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Watchdog Group Sues IRS Over Stonewalled Investigation Into Massive Tax Record Leak

  • An Internal Revenue Service (IRS) investigation into a massive 2021 leak of taxpayer data has so far failed to turn up any answers about how the data got out.
  • The Functional Government Initiative (FGI), a government watchdog group, is suing the IRS in an effort to get the agency to hand over documents about its investigation into the source of the leak, which it has so far refused to share.
  • “They seem to be more transparent with information they are supposed to keep confidential than with documents that should be part of the public record,” Pete McGinnis, an FGI spokesman, told The Daily Caller News Foundation.

A government watchdog group is suing the IRS for allegedly violating transparency requirements after the agency denied the group’s requests for documents regarding confidential tax documents leaked to the press in 2021.

ProPublica published the tax records of some of the wealthiest Americans June 8, 2021, and the Internal Revenue Service (IRS) and the Treasury Department have failed so far to produce answers as to how Americans’ private tax documents were leaked. The Functional Government Initiative (FGI) began investigating the IRS in February but, after months of conversations, the agency blocked FGI from accessing documents discussing updates about their investigation into the source of the leak, Pete McGinnis, an FGI spokesman, told The Daily Caller News Foundation.

“They seem to be more transparent with information they are supposed to keep confidential than with documents that should be part of the public record,” McGinnis told TheDCNF.

The FGI is asking the court to force the IRS to hand over documents about the findings of its investigation through the Freedom of Information Act and to take over the investigation, according to the complaint provided to TheDCNF.

“With a breach as detrimental to the integrity of the IRS as this, one would think that the agency that has access to every American’s private financial information would do everything in their power to discover the source quickly and in a manner that revives public trust in the Service,” McGinnis said in a press release. “The systemic issues that allowed the leak, however, appear to be just the latest example of dysfunction plaguing the Service.”

The massive IRS leak and the agency’s apparent inability to determine how the leak occurred raise questions about taxpayers’ ability to trust them with their confidential financial records, according to McGinnis.

“Americans are required to provide their most sensitive financial information to the IRS,” he said. “They expect this information to have the highest level of protection. The inability of the IRS to not only protect this information but, beyond that, to identify the source of the leak after a year is infuriating and every day that passes will further erode the trust America expects and deserves. The IRS needs to make this a priority and be fully transparent about the process.”

House Ways and Means Committee Ranking Member Kevin Brady and Senate Finance Committee Ranking Member Mike Crapo sent a letter April 18 to Treasury Secretary Janet Yellen requesting an update on the investigation into the leaks, but did not receive any answers, according to an April 22 press release.

Republican Ohio Rep. Jim Jordan and Republican California Rep. Darrell Issa sent letters to the IRS and the Treasury Inspector General for Tax Administration (TIGTA) in July 2021 demanding information on the investigation into the leak. Jordan confirmed to TheDCNF on Wednesday that he has received no updates about the investigation besides an initial reply to his letter.

“The delay in getting answers for the public certainly impacts the ability of the public have trust and respect for the internal revenue service,” IRS Commissioner Charles Rettig said in April 21 testimony to the House Oversight Committee. “Taxpayer security taxpayer protection of their data is really one of the highest priority of the Internal Revenue Service.”

Rettig declined to answer several questions about the IRS’s ability to track which employees access certain tax documents and referred the committee to the Treasury Inspector General for Tax Administration.

Republican lawmakers have echoed FGI’s concerns, with Jordan arguing that Americans can’t trust the IRS to keep their data private.

“I don’t know if the IRS is on top of it. It sure doesn’t seem like it from the response we got back from them,” Jordan told TheDCNF in April.

“Americans need to know that your tax returns remain confidential. This is one of the hallmarks of our system and if that’s not the case, if they’re going to be targeted by the IRS like Lois Lerner did a few years ago and have their returns go public, that just can’t happen,” he said.

The IRS and the Treasury Department did not respond to TheDCNF’s requests for comment.

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