Legally, I would think they would be obligated to retain 7 years of information at least in archival form. Those e-mails exist on backup tapes - a reliable and proven mass backup medium.
The IRS should be required to keep all correspondence as far back as taxpayers have to keep their tax returns.
Actually with Exchange Server, local files are stored in an .OST format. This is so people can work off-line while traveling (assumes Learner had a laptop with all of her sensitive IRS info on it). You can't view the contents of .OST files in Outlook without Exchange Server and an account. There are some kludgy utilities developed in someone's basement that purport to convert .OST files to the more open .PST format. If Learner used Outlook to "export" all of the data while everything was still available on the server, she could have saved it in a .PST file, but it would no longer communicate with her Exchange Server account.
Introduction to Outlook data files
Offline Folder files (.ost)Typically when you use Microsoft Exchange Server, your e-mail messages, calendar, and other items are delivered to and stored on the server. You can configure Outlook to keep a local copy of your items on your computer in an Outlook data file called an Offline Folder file (.ost). This allows you to use Cached Exchange Mode or to work offline when a connection to the Exchange Server computer may not be possible or wanted. The .ost file is synchronized with the Exchange Server computer when a connection is available.
The last sentence from Microsoft tells us the emails are still on the server. If a size limit is reached, the user must export some emails to a .PST file, then delete, or they can delete large attachments, etc. All of these actions create a log entry on the Exchange Server(s). An sysadmin could easily determine who did what and when. Everything is logged and logs are backed up so there's an appropriate disaster recovery window (logs are used for delta-backup recoveries [recovery from incremental backups]).