TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Electronic Record Retention Policies Do Not Consistently Ensure that Records Are Retained and Produced When Requested

Final Report Issued on July 13, 2017

Highlights

Highlights of Reference Number:  2017-10-034 to the Internal Revenue Service Commissioner.

IMPACT ON TAXPAYERS

The IRS is required by Federal law to retain and produce Federal records when requested through appropriate legal means.  Recently, the IRS reported that, when responding to requests from external parties, it had determined that some documents had been lost or destroyed.  The Freedom of Information Act enables the public to request access to Federal records and information.  The IRS’s ability to adequately respond to Federal records requests is essential in maintaining the public’s trust and ensuring transparency in Government.

WHY TIGTA DID THE AUDIT

This audit was requested by the Chairman of the House Committee on Ways and Means and Chairman of the Senate Committee on Finance to determine the IRS’s policies for record retention, whether the policies comply with Federal requirements, and whether the IRS’s practices for responding to requests for records ensure that responsive records are retained and provided according to Federal requirements.

WHAT TIGTA FOUND

IRS policies do not comply with certain Federal requirements that agencies must ensure that all records are retrievable and usable for as long as needed.  For example, IRS e-mail retention policies are not adequate because e-mails are not automatically archived for all IRS employees.  Instead, the IRS’s current policy instructs employees to take manual actions to archive e-mails by saving them permanently on computer hard drives or network shared drives.  This policy has resulted in lost records when computer hard drives are destroyed or damaged.  In addition, a recently instituted executive e-mail retention policy, which should have resulted in the archiving of e-mails from specific executives, was not implemented effectively because some executives did not turn on the automatic archiving feature.

For certain cases that TIGTA reviewed, IRS policies were not implemented consistently to ensure that all relevant documents were searched and produced when responding to external requests for records.  TIGTA’s review of 30 completed Freedom of Information Act requests found that in more than half of the responses, the IRS did not follow its own policies that require it to document what records were searched.  TIGTA also found that IRS policies for preserving records from separated employees were not adequate.

WHAT TIGTA RECOMMENDED

TIGTA made five recommendations related to improving the IRS’s policies for record retention and responding to external requests for records.  For example, TIGTA recommended that the IRS implement an enterprise e-mail solution that enables the IRS to comply with Federal records management requirements.  TIGTA also recommended that the newly issued policy on the collection and preservation of Federal records associated with separated employees is disseminated throughout the agency to ensure consistent compliance with Federal records retention requirements.

In their response to our report, IRS management agreed with all five recommendations.  The IRS stated that deployment of a new enterprise e‑mail solution is currently underway that should enable the IRS to comply with Federal records management requirements.  The IRS also stated that it has issued interim guidance on the separating employee clearing process for collecting and preserving Federal records, which has been disseminated throughout the IRS.

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2017reports/201710034fr.pdf.