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IRS watchdog report says taxpayer data security is lacking

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The biggest recent scam story had nothing to do with taxes. It was the confession of a financial advice journalist of how she fell for an elaborate con job that ended with her putting $50,000 in cash in a box and handing it to a stranger.

The crooks kicked off that scam by calling the writer, recounting enough of her personal information to get her hooked. It was all downhill from there, with an outrageous combination of purported government agencies, including a CIA impersonator.

IRS security still suspect: We're all told to protect our data. To be careful about what we reveal to myriad entities with whom we interact each day. I mean really, why do my dentist and doctors need my Social Security number? Answer: They don't!

The bottom line from all identity theft experts is don't give out your data unless you positively, absolutely must.

But there's one place most of us are required to routinely hand over our most personal data. We deliver it every year to the Internal Revenue Service when we file our annual tax return.

And apparently, we all should be a bit concerned about how well the IRS protects our information, according to a report from the Treasury Inspector General for Tax Administration (TIGTA).

"[F]or some sensitive systems, the IRS does not have adequate controls to detect or prevent the unauthorized removal of data by users," noted the IRS watchdog in the report, entitled Assessment of Processes to Grant Access to Sensitive Systems and to Safeguard Federal Tax Information.

TIGTA report, IRS response: As is its job, TIGTA made several recommendations it says will close the taxpayer data security gaps it found.

They include TIGTA immediately suspending a contractor's access to sensitive systems when a background investigation of that person raises questions, as well as ensuring that user network and sensitive system access is removed for all who leave the IRS.

Access to IRS data_TIGA 06Feb2024 report graphic

As also is routine in TIGTA reports, the document includes an IRS response.

The agency agreed with many of the suggestions, including the three noted above. But the IRS rebutted some other TIGTA findings.

Melanie Krause, IRS chief data and analytics officer, said that "while the tax agency agrees with the report's recommendations, there are four areas where we respectfully submit that TIGTA's report does not accurately characterized the IRS's current security posture."

Krause elaborates on the IRS disagreements with the TIGTA assessments of IRS security. She also summed up the agency's stance, noting that "Collectively, IRS's security improvements have made the tax system more effective, efficient and secure as we adapt and respond to the many evolving threats to taxpayer data and the trillions of dollars that flow through the IRS each year."

I'll let you peruse TIGTA's analysis and the IRS counter arguments in the report, which earns this weekend's Saturday Shout Out.

Report reason wrapped up: I can't go off to other weekend pursuits, however without noting that, in an exquisite bit of timing, the Feb. 6 TIGTA report was released just days after former IRS consultant Charles Littlejohn was sentenced to five years in federal prison for disclosing thousands of tax returns without authorization.

The compromised tax data that was revealed in news reports was from filings by former president Donald J. Trump, and billionaires Jeff Bezos, Elon Musk, and Warren Buffett, among others.

It was the Littlejohn incident that prompted the TIGTA investigation.

With the report's impetus wrapped up, we'll see how long it takes the IRS and TIGTA to ultimately resolve the security follow-up situation.

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