IRS Breach Exposes Household Data

The data from tax returns for roughly 100,000 households was stolen by cybercriminals who used the IRS’s online services to hack the database, the IRS said yesterday (May 26).

Although this breach is large, the impact could have been close to twice as bad, as the agency indicated there were around 100,000 unsuccessful attempts as well.

“We’re confident that these are not amateurs,” IRS Commissioner John Koskinen told the Associated Press. “These actually are organized crime syndicates that not only we but everybody in the financial industry are dealing with.”

The IRS said the issue is being investigated by the IRS Inspector General for Tax Administration and its Criminal Investigation unit, The Wall Street Journal reported. To respond to the hack, the IRS also announced it would provide free credit monitoring services for those impacted; those taxpayers will be notified directly by the IRS.

According to the AP’s report, the cybercriminals used a system called “Get Transcript,” which is a place taxpayers can access tax returns from prior years. The thieves were able to override a security checkpoint that includes information about the taxpayer  — which included data like Social Security numbers, birthdates, tax status, and street addresses.

Koskinen also spoke toward the increased efforts by ID thieves to target tax fraud refunds, which cost the IRS $5.8 billion of fraudulent returns in 2013 alone. And as the cybercriminals become increasingly sophisticated, their ability to clear authentication hurdles could remain a tough force to combat for the IRS.

“Eighty percent of the identity theft we’re dealing with and refund fraud is related to organized crime here and around the world,” Koskinen said. “These are extremely sophisticated criminals with access to a tremendous amount of data.”

While the IRS continues to investigate the hack, it’s already catching flack from some members of Congress for the breach.

“That the IRS — home to highly sensitive information on every single American and every single company doing business here at home — was vulnerable to this attack is simply unacceptable,” said Utah Republican Sen. Orrin Hatch, chairman of the Senate Finance Committee, according to the AP. “What’s more, this agency has been repeatedly warned by top government watchdogs that its data security systems are inadequate against the growing threat of international hackers and data thieves.”

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