Hackers stole data on 100K taxpayers from IRS

The Internal Revenue Service announced Tuesday that hackers gained access to old tax returns for more than 100,000 taxpayers.

The tax agency told reporters that hackers were able to use personally identifiable information obtained elsewhere to access old returns contained on the IRS website.

Returns for roughly 104,000 taxpayers were accessed by what appear to be organized crime syndicates, according to IRS Commissioner John Koskinen.

{mosads}He added that the attempts to access old returns via the “My Transcript” IRS Web service appeared to be part of larger efforts to file fraudulent tax returns and claim illegitimate refunds.

“We’re confident that these are not amateurs, that these are actually organized crime syndicates,”  Koskinen said.

The IRS has shut down that particular  service to beef up its security, and the agency will be providing free credit monitoring services for the 104,000 taxpayers affected.

All told, there were attempts to access old returns for 200,000  taxpayers, with roughly half of those efforts succeeding, according to Koskinen. All 200,000 taxpayers targeted will be notified. The breach occurred during and after the latest tax filing season, between February and mid-May. During the 2015 filing season, the “My Transcript” service was used 23 million times.

While a criminal investigation isn’t complete, Koskinen said the apparent goal in gaining  access to old returns was to assist the filing of future fake returns.

“They’re trying to get better information so they can file a better false return,” he said.

He emphasized that the hackers had to obtain sensitive personal information, such as Social Security numbers and addresses, from elsewhere before trying to gain access to the IRS website. In addition, the hackers would have needed other personal information to correctly answer security questions.

He said that the IRS’s main cache of personal taxpayer information is secure.

“This is not a security breach. Our basic information is secure,” he said. “These are criminals who had enough data to try and impersonate the taxpayer.”

There were early indications that the IRS, which has sparred with lawmakers about the size of its budget in recent years, could be in for another Capitol Hill conflict.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) called the breach “simply unacceptable,” adding that his panel was working on identifying what information was stolen.

“This agency has been repeatedly warned by top government watchdogs that its data security systems are inadequate against the growing threat of international hackers and data thieves,” he said in a statement.

Hatch said he learned of the hack last week from Koskinen.

Updated at 4:44 p.m.