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Lawmakers Seek IRS Explanation for Destroyed Hard Drive

Senate and House chairmen cite “troubling record” of losing documents related to lawsuits.

The Internal Revenue Service is again scouring its files and databases for documents demanded by Congress after the disclosure last week that the agency last year erased a former employee’s hard drive containing records related to an ongoing court case.

Chairmen of both the Senate Finance and House Ways and Means panels have sent letters to Internal Revenue Commissioner John Koskinen demanding the hard drive, documents related to a Freedom of Information Act dispute and an explanation of the IRS’s general document preservation policies.

“This disclosure comes months after the IRS deleted electronic evidence related to a Finance Committee investigation,” wrote Sens. Orin Hatch, R-Utah, and the Finance ranking member Sen. Ron Wyden, D-Ore., on Jan. 20. “During the committee’s bipartisan investigation into the treatment of tax-exempt organizations, the IRS accidentally destroyed 422 back-up tapes and up to 24,000 emails subject to our document requests. The IRS’ missteps in preserving documents—whether they be the subject of a congressional investigation, court order, or FOIA request—are concerning, and necessitate further oversight into the agency’s document preservation practices.”

They were joined on Jan. 22 by House Ways and Means Chairman Kevin Brady, R-Texas, and House Oversight Subcommittee Chairman Peter Roskam, R-Ill., who wrote to Koskinen that “in order for taxpayers to trust the IRS, they need to know that the IRS is dealing with them fairly and playing by the rules. The IRS, however, has demonstrated now at least twice that it is either unwilling or unable to obey basic rules of discovery before federal courts and before Congress.”

The erasure of the hard drive emerged in a Jan. 15 court document—acknowledged four days later by the IRS—in a FOIA case involving a document request from Microsoft. A hard drive belonging to Samuel Maruca, formerly director of transfer pricing in the IRS’ Large Business and International Division, “was inadvertently not captured by the litigation hold for these cases,” and thus was “sanitized” in April 2015 while the litigation was pending, according to the House letter. The documents generally address the agency’s use of outside law firms to conduct examinations of taxpayers.   

The letters called for “information regarding the IRS’s document retention policies and its troubling record of destroying protected records.” That would include the hard drive itself and a “a narrative of the custody of that hard drive, including the names of each IRS official who had custody of the hard drive during this period, the time for which they held it, the location that it was stored,” the senators wrote.  

The House members cited the previous destruction of hard drives containing emails from Lois Lerner, the official at the center of the political targeting allegations, The IRS “has demonstrated now at least twice that it is either unwilling or unable to obey basic rules of discovery before federal courts and before Congress.”

In the new case, the agency is being asked to “Explain the difference between recycling and sanitizing hard drives. How long has the IRS had a policy of destroying (including but not limited to recycling or sanitizing) employee hard drives one month after their separation from the agency? Why was this policy created? Who created this policy? When and how is it administered?”

The House letter also demands the “original search memorandum associated with Microsoft’s FOIA request and all of the transmission correspondence distributing that memorandum” as well as documents related to the discovery of the destroyed hard drive and general procedures on document “holds.”

Both letters ask for IRS officials involved with the case and general records policy to be available to congressional staff—to the House by Feb. 5, the Senate by Feb. 19. Those officials include Ed Killen, director of privacy, government liaison, and disclosure at the agency.

The IRS, in a statement to Government Executive on Monday, said, “We are continuing to review the situation, and we are collecting the detailed information requested” by the lawmakers.

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