A new report from the Treasury Inspector General for Tax Administration found that the IRS is "not in compliance with Federal electronic records requirements and regulations" regarding Freedom of Information Act requests, litigation holds, and other requests.

The IG released its report on July 13.

The chairmen of the House Ways and Means Committee and Senate Finance Committee requested the audit to determine the IRS’s policies for record retention and whether the policies comply with federal requirements, as well as "determine whether the IRS’s practices for responding to Freedom of Information Act requests, litigation holds, and congressional requests ensure that responsive records are retained and provided according to Federal requirements."

In a section headed "Record Retention Policies Are Not Compliant With Certain Federal Requirements," the IG wrote:

The IRS's current e-mail system and record retention policies do not ensure that e-mail records are saved and can be searched and retrieved for as long as needed. Additionally, repeated changes in electronic media storage policies, combined with a reliance on employees to maintain records on computer hard drives, has resulted in cases in which Federal records were lost or unintentionally destroyed. Examples from our case reviews show that it is especially difficult for the IRS to retain information from employees who have separated from the IRS.

The report went on to note that the agency's electronic media stories had changed repeatedly since May of 2013 and had an adverse effect on record retainment. It was that month that the IRS was found to have "targeted" some conservative groups seeking tax-exempt status for extra scrutiny.

The IG cited one example where the IRS destroyed a laptop potentially containing evidence in a litigation case:

We found that when an employee separated from the IRS in August 2014, the employee left his laptop with his secretary. That employee was under a litigation hold to ensure that relevant evidence was preserved for use in litigation. However, without a policy in place to ensure that laptops of separating employees under litigation holds were maintained, that laptop was sent to the IT organization for standard sanitization and disposal.

The report concluded IRS policies do not comply with some federal requirements that agencies must "ensure that all records are retrievable and usable for as long as needed."

The report also found that in more than half of 30 completed FOIA requests, "the IRS did not follow its own policies that require it to document what records were searched. TIGTA also found that IRS policies for preserving records from separated employees were not adequate."