IRS Data Files May Not Be Secure

The General Accounting Office, Congress's watchdog agency, has published a report citing security lapses in the Internal Revenue Service computer system. The report cites the IRS for failure to "implement adequate computer controls to ensure the security of its electronic filing system."

The GAO study was conducted a year ago, and IRS Commissioner Rossotti has indicated that some of the problems uncovered in the report have since been corrected. Mr. Rossotti has stated that the e-file system in particular is now safe.

Although the report focused on the e-file tax return filing program, the report also indicated that other data collected from taxpayers by the IRS is at risk, with both individual and business information accessible by hackers.

GAO "hackers," using nothing more than hand-held wireless personal digital assistants (PDAs), were able to retrieve Social Security numbers and other sensitive information from e-file returns. In addition, GAO auditors unearthed weaknesses in the IRS computer system which included improperly configured operating systems, inadequate password protection, and lack of encryption on elecronically filed tax returns.

In addition, the GAO discovered that the IRS issued over $2 billion in refunds last year to taxpayers who filed tax returns electronically but who did not sign or otherwise authenticate their tax returns.

The GAO will conduct a follow-up study after this tax filing season.

You may like these other stories...

Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.