Report: Taxpayer data might be at risk

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Taxpayers’ personal data is vulnerable to disclosure because the Internal Revenue Service is failing to track all the contractors that store and process the information, and the agency is not fixing previously identified security weaknesses fast enough.

A new audit report by the Treasury Department’s Inspector General for Tax Administration (TIGTA) states that Social Security numbers and tax return information is among the data that is at risk. The report states that the IRS was encouraged in 2009 to correct security weaknesses at eight contractor facilities. So far, the IRS has prepared a strategy to fix the problems at only one of the locations.

“Without adequate oversight to monitor and confirm that security weaknesses are corrected at contractor facilities, security weaknesses will persist and taxpayer data will remain at risk of unauthorized access and disclosure,” the report states.

Also, the report says that the process of identifying all the contractors that have access to taxpayer data is ineffective. Contractors must comply with federal security requirements, and the IRS must conduct annual reviews to ensure compliance. Now, IRS business organizations are asked to identify their contractors. Auditors said that the process missed two individuals who should have undergone security checks.

“The IRS needs to improve its current processes and controls to identify all contractors who process, manage, or store IRS taxpayer data at contractor facilities and to ensure timely corrective actions are taken to correct security weaknesses,” said Treasury Inspector General for Tax Administration J. Russell George in a statement. “It is imperative that taxpayer data be protected from unauthorized access or disclosure at all times.”

TIGTA recommended that the IRS implement a better system to identify contractors receiving and using taxpayer data at contractor facilities and that the agency improve its system for monitoring security weaknesses at such facilities to ensure the problems are corrected quickly. IRS officials agreed with the recommendations.

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