Charles P. Rettig, Commissioner of the Internal Revenue Service, testifies during the Senate Finance Committee hearing titled The IRS Fiscal Year 2022 Budget, at the Dirksen Senate Office Building in Washington, DC, on June 8, 2021.
Tom Williams | Pool | Reuters
A prominent House Democrat on Friday asked the president Joe Biden to replace IRS Commissioner Charles Rettig with the controversial Destruction of data related to 30 million paper tax returns.
“The IRS is vital to public confidence in our nation and its Trump-appointed leader has failed,” said Rep. Bill Pascrell of New Jersey, chairman of the oversight subcommittee of the powerful House Ways and Means Committee.
“This latest revelation adds to the decline in public confidence in our unfair two-tier tax system,” Pascrell said.
“That trust cannot be restored if all the American people see in the IRS is incompetence and catastrophe,” the Democrat added. “The way we are learning about the destruction of raw paperwork is just the latest example of Mr. Rettig’s nonchalant attitude.”
The White House did not immediately respond to requests for comment on Pascrell’s statement. An IRS spokesman had no immediate comment.
Rettig’s removal request came after the The Treasury Department’s tax administration inspector general released the results of an auditthat have tax preparers angry.
The audit revealed that the IRS has continued to “have a significant backlog of paper-filed individual and business tax returns that remain unprocessed” since the agency reopened tax processing centers in June 2020, months after the pandemic of Covid-19 led to its closure.
That inability to process the backlog of paper-filed returns “contributed to management’s decision to destroy approximately 30 million paper-filed information return documents in March 2021,” the audit found.
Those documents may include W-2 forms and other information submitted by employers and financial institutions to the IRS.
Tax preparers have told CNBC they fear destroying the documents could leave the IRS unable to verify the details of a taxpayer’s tax returns, which in turn could cause refunds to be delayed.
“I was horrified when I read the report describing the destruction of paper information returns,” said Phyllis Jo Kubey, president of the New York State Society of Enrolled Agents.
The IRS on Thursday night said that “99% of the information returns we used were matched against the corresponding tax returns and processed,” while “the remaining 1% of those documents were destroyed due to a software limitation and to make room for new Relevant documents for the pending submission of 2021 station.”
“There were no negative consequences to taxpayers as a result of this action,” the IRS said. “Taxpayers or payers have not been and will not be subject to penalties arising from this action,” the agency said.
That explanation wasn’t good enough for Pascrell, who said members of the Ways and Means Committee and other members of Congress “have shown immense patience with the IRS.”
“IRS career staff have performed admirably under immense pressure, limited resources, and near-impossible circumstances during this pandemic,” Pascrell said. “The Republican sabotage of this agency over the past decade has exacerbated these challenges. In our hearings, I have repeatedly shown deference to the work to reform the IRS, but enough is enough.”
He continued later in the statement: “This latest revelation adds to the plummeting public confidence in our unfair two-tier tax system. That confidence cannot be regained if all the American people see in the IRS is incompetence.” and catastrophe”.
“Mr. Rettig has had plenty of time and plenty of cooperation to begin the crucial work of fixing the IRS. There must be real accountability. President Biden must replace Mr. Rettig immediately and also nominate a Senior Counsel to the IRS.” “.
— CNBC’s Kate Dore contributed to this report.