Mellon Bank Tax Return Problem Gets Worse

Earlier this year it was disclosed that, in the spring of 2001, employees at Pittsburgh's Mellon Bank tax processing center, responsible for processing tax returns for the states in the northeast, hid and in some cases destroyed by shredding at least 40,000 federal income tax returns and accompanying payments.

The amount of the destroyed tax return checks was estimated to be at least $810 million.

Now it appears that the number of mishandled tax returns exceeds 70,000, with an estimated $1.2 million in accompanying payments.

Mellon Bank lost its contract with the IRS to collect and process tax returns.

Affected taxpayers are not being penalized by the IRS. So far, the IRS has spent approximately $2 million to straighten out problems caused by the mishandling of tax documents.

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.