Kansas City missing 26 IRS tapes

KANSAS CITY, Mo. (AP) -- Twenty-six IRS computer tapes containing taxpayer information that were delivered to City Hall in August are missing, Kansas City officials say.

The tapes contain information the Internal Revenue Service and Kansas City share. City officials use the information to enforce collection of a 1 percent city earnings tax, which people living or working in the city must pay.

Foul play isn't suspected, although it has not been ruled out, said Assistant City Manager Rich Noll. Special equipment and software are needed to read the tapes, he said.

Kansas City officials did not know what exactly was on the tapes, including how many taxpayers might be included, and the IRS would not provide details.

IRS spokesman Michael Devine said only that the IRS and other taxing agencies share information to enhance voluntary compliance with tax laws.

Shared information can include taxpayer names and addresses, Social Security and bank account numbers and employer information.

City officials and special agents with the Inspector General's office of the Treasury Department are investigating. Officials are trying to retrace the tapes' trail.

Noll said the missing tapes were an entire shipment the city received in August.

Employee offices have been searched, but the tapes haven't turned up.

Charles said there's no documentation showing the tapes ever reached the city Finance Department, which would have reviewed them.

The investigation began after the tapes were not returned to the Treasury Department in a timely manner. Noll said he learned the tapes were missing in late December.

"We are cooperating in every way we can," Noll said. "We are continuing to search every avenue."

Noll said the city has taken steps to secure remaining taxpayer information. He wasn't aware of any other instance in which the city's taxpayer information came up missing.

Tax lawyer Stan Weiner said the situation in Kansas City could be serious.

"Anytime taxpayer information is lost, taxpayers need to be concerned," Weiner said. "They don't want this (taxpayer) information to be readily available."

Concerns about government handling of sensitive information have increased in recent years. In October, a U.S. House committee reported that federal workers at 19 agencies had lost personal information affecting thousands of people.

Hundreds of security and privacy incidents also have occurred at the Department of Veterans Affairs, according to the House committee.

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Information from: The Kansas City Star, http://www.kcstar.com