GAO Criticizes IRS Over Serious IT Deficiencies

wiredmikey writes with an analysis of a GAO report on the dismal failure of the IRS to implement secure IT practices. From the article: "The Government Accountability Office has blasted the Internal Revenue Service for failing to implement stronger security measures after a succession of dismal reports on the subject. In a report issued to the Secretary of the Treasury last week, the GAO said that the IRS had met just 15 percent of the 105 previously reported recommendations where information security is concerned. Taking a blunt approach, the GAO said that the IRS 'lacks reasonable assurance as to the accuracy of financial information or the adequate protection of sensitive taxpayer information.' ... It also said it would issue a limited distribution report to the IRS that addresses details omitted from this most recent report due to the sensitivity of the information."

Comments

Celebrity tax return snooping

[Compaqt]

I can't find the link after a few minutes on Google, but a couple years back there was news that some IRS employees were using their computer systems to snoop on celebrities and read their tax returns.

This report seems basically like confirmation that once you're on the system, you can do whatever you want.

I think a basic precaution would be that you have to know both the social security number and the name in order to open a file.

Re:Celebrity tax return snooping

[Compaqt]

Speaking of which, does anybody find it strange that whenever someone does something the President doesn't like, he gets audited by the IRS? Nixon did it, so did JFK, and the coincidences continue.

Re:Celebrity tax return snooping

[jellomizer]

The key issue is with IT workers we work at a level that is behind the software audits. And really how much is the right balance of using our tax money to make the IRS more secure?

You can go all out spend billions of dollars for massive audits and an infrastructure that can handle everything to make sure nothings slips by the cracks. Or spend millions of dollars to make sure the common stuff doesn't get by and only a few slip by.

You can just do nothing and figure we have invested enough already.

We have this strange notion that the government needs to be infallible in everything, then we complain that they are not spending their money wisely.
Most of the government waste goes to "Covering their asses" Not so much in corruption where we are spending money to help hide a political figure from his mistakes but in a process that tries to make sure there are no mistakes where everything needs to go up and down the entire chain before it gets approved.

We have all heard of the $900 toilet seat. It isn't the fact the vendor was selling the seat for $900 but because Maintenance Worker A see a seat that needs to be replaced. Spend 15 minutes writing a form to request it, his manager has to read it look at the seat verify that it needs to be replaced, then approves the form brings it further up Where people look at the seat try to find the most cost effective vendor for the seat, debate whether they should just get a cheap $5.00 one that will last 5 months or a nice one that will last for years. After all this and a month later the seat comes it. Why all this for a $20 medium quality seat. Because if they found out the Maintenance Guy A has been spending government money to buy $30 seats where they could have gotten one for $20 would cause an issue where either the Maintenance Man would get fired or his direct boss or further up, depending who is the best at pointing fingers.

Re:Celebrity tax return snooping

[jackbird]

Actually, no. The $600 Toilet seats were for an aircraft (E3 Hawkeye?) that had a non-standard sized seat that had to conform to various weight and durability requirements. The contractor that originally supplied the seats no longer had the tooling from their original production run, so making replacement seats became a matter of starting a small-batch production run with large startup costs (making molds, etc.).

EDIT: http://en.wikipedia.org/wiki/Toilet_seat#U.S._Navy.27s_.22.24600_Toilet_Seat.22 will tell you all you need to know. I had some details wrong above, but the actual story looks even better for the military.

Identity theft?

[mosb1000]

Should I be thinking twice about filing my taxes? It seems like there's a pretty big risk for identity theft.

Re:Identity theft?

[Anonymous Coward]

Should I be thinking twice about filing my taxes? It seems like there's a pretty big risk for identity theft.

Actually, you want to file as early as you can. One of the biggest identity theft targets is tax refunds: steal someone's SSN, and file. I've seen cases where the refund was sent to completely different States than where the real taxpayer lives. The IRS doesn't check DOBs, either so don't count on them not knowing that as a defense.

And what do you do when that happens? Call the IRS and then they "investigate" while you go round and round with their customer service. So, be sure to call your Congressman and Senator if it happens. Their offices are pretty good at shaking up Government agencies.

why bother with IRS?

[roman_mir]

With all the inflation created by the Fed to feed the ever hungry Treasury, why bother with the IRS? Here is a cost cutting for you: abolish the IRS and just keep counterfeiting. There is no difference. IRS is just a token dep't, existing for the sake of existing, today, that government only collects a small part of its expenses in taxes and borrows and prints the rest.

You KNOW the final result of this government agenda. The final result is massive inflation (maybe even hyper inflation). What difference does it make if you collect a few percentage points of your expenses in taxes, while the most of what you spend you print directly (QE) or indirectly - 0% interest at the discount window given to the banks, so they can buy US Treasuries?

USA can never repay its debt with honest money, it is going to monetize the debt and destroy the value of USD further. Since 1913 the value of USD has come down by 99%, what's the big deal about the 1 remaining percent? What's so special about it?

Since 1971 the end result was pre-determined. The fiat currencies of the world were going to come to a disgraceful end. Today in Greece they already don't bother with the fiat, people on the streets already found ways to exchange their labor and products/services by using other means of exchange, store of value and unit of account (all this to avoid the austerity imposed by the banks upon the country and to avoid the taxation.)

Greeks are doing it right.

At some point everybody else will wake up and do it right too.

Re:why bother with IRS?

[Anonymous Coward]

Hi. A quick economics lesson. Money has no intrinsic value. Frankly, even gold does not have an intrinsic value close to what it represented when it was used as our reserves. Money represents goods and services. If all of the goods and services went away, you would have worthless paper. If we had a gold reserve, your gold would be worthless as well.

I hate the debt. But things like the "USD has come dwn by 99%" are close to being accurate (it is actually more like 95%) but misleading. We have this thing called inflation. If good X costs 50 times what it did in 1913 but we are making 50 times as much as we did in 1913, it is a wash. A little inflation is healthy for an economy. Remember, money has no intrinsic value... it only represents goods and services.

So, if you are arguing that we only have 1% of the purchasing power as we did in 1913, you are far, far offbase.

No, a "fiat" currency does not spell the end of a currency. Hate to break this to you, but currencies were devalued long before governments went off the gold and silver standards. When people argue that floating currencies caused the overspending problem, they simply disqualify themselves from being taken seriously. Floating currencies simply mean that these adjustments take place automatically on a daily basis rather than waiting for official proclimations of a currency's value. The gold standard was simply and intermediary step between the fixed and fully floating regimes. Gold is not some magical device that afforded protection against bad gov't policy.

So while I do think our country is spending itself into oblivion, and we will have inflation in the double digits or a SERIOUS devaluation event. But the Ron Paul arguments as to the cause are just plain silly.

Re:why bother with IRS?

[MyLongNickName]

I was the AC to whom you replied (too lazy to log in).

Good question. I don't know exactly when it will happen. If you look at a country with a large trade imbalance and large external debts, you will see the currency decline in value. This brings the trade imbalance back in line and eventually the currency finds its proper value. Quite beautiful mathematically.

So why is the dollar not declining? It is used as the reseve currency for many, many nations. In fact, it represents about 60-70% of the world's reserves. The dollar is viewed as the most stable world currency and its markets are freer than most others. I am struggling to find a world-wide reserve amount, but China is said to have $3 Trillion by itself.

So what does this mean? It means that there is a huge external demand for the dollar that causes its value to be higher than it would otherwise. The downward pressure of our deficits is being (mostly) counteracted by increasing foreign dollar reserves.

Three scenarios are theoretically possible
1) Everything continues as it is now. Countries continue to grow and continue to use the dollar for their reserves and those reserves increase. Good news for Joe American consumer.. he can spend like a pig and never feel the consequences of rising prices.
2) Countries flatten out their demand for dollars. This could happen if countries just stop growing quickly (China, India) but don't change their reserve mix. Or countries continue to grow but rely on the Euro or other currencies. Joe American would see increased prices over a long period. Softer landing, but definitely a reduction in buying power.
3) Countries dump the dollar as their reserve. There are a lot of countries that would love to do this, but what really holds them back is that it would hurt them in the process as well. You dump trillions of currency at once, and the value of what you are dropping... well... drops. Joe American would suddenly see dollars worth 30-50 cents before the dump. Call this one the crash landing.

Hope that helps!

Congratulations, GAO!

[Gravis Zero]

GAO, you have just won a FREEEE AUDIT!!! :)

india

[rim_namor]

just outsource the entire IRS IT stuff to India, I think that'll fix everything in a hurry.

Funding??

[CMYKjunkie]

I work for the government and thus know how horrible our IT is in general, but I find the typical reason is one word: FUNDING. yes, GAO can make fantastic recommendations that absolutely should be implemented. It's not that government staff is populated by buffoons or people who could care less about modern processes/equipment, security, privacy, etc etc etc. What typically happens is that recommendations, mandates, or best practices are given to the agency in question, but $0 are committed by the purse holders to make the changes required. So.... who is ultimately responsible for the implementation?

Re:More money to the IRS

[DudeTheMath]

Amen! Congress has been starving the IRS of funding. The ROI to the federal government in terms of successful audits of the biggest tax cheats is huge, but with a tiny budget for audits, the IRS can't take on as many of the "big fish" who can mount strong defenses; it only has the resources to go after the minnows, even though there isn't much meat on them.

A 2010 report from the Transactional Records Access Clearinghouse found that the audit rate of large (> $250M in assets) corporations dropped from 42.6% to 25% since 2005, and that for huge (> $5B) corporations dropped from 78% to 64% since only 2007. Do you think this is because of increased compliance? Ha. Ha.

Also see this 2008 OMB Watch report.

MOD PARENT UP...and one more thing

[BenEnglishAtHome]

The ROI for the IRS is, indeed, fantastic.

So keep this in mind - Any politician who says they want to reduce government debt but who does not also say they are willing to fund the IRS to the level it needs is a liar.

Revenue Officers, even new ones, bring in 3 to 20 times their salary (sometimes much, much more) per year. So why aren't we hiring more Officers and Agents and all the support people they need? Because politician are liars, people with no integrity who will say whatever it takes to get elected whether it makes sense or not. Here's the most basic test I can think of - Any politician who says they want to abolish the IRS is too stupid to carry out any job more complex than janitor (and I really hate to insult janitors by suggesting politicians could do their job). Don't vote for them.