IRS admits email fail

The Internal Revenue Service (IRS), the huge US government agency that processes more than 230 million tax returns annually, has revealed its inability to preserve its employees’ emails and track those records down when needed.

In a hearing by a United States House of Representatives committee, it called for $US18.5 million federal funding to help improve its processes for retaining and accessing data and move away from an approach that relies on printing and filing and the use backup tapes.

The House of Representatives Committee was formed to examine IRS processes for preserving documents in accordance with legal obligations, including internal preservation orders. It is also reviewing the agency’s information security to understand how the agency secures the sensitive information filed by millions of individuals and companies each yea

It was formed following an IRS disclosure on January 15 that it accidentally erased a hard drive containing records and emails of a former senior IRS official. The emails on the hard drive were subject to a litigation hold on materials relevant to a Freedom of Information Act lawsuit.

The destruction of documents subject to preservation orders and subpoenas has been an ongoing problem at the IRS.

In February 3, 2016, the IRS announced a hardware failure which rendered its electronic tax filing systems unavailable. In 2015, the IRS suffered a data breach that exposed 330,000 tax returns to hackers who stole almost $US50 million in refunds.

In a submission to the Committee, the IRS’s Jeff Tribiano, admitted “The IRS has been working for more than a year to revamp our records retention practices in regard to emails and other electronic records. While we have made significant progress in this area, we recognize the need to continue improving upon these efforts, which are described in more detail below. The IRS has long been challenged in this area, because for many years our operations have relied on extremely outdated technology. In fact, despite more than a decade of upgrades to the agency’s core business systems, we still have very old technology running alongside our more modern systems. As a result, some agency practices are not up to the level of those of a typical modern organization. A case in point is the IRS’s document retention program for electronic records, which historically has relied on individual employees either archiving information on their computer hard drives and network drives, or printing records and storing them in paper files.”

The IRS considered putting a more modern electronic records storage system in place in 2012, but was unable to do so because of budget constraints.

“A key part of our current effort to improve the management and storage of electronic records began in October 2014. In this effort, we have been in close consultation with NARA to ensure the best approach. Our interim solution has been to adopt a process created by NARA, termed the “Capstone” approach, to secure the email records of all senior officials in the agency by copying them to the network. This process for senior IRS executives was initiated in late 2014 and completed for all existing executives in April 2015. As additional executives are hired, promoted, or appointed, their email records are saved on the network. While adoption of the Capstone approach was an important step forward, it is not the ultimate solution for the preservation of electronic records of the agency. We need to end any reliance on individual hard drives as an archival records store, and instead use network databases to preserve all official records that are electronically generated by our workforce – frontline employees as well as executives. To reach that end, we are working toward having systems in place by the end of Calendar Year (CY) 2016 that will allow us to copy material off the hard drive of every employee who leaves the agency, and store that information in a digital format.

“The President’s Fiscal Year (FY) 2017 Budget request for the IRS includes $US18.5 million in additional funding to improve electronic enterprise records management, which includes funds to further improve our document search capability. The IRS urges Congress to approve this funding, so that we can move forward on this critically important initiative,” said Tribiano.

Committee Chairman and Republican Congressman Jason Chaffet, commented: “The [US] Federal Government has spent more than $US525 billion on IT and it’s worthless. One of the questions I have here with an operating budget for the IT sector—roughly $US2.4 billion a year—why is it that we have such poor systems?”