Aug 29, 2001 Senate Committee Says Missing IRS Returns at Pittsburgh
Facility Growing to 40,000 or More
By Curt Anderson
The Associated Press
WASHINGTON (AP) - At least 40,000 federal tax returns and payments involving
$810 million were either lost or destroyed at a Pittsburgh processing
facility. Senate Finance Committee Chairman Max Baucus, D-Mont., said
Wednesday a previous estimate of 1,800 lost or destroyed payments was "only a
small fraction" of the actual total now acknowledged by the Internal Revenue
Service. "It may be six months or more before the scope and magnitude of this
problem is fully known," Baucus said. The tax returns and payments were sent
by taxpayers in New England and parts of New York this year to a Pittsburgh
lockbox run by Mellon Bank under a contract with the federal government.
Earlier this month, Mellon lost its contract to run the facility following
what the bank's chairman called "gross disregard" and failure to follow
company policy by some employees. The IRS and the Treasury Inspector General
for Tax Administration are investigating the incident, which Baucus said
appears to be confined to the Pittsburgh facility. IRS officials declined
comment Wednesday on the probe but said they are working with taxpayers to
address any problems. It remains a mystery exactly what happened to the
returns and payments or whether the incident was deliberate or a mistake. All
that investigators or Mellon Bank will say publicly is that it does not
appear to be a case of identity theft, stolen checks or disclosure of
sensitive taxpayer information. Mellon's Chairman and Chief Executive
Officer, Martin McGuinn, said in an e-mail that "several" bank employees were
fired after an internal probe found taxpayer submissions that were "hidden,
and in some cases, destroyed." Loss of the contract resulted in layoffs of
106 other employees. The investigation began after taxpayers began contacting
the IRS when their payment checks had failed to clear. Sen. Charles Schumer,
D-N.Y., said the agency has now received 22,000 complaints of uncashed
checks. Affected taxpayers submitted tax returns and payments this year to
the Pittsburgh lockbox from Connecticut, Maine, New Hampshire, Vermont,
Massachusetts, Rhode Island and parts of New York outside of New York City
and Nassau, Rockland, Suffolk and Westchester counties. Also potentially
affected were taxpayers from those areas who submitted estimated tax payments
and those who made payments along with a request for an extension to file
their returns. Baucus said "an untold number" of taxpayers likely aren't even
aware that their returns and checks were lost or destroyed. He recommended
they review bank records to determine if any check sent to the IRS failed to
clear. The IRS has already set up a special unit to handle these cases.
Taxpayers who suspect they may be affected should call the agency at
1-800-829-1040. The IRS is asking them to stop payment on the uncashed check
and send a new return and check to the IRS service center in Andover, Mass.
The IRS will treat a replacement check and return as filed on time from
affected taxpayers, meaning they won't owe any penalties or interest.
Taxpayers can also get reimbursed by the IRS for any bank fees by filing IRS
Form 8546. ^---- On the Net: IRS: http://www.irs.gov ^---- Affected taxpayers
can contact the IRS directly by mail: Internal Revenue Service Post Office
Box 9936 Andover, MA 01810 Attn: Nancy Green, Stop 321 AP-ES-08-29-01 1750EDT
This story can be found at : http://ap.tbo.com/ap/breaking/MGA4VPCNZQC.html
