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IRS Gets Hacked Again, Forced To Scrap Their Entire PIN System (engadget.com)

The IRS has abandoned a system of PIN numbers used when filing tax returns online after they detected "automated attacks taking place at an increasing frequency," adding that only "a small number" of taxpayers were affected. An anonymous reader quotes the highlights from Engadget: The IRS chose not to kill the tool back in February, since most commercial tax software products use it... If you'll recall, identity thieves used malware to steal taxpayers' info from other websites, which was then used to generate 100,000 PINs, back in February... This time, the IRS detected "automated attacks taking place at an increasing frequency" thanks to the additional defenses it added after that initial hack... the agency determined that it would be safer to give up on a verification method that's scheduled for the chopping block anyway.

19 of 104 comments (clear)

  1. Re:in before by Anonymous Coward · · Score: 2, Interesting

    Some neck beard has to make a comment about PIN numbers!

    I've always been curious about the epithet. People have beards just on their necks? That's odd, but why should we care?

    It's like "mouth breather"-- we care about whether people breathe through their nose or their mouth or both? Why?

  2. All this crap... by Ecuador · · Score: 5, Insightful

    All this crap just because tax preparation companies throw lobbying money to keep the current system. Most Americans would not need to actually file for taxes, the IRS already has all the data it needs, but noooo we have to keep an obsolete industry going no matter the cost...

    --
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    1. Re:All this crap... by gtall · · Score: 2, Insightful

      You are blaming the wrong party, Einstein. Congress created the Swiss cheese that is the U.S. tax code. And the latest estimate is the sainted American people are skipping out on about $450 Billion in taxes they should be paying. That's enough to cover the yearly deficit.

      By the way, the IRS does not have all the data they need and they don't even have enough compute power to process what they do get. Congress has seen fit to starve them for the same idiot reasons you think they are to be held to account. If they did have all the info they needed, the tax cheats would be filing up for their court dates to explain to a judge why they skipped out on their taxes.

    2. Re:All this crap... by Anonymous Coward · · Score: 5, Insightful

      Posting AC for obvious reasons...

      I have a Hong Kong company that I own. Before I started it, I read the ENTIRE Hong Kong tax law. It was 187 pages - and each page was half English, half Cantonese. So about 95 US pages. It works, it's simple, it's direct, and it's 100% understandable.

      The US code is so confusing and so long and SO self-contradictory that the IRS doesn't even guarantee it's own calculations! If you ask them to do your taxes for you (which is entirely legal, they offer that service), and they do it wrong - you're still at fault for their error. One tax return, sent to 6 different preparers, will most likely end up with 6 different numbers owed - which may be different than what the IRS believes in the first place.

      The US IRS tax system is set up to make us ALL guilty of tax fraud so that, if nothing else, we could be arrested and jailed for that violation. We're vassals and servants, not citizens.

      It also explains why there are tens of thousands of armed IRS agents, equipped with REAL assault rifles (fully automatic, short barrel carbines) and other real military-grade equipment.

    3. Re:All this crap... by LynnwoodRooster · · Score: 3, Informative

      You are blaming the wrong party, Einstein. Congress created the Swiss cheese that is the U.S. tax code. And the latest estimate is the sainted American people are skipping out on about $450 Billion in taxes they should be paying. That's enough to cover the yearly deficit.

      Not quite. The US Debt as of 10/1/2015 (start of FY2016) was $18.15 trillion. It's now $19.26 trillion. So that's about $1.1 trillion added in 9 months, or about $1.46 trillion annually. About 4 times your estimate of uncollected taxes. That $450 billion would help, but would get nowhere NEAR to eliminating the actual annual deficit (not the fake, "on budget" number that's reported).

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  3. The Broken MS Windows fallacy. Try 250 accounts. by raymorris · · Score: 5, Insightful

    > Just lock down an account if too many wrong PINS are used

    The bad guys don't care which account they access. Suppose you limit it to four tries at a PIN. The bad guys try 250 accounts with four PINs each, not one account with a thousand PINs.

    Locking out the account rather than the attacker is just DOSing yourself. I like to call this the Broken MS Windows fallacy, because Windows does it.

  4. "SECURITY MEASURES" = "FINDING OUT" by CaptainDork · · Score: 3, Interesting

    This time, the IRS detected "automated attacks taking place at an increasing frequency" thanks to the additional defenses it added after that initial hack...

    The IRS is not alone in this. After entities get hacked, they implement tighter detecting tools and sigh with the false comfort that they "are on top of things."

    Look ...

    If your storage building is being ransacked and you put up security cameras that show people breaking in, you have not actually SOLVED anything if the thefts continue.

    It's not hard, folks: Get a goddam lock.

    --
    It little behooves the best of us to comment on the rest of us.
  5. Re:Crazy question by guruevi · · Score: 2

    You have a quarter billion (more if you include business) tax returns, most PIN being the birth year of the individual (common practice amongst accountants) or something equally stupid (1234, 0000). Since it is only used once a year, most people don't use a custom PIN like a bank card.

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  6. Re:Easy solution PIV by markus · · Score: 5, Interesting

    There are plenty of great second factor solutions. The better ones are really easy to use and provide a lot more security. But providers don't want roll out fancy new technology, and users are blissfully unaware of how security works, so they want the same thing that they have had for the last couple of decades.

    The upshot is that even when second factors are rolled out, we essentially end up with something no more secure than password and pin, whereas there are beautiful solutions such as FIDO U2F that are ignored.

  7. Trump's tax plan by Okian+Warrior · · Score: 3, Insightful

    All this crap just because tax preparation companies throw lobbying money to keep the current system. Most Americans would not need to actually file for taxes, the IRS already has all the data it needs, but noooo we have to keep an obsolete industry going no matter the cost...

    Donald Trump's position on tax reform eliminates much of the paperwork. If you're single and earn less than $25,000 or jointly earn less than $50,000 you pay no tax. Send in a single-page form and you're done.

    There's not a lot of federal income to be had from low wage earners, so it makes perfect sense to eliminate the extra work on both sides. Also, poor people don't have to spend money on tax filing services (H&R Block, et al).

    Poor people get to keep more of their money, the IRS has a lot less work to do (estimated 75 million households), and the federal government gets just as much revenue.

    Hillary Clinton doesn't have a unified plan to reform tax reporting (posted on her website).

    If you think this issue is important, elect Hillary and nothing will change.

    1. Re:Trump's tax plan by LynnwoodRooster · · Score: 5, Insightful

      The simpler the code, the harder it is to hide income. Eliminate 99% of the tax code (seriously, if it's more than a few hundred pages it's too complex), eliminate 99% of all deductions, and you will have a hard time hiding income - unless you operate an all-cash business (which, in itself, draws a lot of attention with the reporting of structured deposits, etc.)

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  8. Re:Easy solution PIV by cciechad · · Score: 2

    Makes sense. The only reason I thought PIV would be easier is it's a US government standard in use at most or all federal agencies and works on Linux/Mac/Windows out of the box. Very likely the IRS agents and staff use PIV cards to authenticate to IRS systems and obtain physical access to IRS buildings.

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  9. Re:The Broken MS Windows fallacy. Try 250 accounts by ShanghaiBill · · Score: 5, Informative

    That's why I noted the other criteria (SSN, Name, etc).

    In most companies, anyone who works in HR has access to name/SSN for all employees. Employees at hospitals and clinics have access to name/SSN of all patients. When I was in the military, my name/SSN was printed on hundreds of routine forms, often in triplicate. SSNs are not private information, and we shouldn't pretend that they are.

  10. Re:LOL by ArmoredDragon · · Score: 2

    You'd better hope the US doesn't decay too much or too far. One of the hallmarks of failed republics is to become an aggressor-state to prop up the failing system, and Canada would be a tempting and convenient target for US annexation and subsequent plundering of it's wealth and resources.

    Hmm...No, I think we already have plenty of maple syrup.

    The US has the very real potential to become the greatest threat to the world since Nazi Germany if it goes full-fascist/socialist-oligarchy, which is a distinct possibility if/when the US economy and currency collapses, particularly if there's a 'cult of personality' populist-demagogue type of leader like Trump in charge at the time.

    That's quite an if. Europe is much closer to that than the US is. Hell, in the bugger EU nations some 25% of their voters vote for actual self proclaimed fascists. And for all of the things you can say about Trump, fascist just doesn't fit at all. Sure, he's a loudmouth blowhard, and some people think that makes him dangerous, but it really doesn't.

  11. Re:Waste by LynnwoodRooster · · Score: 2

    The IRS won't accept liability for its wrong actions on your behalf. If it calculates your taxes wrong, you're liable for the error and penalties related - even though they did the work (and yes, you can ask them to do your taxes for you).

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  12. Re:LOL by tsotha · · Score: 2

    We don't spend money defending Canada. The US does maintain radar installations to pick up Russian missiles streaking over the pole, but that's not for Canada's benefit. Canada doesn't spend much on its military because there isn't any need - they maintain friendly relations with the US and everybody else is too far away.

    I would add it is a decision which could be revisited should conditions warrant. At the end of WW II Canada had the third most powerful navy in the world, behind the US and the UK.

  13. Re:Wise move by pete6677 · · Score: 3, Interesting

    That's because whenever a government agency decides to "save money" they do so in the dumbest possible way, which almost always costs them more later. Not that corporations never do this, but with government bureaucracies they seem to be a special kind of stupid.

  14. Re:in before by TechyImmigrant · · Score: 3, Informative

    Some neck beard has to make a comment about PIN numbers!

    No beard here, but I an a crypto/security type person.

    The PIN codes are very low entropy. They don't give the option for a nice high-entropy long password that you can keep in you password manager. So it's no surprise that there are automated attacks.

    --
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  15. Re:Time to replace the system. by LynnwoodRooster · · Score: 3, Informative

    "Herp a Derp" yourself... The rich already pay more than 20% and the gardener pays zero. So what does the gardener care when his Congressman says he's going to raise taxes and increase spending? No skin off his back, right? Just tell Peter to steal from Paul...

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