February 29, 2016

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IRS Data Breach Update: More Taxpayers Affected

Last year’s IRS data breach is continuing to make headlines as the true scope of its damage becomes clearer. The breach, which the IRS believes took place in February 2015, was first announced in May 2015; at the time, it was thought that more than 100,000 American taxpayers had their personal information compromised. However, in August 2015, the agency revealed the discovery of an additional 220,000 victims. Now, about one year since the initial breach, the IRS is saying that the current total number of victims is topping 700,000 — about seven times more than initial estimates.

The main IRS system that was compromised by the hackers during the data breach is called “Get Transcript,” and it is where tax payers can request tax returns and filings from past years. Using personal information stolen from other sources, the criminals were successful in clearing a security screen that requires a Social Security number, date of birth, tax filing status, street address, and other private data. CBS News reports that, in addition, hackers have also tried (and failed) to access an additional 600,000 IRS accounts.

Though the number of affected taxpayers has fluctuated greatly since the data breach was first announced, the IRS has kept the same opinion as to the identity of the responsible party. In May, the IRS said they believe a sophisticated criminal operation based in Russia is at the helm of this crime. No further information has been released about whether the agency knows more about this operation, or if they are doing anything to stop it.

Who May Have Been Affected by the IRS Data Breach?

As the number of affected taxpayers continues to grow, many Americans are worried that their private, personal information may have been stolen. The IRS says that if you have been targeted by the hackers, the agency will be notifying you and providing access to a program that assigns special ID numbers for future tax returns. It is believed that one reason the hackers targeted the IRS was to claim fraudulent tax refunds; by giving taxpayers a special ID number, they are hoping to prevent those fraudulent returns from going through the system.

Whether or not you were affected by this recent IRS data breach, it is essential to be aware of other potential tax fraud schemes. Tax identity theft is far more common than you might imagine — the IRS estimates it paid out $5.8 billion in fraudulent refunds in 2013. Before you file your returns this tax season, read our important blog about how to spot an IRS scam.

Image courtesy of Flickr user Tim Evanson.

Judy Leary

President at IdentityForce
For Judy, identity theft protection is in her DNA—her dad started IdentityForce’s parent company in the 70s, and in the 80s, she and her brother came on board. She loves her dedicated team and how much they care about every member, partner, and supplier. In addition to protection against identity theft, Judy is passionate about travel (Aruba is her “happy place”!) and giving back. She volunteers for the Alzheimer’s Association, Mazie Mentoring Program, and Sunshine Golden Retriever Rescue. She’s also a proud mom to 2 grown daughters and 3 rescue dogs.

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