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Joe Biden asked to switch IRS chief Charles Rettig over tax document destruction

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Charles P. Rettig, commissioner of the Internal Revenue Service, testifies through the Senate Finance Committee hearing titled The IRS Fiscal Yr 2022 Budget, in Dirksen Senate Office Constructing in Washington, D.C., June 8, 2021.

Tom Williams | Pool | Reuters

A number one House Democrat on Friday called on President Joe Biden to switch IRS Commissioner Charles Rettig over the agency’s controversial destruction of knowledge related to 30 million paper-filed tax returns.

“The IRS is important to public confidence in our nation and its Trump-appointed leader has failed,” said Rep. Bill Pascrell of Latest Jersey, chairman of the oversight subcommittee of the powerful House Ways and Means Committee.

“This latest revelation adds to the general public’s plummeting confidence in our unfair two-tier tax system,” Pascrell said.

“That confidence cannot get better if all of the American people see on the IRS is incompetence and catastrophe,” the Democrat added. “The way by which we’re learning in regards to the destruction of unprocessed paperwork is just the newest example of the lackadaisical attitude from Mr. Rettig.”

The White House and the IRS didn’t immediately return requests for comment about Pascrell’s statement.

The decision for Rettig’s ouster got here after the Treasury Department’s inspector general for tax administration released the findings of an audit, which have angered tax preparers.

The audit revealed that the IRS has continued “to have a big backlog of paper-filed individual and business tax returns that remain unprocessed” because the agency reopened tax processing centers in June 2020, months after the Covid-19 pandemic led to their shuttering.

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That inability to process backlogs of paper-filed returns “contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” the audit found.

Those documents can include W-2 forms and other information sent by employers and financial institutions to the IRS.

Tax preparers have told CNBC they fear the destruction of the documents could leave the IRS unable to confirm details on a taxpayer’s returns, which in turn can result in refunds being delayed.

“I used to be horrified after I read the report describing the destruction of paper-filed information returns,” said Phyllis Jo Kubey, president of the Latest York State Society of Enrolled Agents.

The IRS on Thursday said, “There have been no negative taxpayer consequences in consequence of this motion.”

“Taxpayers or payers haven’t been and won’t be subject to penalties resulting from this motion,” the agency said.

That claim was not adequate for Pascrell, who said that Ways and Means Committee members and other members of Congress “have shown immense patience with the IRS.”

“The profession IRS staff have performed admirably while under immense pressure, strained resources and nearly not possible circumstances during this pandemic,” Pascrell said. “Republican sabotage of this agency over the past decade have exacerbated these challenges. In our hearings, I actually have shown repeated deference to the work to reform the IRS but enough is enough.”

He continued later within the statement: “This latest revelation adds to the general public’s plummeting confidence in our unfair two-tier tax system. That confidence cannot get better if all of the American people see on the IRS is incompetence and catastrophe.”

“Mr. Rettig has had loads of time and many cooperation to start the crucial work of fixing the IRS. There must be real accountability. President Biden must replace Mr. Rettig immediately and in addition nominate a Chief Counsel for IRS.”

— CNBC’s Kate Dore contributed to this report

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