delayed returns.
Phyllis Jo Kubey, president of the New York State Association of Registrars, said: “I was appalled when I read the report describing the destruction of paper information returns.
IRS on Thursday night says “99% of the declarations we used matched the respective tax returns and were processed”, while “the remaining 1% of those documents were destroyed due to software limitations and to make room for new documents regarding the pending 2021 filing season.”
There are no negative consequences for taxpayers as a result of this action, the IRS said. “The taxpayer or taxpayer has been and will not incur penalties as a result of this action,” the agency said.
That explanation wasn’t good enough for Pascrell, who said that Ways and Means Committee members and other members of Congress “have shown tremendous patience with the IRS.”
“IRS employees have had an admirable track record over their careers while under tremendous pressures, strained resources, and near-impossible circumstances during this pandemic,” Pascrell said. “Republican sabotage of the agency over the past decade has exacerbated these challenges. During our hearings, I have repeatedly demonstrated respect for the work of reform. IRS but just enough is enough.”
He continued later in the statement: “This latest revelation furthers the public’s confidence in our unfair two-tier tax system. That trust cannot be recovered if all the people do. America sees in the IRS as incompetence and disaster.”
“Mr. Rettig has had a lot of time and a lot of cooperation to start the important work of fixing the IRS. There needs to be real accountability. President Biden must replace Mr. Rettig immediately and also appoint him as well. a Chief Counsel to the IRS.”
– CNBC’s Kate Dore contributed to this report.