US Internal Revenue Service (IRS) data breach compromised 100,000 US taxpayers

April 7, 2017 12:52 pm

IRS Commissioner John Koskinen testifies before the Senate Finance Committee on Capitol Hill, in Washington, DC, April 6, 2017. (Photo by AFP)

The Internal Revenue Service (IRS) has confirmed a data breach that might have compromised the personal data of over 100,000 people.
IRS Commissioner John Koskinen told the Senate Finance Committee on Thursday that hackers had been able to file millions of dollars’ worth of fraudulent tax returns through exploiting a bug within one of its web-based data tools.
Apparently, the identity thieves were able to achieve their goal by harnessing a security flaw within the agency’s “data retrieval tool,” which imports financial records between the IRS and the Department of Education’s website to make the process less time consuming.
According to the official, the IRS had begun contacting the 100,000 victims who had their personally identifiable data stolen. The full scope of the data theft remained a mystery.
“Fortunately we caught this at the front end,” Koskinen told the lawmakers, stressing that protecting taxpayers and their identity was his “highest priority.”
The IRS had to issue about 8,000 fraudulent tax returns totaling roughly $30 million before disabling the tool last month.
Later on, investigators found 14,000 more fake returns. The agency had to halt another 52,000 suspicious filings.
“We caught it early enough that there’s not a significant volume of money out the door,” Koskinen testified, noting that the bug was found in October but they had to wait before shutting down the tool.
“To shut it down without a clear indication of criminals actually using it seemed to us that it was going to unnecessarily disadvantage millions of people who used it,” he argued.
‘Koskinen should step down’
Earlier this week, 15 members of the House Ways and Means Committee wrote in a letter to President Donald Trump that Koskinen had “lost the trust of the American people” and needed to be replaced.
The committee’s Republican chairman, Texas Representative Kevin Brady, said Wednesday that Koskinen was no longer trusted with his job.
“He has been dishonest with Congress, and the IRS — under his watch — has continuously violated taxpayer rights. He has to go,” he explained.
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