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IRS Data Security Still a Concern
Lucas123 writes "Computerworld has a story about the possibility and the potential ramifications of an IRS data loss similar to the UK's recent mishap. According to one World Bank executive, it could have already happened, 'and we don't know about it.' While the IRS does offer data encryption to its workers, more than half of its 94,000 employees have permission to take taxpayer information to locations outside the IRS offices. In the 2007 filing season, roughly 128 million individual tax returns were filed. In addition to the basic personal information on those forms, an IRS breach could also jeopardize the banking information of the 46% of filers who requested direct deposit refunds. This is not the first time that IRS security has been called into question, and the Department of Treasury's progress in that arena is dubious. [PDF]"
Seems like the best way to solve this problem would be to remove any and all possible chance that the IRS might mishandle our data...
...more than half of its 94,000 employees have permission to take taxpayer information to locations outside the IRS offices.
It seems to me that most of the data breaches from large corporations and government come from just this - employees taking data files out of the office and losing them. Why of why don't employers simply insist that data stays on the premises? Surely keeping data in a secure physical location is the first step to safeguarding it.
Three Squirrels
In my case I had to take things as far as two members of the board to stop an accountant taking the laptop with the only functioning copy of the application that handles most of the financial information on holiday
I hope your board members recognized the four more important problems as well. Your top five problems:
(1) Management allowed (2), (3), (4), and (5).
(2) The accountant allowed (3) and (5).
(3) You have one and only one system capable of running a critical application.
(4) This critical application is not being run on enterprise grade hardware.
(5) The accountant wanted to take the system on holiday.
If your board only addressed the laptop/holiday add:
(0) Board allowed (1), (2), (3), (4), or (5) as appropriate.
And of course any subpoena, court order, or National Security Letter presented to Intuit has full access to all your data, including aggregation (database "join" on SSN, phone, address, etc.) with various data brokers who market their services aggressively to Department of Homeland Security, etc. With the IRS itself you have some protection; with the e-file cabal you nave none.
How exactly will 46% of filers banking information be comprimised? -
From TFA "That translates to a lot of personal and banking details maintained by the IRS." - Those banking details are the same ones you hand out every time you write a check.
The information included on the return for direct deposit is 'exactly' the same information printed on the front of a check in human readable format.
If ANY of those households paid with a check to any retail establishment (where the clerk probably makes less than $10.00 an hour) then they have already released this information themselves.
I understand data security and the problems of taking confidential data out of the workplace, but the banking details portion of this story needs to be taken with several grains of salt.
Just because you have a banks routing number and a checking account number, this does not mean you can turn that into cash at an ATM.
A question and you are likely to get 10 different answers that may or may not be correct.
How the IRS is allowed to operate the way it does is beyond me. How the tax laws are allowed to remain so confusing and frustrating is beyond me. But, obviously it is not cost effective to those that matter to fix it.
If the tax laws were cleaned up, then maybe IRS employees might be able to handle many more individuals per specialist. If the tax laws were cleaned up, then maybe the IRS would be able to do all of its work at work. Just maybe.
InnerWeb
Freud might say that Intelligent Design is religion's ID.
Full Disclosure: I work for the IRS, and have a business need to take OUO or SBU data outside of the campus where I work from time to time.
Glossary:
The article here is pure scaremongering, though it does at least touch on some of the procedures the Service used to secure taxpayer data. The article makes the following points.
When a laptop is issued, it gets whole disk encryption that can't be turned off by the user. Similarly, when the IRS issues other portable devices, they get the same. The rule, of course, is that you don''t hook up anything the IRS doesn't own to anything it does, so personal thumb drives and home networks should not be an issue, and we make the point every time we issue hardware. Similarly, the article talks about unencrypted drives on Campus machinery, but if someone has penetrated the physical security of the Campus and actually swipes one of these hard drives, things have already gone horribly wrong.
If the IRS lost a great whacking load of SBU data, of course it would be a disaster, this is nothing new, and is obvious. The article makes it seem like it's inevitable or in immediate danger of happening, and this just isn't true.
It may not be just, but it is fair, and that is more important.
I used to work for a check printing company, and I can tell you that the most common type of check fraud is where someone orders checks with someone else's routing and account information. If you have a person's income tax statement complete with name, address, and bank account information, then you have all you need to order fraudulent checks. Heck, you could even have your name printed on them, but have the fraudulent account number info on the checks. You'd be surprised how easy it would be to cash such a check.
Not that I would recommend it: we, at the check company, were taught certain red flags, things to watch for that may indicate a fraudulent order (and a good CSR won't let it on that they suspect you), and I won't go into those details here. And the penalties are pretty stiff if you are caught.
Intelligent responses welcome, flames will be met with marshmallows.
The United States has a system called the Automated Clearing House (ACH) network that is used to move deposits and payments electronically between banks. If you have any ACH items hit your account, Regulation E kicks in giving you as a consumer certain rights about how soon you must report bad or fraudulent items before you are out of luck (60 days from the statement that the item appeared upon).
An ACH transaction != financial identity. If I have that information about you and have access to the payment system, I can fraudulently send out ACH items and hope to collect enough to make it worthwhile before I'm shut down. This information, however, does not allow me to open a loan or credit account in your name. It sucks, but it's not identity theft.
I'm sure that the UK does also have some sort of an electronic transaction system, but I've got no idea about what it is and how it works. You guys have a different style of banking than we do in the US. We have a few major, major players, but also a very large number of small "community banks" and credit unions. The ACH network in the United States was set up as a clearinghouse to basically send transactions to a large number of different banks. If I understand things correctly, the UK doesn't have the smaller financial institutions like we do, so the electronic transaction systems may work differently there (to say nothing of the regulations defining how they work!).
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
You can set up a fraudulent direct debit with just the account number and sort code. I had someone do that to me once - 86p to Carphone Warehouse. It did get refunded immediately when I complained.