IRS Office Admits Shredding Taxpayers’ Letters of Appeal

Internal Revenue Service workers in Fresno shredded 50,000 appeals from taxpayers this year without bothering to answer them, IRS officials confirmed Friday. Destruction of the documents runs counter to IRS policy.

The letters were from businesses disputing notification that they owed additional taxes, IRS officials said. After it was determined that the businesses were correct, their letters were destroyed and they received no further correspondence from the tax collectors.

“There was a step not taken that the manual does provide for,” conceded Scott Waffle, chief of media relations for the IRS in Washington. “There should have been correspondence with the taxpayers to indicate we agree with them.”

Asked how the taxpayers were to interpret the IRS’ lack of response to their appeal, Waffle said: “I would say, ‘No news is good news.’ I would assume there wasn’t any further problem.”

The shredding in Fresno represents the latest in a series of allegations and admitted errors that have dogged the IRS this year as it implements a new $103-million computer system. National Treasury Employees Union officials have said morale among IRS employees is low, asserting that service centers are understaffed and overworked.

Large-scale letter-shredding occurred earlier at a service center in Austin, Tex., erroneous demands for $300 million in payments were mailed to 10,000 taxpayers on the East Coast and there were allegations--strongly denied by the IRS--that tax returns were destroyed in Philadelphia by overburdened workers.

The Fresno matter was brought to light Thursday by union officials, who blamed malfunctions in the new computer system and increased demands on a shrinking staff for the pressure that led to the decision to destroy the unanswered letters.

“The IRS is a service organization, and this certainly is a disservice to the taxpayers,” said Ronald Knod, president of Local 97 of the National Treasury Employees Union. The local represents 3,800 workers at the sprawling tax center in Fresno, where all federal tax returns from California and Hawaii are processed.

Knod said union officials suspect that some shredded letters may have been from taxpayers who actually are owed refunds.

Checking Elsewhere

Waffle said the other nine IRS service centers were being canvassed Friday to determine if similar destruction of documents had occurred.

Waffle said no disciplinary action is being contemplated in the Fresno shredding, which he indicated was ordered by the top official at the facility. The requirement that successful tax challengers be notified was added to the IRS manual only this year, he said.

“If you are a manager and you are allocating resources,” Waffle said, “you have to make certain judgments, and sometimes some things have to go and some modifications must be made.”

IRS service centers, Waffle said, are not “warehouses for correspondence.”