IRS Records:

Inconsistencies Between Statutes Affect Records Appraisal

GGD-98-4: Published: Oct 2, 1997. Publicly Released: Oct 2, 1997.

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Lynda D. Willis
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Pursuant to a congressional request, GAO evaluated the Internal Revenue Service's (IRS) records management program, focusing on how IRS: (1) applies the restrictions of U.S. Code, title 26, section 6103, in reviewing and inventorying its records; and (2) carries out its records management responsibilities.

GAO noted that: (1)the National Archives and Records Administration's (NARA) 1995 review of IRS' records program found that IRS had managed its overall records program according to NARA requirements, except for certain issues; (2) NARA found that certain management and policy documents, many of which IRS maintained were subject to the disclosure restrictions of section 6103, were not inventoried or scheduled for disposition as required, and that some documents were stored in unsatisfactory conditions; (3) NARA's review highlighted issues associated with its inability to appraise certain IRS records for historical value because of IRS' interpretation of section 6103 restrictions; (4) GAO's review confirmed that these problems existed, but identified progress being made by IRS, and confirmed that the controversy related to NARA's access remains unresolved; (5) certain IRS management that documented policymaking and high-profile programs and actions were not reviewed by NARA because IRS maintained that the documents potentially contained taxpayer-protected data; (6) NARA and IRS subsequently worked out a test method for appraising some of these management records; (7) IRS and NARA engaged in a "blind" review of the 6103-protected records, whereby an IRS official described the records' contents to the NARA records appraiser who decided on the basis of this description whether the records had historical value; (8) the nonprotected records were made available to NARA for appraisal; (9) GAO observed that 59 percent of the records were designated as historical and containing tax returns or return information, 36 percent were designated as historical and containing no tax return information, and 5 percent were designated as nonhistorical and could be destroyed after the applicable period; (10) at the time of NARA's and GAO's reviews, a substantial backlog of uninventoried records has accumulated at IRS; (11) in four of the six headquarters storage locations GAO observed in early 1996 , records were stored in no particular order and under poor conditions; (12) according to NARA, some of the records stored at IRS headquarters could have been less expensively stored at a federal records center; (13) early in 1996, IRS escalated its efforts to improve its records management program with NARA's assistance; (14) as of May 1997, IRS' last official reporting date, NARA said that IRS had completed action on 47 of NARA's 58 recommendations to improve records management and was making progress on the other recommendations; and (15) the two agencies agreed that less progress had been made on resolving NARA's access for appraisal purposes.

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