$12.3 Billion Budget Can’t Save IRS From Destroying 30 Million Paper Returns

irs lost paper returns
Matthew G. Bisanz, CC BY-SA 3.0 <https://creativecommons.org/licenses/by-sa/3.0>, via Wikimedia Commons

By Adam Andrzejewski for RealClearPolicy

Despite its $12.3 billion budget, the IRS can’t seem to conduct its most basic function of processing tax returns.

According to a May 2022 report from the Treasury Inspector General for Tax Administration, the IRS destroyed an estimated 30 million tax documents in March 2021.

The agency claims it was unable to process the backlog of paper returns. The destroyed documents were supposed to be used for “post-processing compliance matches” to verify the accuracy of tax returns. Since the IRS can’t process returns after a certain time because the system is taken offline, the 30 million unprocessed documents were simply destroyed.

In 2020, the IRS spent $12.3 billion on overall operations, and employed more than 75,000 full-time employees. Apparently, that wasn’t sufficient to accomplish its main job of processing and verifying tax returns.

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Much of this was spent processing paper returns. It costs the IRS $15.21 to process each paper filing of Form 1040, $14.02 for each Form 1041, and $12.98 for partnership filings, like Forms 1065, according to the report.

Conversely, each of those forms only cost around $0.30 to process electronically. The anachronistic practices of still accepting paper returns are costing taxpayers hundreds of thousands of dollars each year.

Americans collectively spend over 6.5 billion hours filing taxes each year, according to the American Action Forum, costing the IRS billions to process.

It is hard to watch all that hard work negated by bureaucratic inefficiency.

Syndicated with permission from Real Clear Wire.

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