IRS Data Breach Sets Off Alarms

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://www.cpapracticeadvisor.com/news/12077796/irs-data-breach-sets-off-alarms

A serious security breach at the IRS has the agency scrambling to beef up
its ID theft efforts while the public and lawmakers stew. The IRS announced
on May 26 that hackers had gained access to the personal information of
more than 100,000 American households through its “Get Transcript”
application.

According to IRS Commissioner John Koskinen, who spoke to media at a press
conference, the identity crooks were successful in about 104,000 attempts
to gain information from February through the middle of May. Another
100,000 hacks failed. There were no other breaches outside the Get
Transcript program.

The incident comes on the heels of other cyber breaches in certain states
earlier in the year. It points out the dangers facing the taxpaying public
and the growing strength of the criminal element the IRS is up against.

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

The Get Transcript application enables taxpayers to gain access to returns
from previous years. Once they accessed this data, the thieves used it to
file fraudulent returns that provided a refund to a debit card. The IRS has
temporarily shut down the Get Transcript app while the breach is being
investigated.

Hackers have used the data to obtain almost 15,000 refunds for a total of
nearly $50 million. But it is believed that this isn’t the end of the
story. The IRS admitted that some stolen tax transcripts might have been
set aside with an eye towards using them for ID theft next tax filing
season.

In order to access the accounts, the crooks had to provide specific
information, including a taxpayer’s Social Security number, date of birth,
tax filing status and address. In addition, the process requires you to
answer some personal questions, such as the name of your high school’s
mascot. Koskinen indicated that social media may have aided the thieves in
this regard.

“This is not a hack or data breach. These are impostors pretending to be
someone who has enough information” to get more,” he said. He then
suggested that the crooks may be relying on other sophisticated programs to
mine and collect this data.

However it is characterized, both the Treasury Inspector General for Tax
Administration (TIGTA) and the IRS’ Criminal Investigation unit are
investigating the intrusion. In the meantime, the IRS has announced that it
will provide free credit monitoring services to victims and will notify the
taxpayers involved in the unsuccessful attempts. It also has emphasized
that the thefts didn’t involve its core system. “During this filing season,
taxpayers successfully and safely downloaded a total of approximately 23
million transcripts,” the IRS said.

Nevertheless, vocal members of Congress – led by Senator Orrin Hatch
(Rep.-Utah), chairman of the Senate Finance Committee (SFC) and House Ways
& Means Chairman Paul Ryan (Rep- Wis.) – are both alarmed and irate.
Changes could be coming at the tax collection agency.

_______________________________________________
Dataloss Mailing List (dataloss () datalossdb org)
Archived at http://seclists.org/dataloss/
Unsubscribe at http://lists.osvdb.org/mailman/listinfo/dataloss
For inquiries regarding use or licensing of data, e-mail
        sales () riskbasedsecurity com 

Supporters:

Risk Based Security (http://www.riskbasedsecurity.com/)
YourCISO is an affordable SaaS solution that provides a comprehensive information security program that ensures focus 
on the right security.  If you need security help or want to provide real risk reduction for your clients contact us!