Taxpayers, Beware: Identity Theft Threat at the IRS

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April 12, 2007 12:16 PM

The Internal Revenue Service is putting taxpayers at risk for identity theft by failing to protect taxpayers' social security numbers and bank account information, warns a recent report issued by the Government Accountability Office.

"The taxpayer's information is at risk for unauthorized disclosure to unauthorized individuals who could then potentially use it for identity theft," said Greg Wilshusen, Director of Information Security Issues at GAO.

Wilshusen says thousands of IRS employees who are not authorized to view taxpayer files can freely peruse them, leaving the door open for identity theft or other financial crimes.

"Information security weaknesses both old and new continue to impair the agency's ability to ensure the confidentiality, integrity, and availability of its financial and sensitive taxpayer data," said Wilshusen.

In a written response to the GAO, IRS Commissioner Mark Everson said that over the last year the IRS has made progress in addressing computer security deficiencies but said, "We recognize that continued diligence is required."

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GAO reported security flaws last year, and Wilshusen says that though some improvements have been made in password protection procedures, this year's GAO review found 66 percent of the security flaws remain.

Some of the most serious issues still need to be addressed, such as inadequate account lockout procedures and verification of IRS employee identity to access sensitive information.