Mellon(Bank) settles case over destroyed tax returns (77,000 IRS Returns)

[RamboLiberal]

http://www.post-gazette.com/pg/06230/714575-100.stm

Mellon Bank reached a settlement with the federal government under which it will not be prosecuted for having employees destroy tens of thousands of federal tax returns and payments.

Mellon Bank, a subsidiary of Mellon Financial Corp., accepts responsibility for the conduct of its employees and agreed to fully cooperate with the government's investigation into the destruction of the documents, U.S. Attorney Mary Beth Buchanan said today.

Mellon employees, feeling overworked and unable to meet their deadlines, destroyed more than 77,000 federal income tax returns and tax-payment checks at a company service center in Pittsburgh in April 2001. No taxpayers were harmed and there was no evidence of check fraud or identity theft, Mellon has said.

No penalties or fines were imposed against Mellon, but the company has already paid $18.1 million in restitution to affected taxpayers and the government. Mellon also will reimburse the federal government $30,000 for costs incurred by an outside vendor, the company said in a statement.

[rzemanfl]

1. I swear I never heard about this. n/t

[napi21]

2. I find it interesting that the IRS had contracted with Mellon to "Process

Tax Returns". I admit, I have been pleasantly surprised at how quickly I've received my refund deposited into my checking acccount for the last 3 years that I've been using e-filing. I honestly THOUGHT that the IRs had upgraded their computer system ans were just doing a great job! HAH! Stupid me! I didn't realize they had just outsourced the damn job to a bunch of 3rd party processors!

[rumpel]

3. but then...

what does the government do, when every agency, now even the IRS, outsources the responsibilities of government.

...and people wonder why there is identity theft...fraud and corruption

[napi21]

5. I guess the original intent of outsourcing everything was to reduce the

size of Gov't, but IT'S NOT WORKING! My son was in the Navy for 16 years, and he finally got so disgusted with the way things were being run he resigned. He took a job with a Navy contractor making 5 times what he was making in the Navy. He's sure not alone! I can't tell you how many guys have done the same damn thing, and somehow the Gov't thinks they're saving money?????

I really don't understand all this. The Fed Gov't hasn't gotten smaller, its gotten bigger, but they're doing less of the work??????????

[bleedingheart]

8. this was not "outsourcing" like you are used to...

this has been going on for years...and is probably still going on.

The checks are processed at banking centers that can both deposit and process checks. I do remember that checks were processed in regions far from where the checks originated. So checks from California were processed in Pittsburgh, in order to reduce the likelihood that someone might "help out a friend" by not processing a check and return. I remember that from the training.

I also know that the two centers that I knew of were in locations where Federal Reserve banks were located....don't know if that is a factor but may be..

Many full time employees at Mellon oversaw this process and there were always government folks there as well.

[napi21]

9. I understand the check processing, and see no problem with it.

From reading the OP it sure sounds like Mellon was "processing tax returns", processing the checks or deposits and THEN supposed to return the TAX RETURNS to the IRS. It's the processing of the tax returns that bothers ME!

I doubt having a Fed Reserve office in the same city has much if anything to do with this program. I wowrked at the Pgh. Fed many years ago (1974-1978) when almost ALL paper checks were processed through the Fed. The Fed really doesn't have anything other than a strict working relationship with any of it's member banks.

[eccles12]

4. And the rich get richer.....and richer.....

[bleedingheart]

7. checks are distributed to banks for processing...this has gone on

for at least 20 years...

I was one of them (see post below)....it was one of my college summer jobs.

It was one of my highest paying summer jobs at the time.

1. first check was entered into system with return, one bundle at a time.
2. these checks were then processed a second time to make sure that there were no mistakes.
3. a QA group then selected random bundles to make sure that they wre processed properly.

The IRS had the ability to:

1. fill out blank checks sent to the IRS (people did this to delay payment...big mistake)
2. sign the name of the person on the check (with propery stamping..etc)

You can't imagine the tricks people do to get away with not paying their taxes...

We got multiple breaks and lunch.

If you did your job and didn't babble or screw around, ...you would get your work done. If you were a chatterbox...and didn't work...you didn't last because of quotas they needed to have completed.

[bleedingheart]

6. I worked at Mellon in the late 1980's processing taxes

it was a summer job and I saw the quarterly tax returns of some very famous people....

I won't say their names, but...some folks paid hundreds of thousands in quarterly payments...

I learned a lot about the IRS back then ...enough to know they don't pull any punches..

A woman processing returns was arrested while I was at work for having "doctored" a tax check with her name and cashing it...