IRS loses track of computers

[InfoSec News <isn () c4i org>]

http://www.fcw.com/fcw/articles/2002/0819/web-irs-08-19-02.asp

By Colleen O'Hara 
Aug. 19, 2002

The Internal Revenue Service can't account for computers that it lent
to volunteers who help the elderly and others prepare their tax
returns, according to a Treasury inspector general's audit report.

The Aug. 13 report from the Treasury inspector general for tax
administration comes on the heels of well-publicized reports of
missing laptops from the Justice Department, the U.S. Customs Service
and Defense Department.

Under its volunteer programs, the IRS lends about 6,600 desktop and
laptop computers with tax preparation software to volunteers located
at 18,000 sites nationwide. However, the IG did not specify how many
machines might be unaccounted for.

The volunteer programs help encourage e-filing and are designed to
assist elderly people and others who can't afford to pay for tax
filing assistance. For the 2001 tax-filing season, volunteers prepared
about 1.1 million tax returns, and more than 700,000 of those were
done electronically, the audit said.

The IG audit found that the IRS:

* Cannot physically account for computers provided to volunteers. For 
  instance, IRS did not ensure that computers obtained from external 
  agencies, including the military, were immediately recorded in its 
  inventory system.

* Did not ensure that taxpayer e-file data was removed from volunteer 
  computers at the end of filing season 2001. The IG could not 
  determine how many taxpayers whose e-file data may not have been 
  adequately protected from unauthorized disclosure or misuse.

* Did not ensure that only authorized software was loaded on volunteer 
  computers when provided. Some computers had software other than 
  operating systems and the tax preparation software.

The IRS agreed with the IG recommendations and said it would take 
action. Among the agency's plans:

* Perform a complete inventory assessment and validate the equipment 
  used in volunteer tax preparation programs.

* Temporarily suspend the acquisition of equipment from external 
  sources.

* Issue instructions to territory managers to delete all taxpayer data 
  from volunteer computers after a filing season.

* Pursue a legislative change to allow the transfer of computer 
  ownership to organizations that deliver volunteer tax return 
  preparation.



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