Treasury Inspector General for Tax Administration Pounces on IRS Federal Records Retention Policies; Recommends Changes
The Treasury Inspector General for Tax Administration (TIGTA) recently summarized several critical deficiencies in how the IRS handles electronically stored federal records in a recent report, available here. The lapses identified by TIGTA may affect the availability of those electronic records for future Freedom of Information Act (FOIA) requests, litigation and Congressional review. The report does not address the IRS’s retention policy for physical documents.
Federal law mandates the retention of the government’s federal records. Unfortunately, prior to May 22, 2013, IRS electronic asset disposal policies included instructions to “wipe” and “reimage” computer hard drives that were no longer needed by IRS users. If those computers were the only repository for electronically stored federal records, that information would be lost. TIGTA noted that, even though the IRS revisited those policies several times, computers were still being wiped and reimaged as part of the IRS’s migration to Windows 7 through January 14, 2016. This also affects email retention since users are often required to manually identify and store or print their email records. An upgraded email solution that will permit the automatic retention and storage of email records is being implemented.
Further, TIGTA determined the IRS’ storage and retention policies for computers that were not wiped or reimaged were ineffective. For example, TIGTA found that the IRS has approximately 32,000 laptops and desktops in storage, but an inventory report identifying the number and location of computing devices currently in storage from specific employees could not be readily produced, rendering electronic federal records on those devices essentially unavailable.
These inadequate electronic record retention policies have resulted in the destruction of material subject to litigation holds, delays in the FOIA process, and the unavailability of responsive documents for FOIA requests. TIGTA made the following recommendations, which the IRS agreed to:
- An enterprise email system should be implemented that enables the IRS to comply with federal records management requirements.
- A methodology for developing one list of executives for the permanent and 15-year email retention groups should be documented.
- The newly issued policy on the collection and preservation of federal records associated with separated employees should be disseminated broadly within the agency.
- The director should ensure that the policy for documenting search efforts is followed by all employees involved in responding to FOIA requests.
- The director should develop a consistent policy for the search of federal records associated with separated employees.
Practice Point: When drafting FOIA requests and discovery requests for electronic records, practitioners should be aware of record-retention challenges facing the IRS since they will impact the IRS’s ability to fully respond to FOIA requests and adequately implement litigation holds for years to come.