Today the Treasury Inspector General for Tax Administration published an audit showing the IRS frequently loses sensitive documents during transfers between facilities. The affected households and businesses are often not notified because IRS personnel do not follow official procedures and do not even know whose files were lost.

Among the lost documents: “A whistleblower case file.” (See page 6 of the report, page 10 of the pdf)

The TIGTA report noted:

The IRS is not adhering to its own internal guidelines when sending large volumes of sensitive taxpayer information to and from its Tax Processing Centers.

Due to IRS carelessness, taxpayers may be at risk for identity theft.

The report stated:

As a result, the IRS is unable to identify, notify, and/or offer protection to taxpayers when sensitive tax information is lost in the mail and at risk for potential identity theft.

In an onsite inspection, TIGTA examined 40 packages containing “large volumes of sensitive taxpayer information” and found that ONLY ONE included the properly prepared paperwork.

The auditors wrote:

“In our discussions with the Files function, employees indicated that when shipments of large volumes of sensitive taxpayer information are lost, there would be no way to identify specific taxpayers whose information was compromised. This results from the fact that no information is maintained to support which specific taxpayer was associated with the sensitive information in the lost shipment.”

The audit report did not provide details of the lost “whistleblower case file.”

Stay tuned.