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IRS Suspends $7 Million Contract With Equifax After Malware Discovered (cbsnews.com)

Posted by BeauHD on from the series-of-unfortunate-events dept.

After malware was discovered on Equifax's website again, the IRS decided late Thursday that it would temporarily suspend the agency's $7.1 million data security contract with the company. CBS News reports: In September, Equifax revealed that it had exposed 143 million consumer files -- containing names, addresses, Social Security numbers and even bank account information -- to hackers in an unprecedented security lapse. The number of consumer potentially affect by the data breach was later raised to 145.5 million. The company's former CEO blamed a single careless employee for the entire snafu. But even as he was getting grilled in Congress earlier this month, the IRS was awarding the company with a no-bid contract to provide "fraud prevention and taxpayer identification services." "Following new information available today, the IRS temporarily suspended its short-term contract with Equifax for identity proofing services," the agency said in a statement. "During this suspension, the IRS will continue its review of Equifax systems and security." The agency does not believe that any data the IRS has shared with Equifax to date has been compromised, but the suspension was taken as "a precautionary step."

50 comments

  1. Yay! by thegreatbob · · Score: 3, Insightful

    Better late than never. I can't help but feel that, somehow, some sort of future disaster was just narrowly averted.

    --
    There is no XUL, only WebExtensions...
    1. Re:Yay! by Anonymous Coward · · Score: 0

      No one would have used the services. The Equifax name is permanently tarnished. It would have been a big waste of taxpayer money, though that's nothing new.

  2. EquiFax Unresponsive by pubwvj · · Score: 3, Interesting

    Equifax.com's server gives an error 500 when I try and contact them through their website. Is this them blocking people or simply more incompetence on their part?

    1. Re:EquiFax Unresponsive by mhkohne · · Score: 1

      Could be they've taken stuff down to prevent any more embarrassment for the moment.

      --
      A thousand pounds of wood moving at 300 feet per minute. Don't get in the way.
    2. Re:EquiFax Unresponsive by ToTheStars · · Score: 2

      This may be them taking their website offline after it was hijacked to serve up malicious Flash updates (for double exploit fun).

    3. Re:EquiFax Unresponsive by Anonymous Coward · · Score: 0

      I got this same error when attempting a credit freeze using FireFox in Linux. It worked OK with Chrormium in incognito mode.

    4. Re:EquiFax Unresponsive by l0n3s0m3phr34k · · Score: 1

      Slashdot is "unresponsive" too, I get a 404 trying the link in TFA!

    5. Re:EquiFax Unresponsive by emaname · · Score: 1

      Yes

      --
      An effective "democracy" creates the illusion the people have a say in their government.
  3. Again? by Mike+Van+Pelt · · Score: 2

    I'll take "Things that make my brain hurt" for $2000, Alex.

    1. Re:Again? by Anonymous Coward · · Score: 0

      This alcoholic beverage, when consumed to excess, leaves you with a headache that feels like someone has driven incandescent railroad spikes through your skull the next morning, followed by explosive and repeated evacuations of your colon and lower intestines.

    2. Re:Again? by bigfinger76 · · Score: 1

      What is Rolling Rock?

  4. LOLS!!! by Anonymous Coward · · Score: 1

    The summary used "no bid contract" and "fraud prevention" in the same sentence.

    Only in America and Venezuela.

  5. $7.1 million is a rounding error for Equifax by rmdingler · · Score: 2

    Equifax was careless with the information of hundreds of millions of people It's trebly sad they are in the personal information protection business, but as we've learned, pretty much everybody is seemingly careless with the information of others.

    But. Malware is still being delivered on their site? I know that Einstein said only the universe and stupidity are infinite, and he's not sure about the universe, but isn't it plausible these breaches have entered the realm of corporate espionage?

    Experian and Lifelock, et al. seem to be benefiting quite largely from Equifax's misfortune.

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

    1. Re:$7.1 million is a rounding error for Equifax by mhkohne · · Score: 3, Interesting

      Yea, $7.1 mil IS small for them. Which means that contract wasn't about that contract, but rather about getting a foot in the door for more work in the future. So while the loss of that contract is almost irrelevant, the near-future potential that goes with it is probably quite a bit more.

      --
      A thousand pounds of wood moving at 300 feet per minute. Don't get in the way.
    2. Re:$7.1 million is a rounding error for Equifax by ninjaz · · Score: 3, Interesting

      It's certainly possible, but after the emails that came out showing that they made a special effort to run off anyone who was competent and conscientious, it's more plausible that they actually just suck that much.

      It is hard to imagine them being able to instantly become competent after so much effort was put into warding off competence.

  6. Second chance, really? by markdavis · · Score: 4, Insightful

    So it takes a SECOND breech before they decide to suspend the contract? If they have the option to suspend it now, why didn't they do it before? I think this speaks volumes about the competence of the IRS.

    How about we move to a simple flat tax with no loopholes, which would dismantle 80% of the IRS and either pass the savings onto the taxpayers or use the savings to start paying off the 20 TRILLION DOLLAR national debt?

    Even they admit they directly spend over 12 BILLION dollars a year, which goes up every year! Yet that doesn't include what it costs businesses and individuals to COMPLY with the insanely complicated tax codes. That compliance is estimated to cost the USA economy an additional $409 BILLION dollars every year. Wow, that works out to $3,500 dollars for every tax payer in the country, every year.

    https://taxfoundation.org/comp...

    https://www.usatoday.com/story...

    http://www.usdebtclock.org/

    https://fairtax.org/index

    1. Re:Second chance, really? by whoever57 · · Score: 3, Insightful

      Because "flat tax" really means "tax increase for the poor, tax cut for the wealthy".

      It's also not as simple as people would like to think. You run a business, what's a legitimate expense and what isn't? The costs of compliance (which are probably exaggerated by the site you linked to) are not going to be zero with a flat tax.

      "The Tax Foundation is funded by private donations from members, corporate donations, and donations from charitable foundation such as the Koch Foundation, Earhart Foundation, etc."

      Funded in part by the Koch Brothers. Yes, that's going to have promoting the interests of ordinary Americans as one of its most important goals.

      --
      The real "Libtards" are the Libertarians!
    2. Re:Second chance, really? by ShanghaiBill · · Score: 2

      How about we move to a simple flat tax

      A "flat tax" does nothing to make taxes less complex. 99.999% of the complexity is determining "what is income", not the single percentage calculation at the end.

      with no loopholes

      Please give us your clear, concise, and universally accepted distinction between a "loophole" and a "legitimate business expense".

    3. Re:Second chance, really? by Anonymous Coward · · Score: 0

      The republican party also proactively prevents the IRS from using the information they already have to simplify tax filing.

    4. Re:Second chance, really? by Anonymous Coward · · Score: 0

      How about we move to a simple flat tax with no loopholes, which would dismantle 80% of the IRS and either pass the savings onto the taxpayers or use the savings to start paying off the 20 TRILLION DOLLAR national debt?

      I'm all in favor of a flat tax, but let's not waste our money paying off debt ahead of schedule. Pass a constitutional amendment disallowing deficit spending and requiring that debt be paid off according to whatever note it was borrowed (not to exceed 30 years) = that money comes out before the budget is approved by Congress.

      Personally I think we should also slash current defense spending by at least 90% over the next decade. Doing that would mean gradually recalling all of our overseas operations and converting most of our active duty military duty contracts to reserves (or allow them to transfer and become UN peace keepers).

      Then we should use the combined savings from flat tax and reduced defense spending to fund things like: education, fusion research, NASA, and Medicare-For-Everyone (single payer).

    5. Re:Second chance, really? by 140Mandak262Jamuna · · Score: 1
      Just remove the distinction between capital gain, gift, earned income, carried interest, interest and dividends. Poor wage slaves have no way to change the name of their income. Rich people funnel their income through various shell entities and they can magically change the name of the dollars they are getting. They pay low rate, you pay high income rates.

      Why should the income earned through blood and sweat of millions of Americans be taxed at high rates, while money making money be taxed at low rates?

      --
      sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
    6. Re:Second chance, really? by unrtst · · Score: 1

      Please give us your clear, concise, and universally accepted distinction between a "loophole" and a "legitimate business expense".

      No write offs, thus "legitimate business expenses" don't matter.

      FWIW, I'm not the GP, and I don't believe moving to a workable flat tax is feasible. If we were to somehow wipe out every tax related thing there is right now, and plop in a new tax system, flat tax could be made to work, but it's also very prone to very big loopholes for the rich. Avoiding any additions like business expenses or reclassifying income would be difficult. The flatness of the tax itself isn't even solidly defined, as many say a "true flat tax" is proportional, but may be progressive and/or regressive. Labeling anything tax related as "simple" is a great red herring.

    7. Re:Second chance, really? by JoshuaZ · · Score: 1

      In addition to the excellent points by whoever57, it is worth noting that flat taxes essentially are missing that money has diminishing marginal utility. If one has $10,000 of income, the difference in lifestyle if that doubles is massive, often difference between being homeless or not. But if one has $300,000 of income, in most respects it doesn't change nearly as much if one doubles income. This is a general pattern. A flat tax only makes sense if everyone is paying the same utility. But dollars are not utils.

    8. Re: Second chance, really? by Anonymous Coward · · Score: 1

      I'll also jump in with an opening bid of:
      50% of gross income, no deductions.
      And every natural born, legal adult citizen gets a stipend of about $12k/year.

      Basic Public school, college, vocational training and general medical care provider without the wasteful overhead of hmo and ceo quarterly profit motives.

    9. Re:Second chance, really? by markdavis · · Score: 1

      >Because "flat tax" really means "tax increase for the poor, tax cut for the wealthy".

      Nope. I said "flat tax with no loopholes." The wealthy get the loopholes.

    10. Re:Second chance, really? by markdavis · · Score: 1

      >"A "flat tax" does nothing to make taxes less complex. 99.999% of the complexity is determining "what is income", not the single percentage calculation at the end. "

      The "what is income" part *is* what makes taxes complex, and every flat tax proposal I have ever seen isn't about just a flat percent, but getting rid of all the zillions exceptions and loopholes that enable mostly the wealthy from using obscure exceptions to not pay that percent.

    11. Re:Second chance, really? by Anonymous Coward · · Score: 0

      In that case, why not a progressive tax with unicorns? Dare to dream big.

    12. Re:Second chance, really? by markdavis · · Score: 1

      >"In that case, why not a progressive tax with unicorns? Dare to dream big."

      Dreaming big (flat tax with no loopholes) is better than just giving up and accepting the mess we have now, which is likely to continue to get worse and worse.

    13. Re:Second chance, really? by Anonymous Coward · · Score: 0

      ... what's a legitimate expense

      Any purchase or labour that:

      - is directly related to employees, protection of assets, selling, or a reasonable expectation of profit (eg. bonds).

      - increases technology (eg. patents) and services for the public good; such as R&D

      - can be considered good behaviour to others, excluding employees, sellers, or buyers (eg. the environment, charities).

      So, chasing copyright pirates is deductible, bribing a politician isn't.

    14. Re:Second chance, really? by ShanghaiBill · · Score: 2

      No write offs, thus "legitimate business expenses" don't matter.

      You just put 99% of companies out of business. They can't deduct payroll? Or cost of supplies? Cost of utilities? Now, the standard response is that, of course, they can deduct THOSE expenses, because they are LEGITIMATE. But then what about advertising expenses? R&D? Depreciation? Interest? Etc? Etc?

    15. Re:Second chance, really? by ShanghaiBill · · Score: 1

      every flat tax proposal I have ever seen isn't about just a flat percent, but getting rid of all the zillions exceptions and loopholes

      Every flat tax proposal that I have seen does this with a lot of vagueness and hand waving, and no concrete proposals, or even a clear definition of how a "loophole" differs from a legitimate expense

      that enable mostly the wealthy from using obscure exceptions to not pay that percent.

      Yet most support for a flat tax comes from wealthy people. The top 1% have 20% of the income, yet pay nearly 40% of all income tax. They would clearly benefit from a flat tax.

      Disclaimer: I am a well paid developer in SV. So is my spouse. We would benefit very much from a flat tax. It is still a stupid idea.

    16. Re:Second chance, really? by whoever57 · · Score: 1

      You really have no idea how tax accounting works, have you?

      So I run a business. I buy some product and sell them. Do I pay tax on all my revenue? On all my revenue minus my cost of the product I buy? What about the cost of running my store?

      Irrespective of the above, any flat tax, including one with "no loopholes", is highly regressive: it's a massive tax increase for poor people and a tax cut for rich people. Is that what you want?

      As someone else commented, why not ask for a unicorn tax code?

      --
      The real "Libtards" are the Libertarians!
    17. Re: Second chance, really? by Corbets · · Score: 1

      No, you donâ(TM)t get it. No write offs at all. If every business has to raise their prices a bit, fine, but the idea is that there are no deductions, enforcement is simple and less costly, businesses donâ(TM)t have to pay people to do their taxes for them, and it all works out to a net positive.

    18. Re: Second chance, really? by Anonymous Coward · · Score: 0

      Defense spending is only a third of the budget, and it is one if the few Constitutional activities that the federal government is supposed to do. Everything else you mentioned is not. Maybe those things should be implemented at the state level first?

    19. Re: Second chance, really? by whoever57 · · Score: 1

      No, you don't get it.

      Imagine a typical company. Let's say that their revenue is $10M/year. They incur costs of $9M/year paying for employee salaries, office rents, materials they buy, etc..

      In the current scenario, the business makes a profit of $1M/yr, on which they pay tax (at 35%) of $350K. [note, this is massively simplified].

      In your scenario, they pay 35% tax on $10M. That's $3.5M. Where does the money to pay $3.5M in tax come from? They would have to put up prices by a huge amount. But guess, what, not only do they have to put up prices, but so do all their suppliers, so they still can't pay their tax bill, because, after increasing their prices, their tax bill went up, along with all their costs.

      Please stick to subjects where you have a clue.

      --
      The real "Libtards" are the Libertarians!
    20. Re:Second chance, really? by whoever57 · · Score: 1

      Even if there are no loopholes, a flat tax still means a tax increase for the poor and a tax cut for many wealthy people. There are a few exceptions amongst the wealthy like Mitt Romney, but for the most part, that what would happen.

      Unless you are advocating abolishing the Social Security tax? Is that your plan? Abolishing the Social Security tax would result in the gradual death of Social Security, which would result in more poverty and early death amongst the elderly poor. Is that what you want?

      Either way, flat tax is a con that is promulgated by the ultra wealthy so that they can get a tax cut that the rest of the USA will pay for.

      --
      The real "Libtards" are the Libertarians!
    21. Re:Second chance, really? by markdavis · · Score: 1

      >"Even if there are no loopholes, a flat tax still means a tax increase for the poor and a tax cut for many wealthy people. "

      ? I would think that depends on the percent of tax proposed. If it were 10%, it would remain the same. As for cutting taxes to the wealth, again, that depends on how much income they were hiding. Some do a remarkably good job of it. Still, I think a more interesting proposal would be a consumption tax:

      http://fairtax.org/

    22. Re: Second chance, really? by Anonymous Coward · · Score: 0

      No, you don't get it.

      Imagine a typical company. Let's say that their revenue is $10M/year. They incur costs of $9M/year paying for employee salaries, office rents, materials they buy, etc..

      In the current scenario, the business makes a profit of $1M/yr, on which they pay tax (at 35%) of $350K. [note, this is massively simplified].

      In your scenario, they pay 35% tax on $10M. That's $3.5M. Where does the money to pay $3.5M in tax come from? They would have to put up prices by a huge amount. But guess, what, not only do they have to put up prices, but so do all their suppliers, so they still can't pay their tax bill, because, after increasing their prices, their tax bill went up, along with all their costs.

      Please stick to subjects where you have a clue.

      ...and here is the proof that you are at best disingenuous, and at worst flat out LYING.

      The idea is not to impose a massively high percentage flat tax with no deductions... but a much lower percentage flat tax with no deductions.

      e.g. (using your above example) instead of a 35% tax with a massive effort put into justifying that only 10% of the 10 million dollars of income is really taxable, a flat 5% tax is assessed: yielding a $500,000 tax bill -without the need to waste a lot of money on accountants and tax lawyers.

      The business pays more taxes, but saves on accountants and lawyers. The individuals pay less. Overall the government gains more revenue, and spends less on IRS enforcement and tax code specialists.

  7. Ha ha by Anonymous Coward · · Score: 0

    This is just to appease the nay-sayers. They'll un-suspend this thing as soon as they can because they have a job to do and that job is to shovel monies to equifax.

    You gotta ask, why is the government using a commercial third party to "do identity" for them?

    1. Re:Ha ha by emaname · · Score: 1

      You gotta ask, why is the government using a commercial third party to "do identity" for them?

      Because EVERYTHING works better when in it's in the public sector. You know, it's 'cuz of the "Free Market." /clearly sarcastic

      --
      An effective "democracy" creates the illusion the people have a say in their government.
  8. stopping payment on a contract? by Anonymous Coward · · Score: 0

    Good luck with that. Get my lawyer. He doesn't have a music degree.

  9. They all want big government by Anonymous Coward · · Score: 1

    Conservatives who advocate a "flat tax with no loopholes" still want to keep loopholes like business deductions for basically the same reason that their opponents on the other side of the aisle insist on having loopholes -- tax codes give the government a means to compel private behavior.

    Neither side relinquishes such power willingly.

    1. Re:They all want big government by markdavis · · Score: 1

      >"Conservatives who advocate a "flat tax with no loopholes" still want to keep loopholes like business deductions for basically the same reason that their opponents on the other side of the aisle insist on having loopholes -- tax codes give the government a means to compel private behavior."

      Actually, no, most who advocate for "flat tax with no loopholes" really want just that- a flat tax with no loopholes. A simple tax code that is easy to understand, easy and cheap to manage, and simple to enforce.

      But you are correct that the current tax code is used as yet another way for government to indirectly control what we do and how we spend and how we act, and it needs to stop. Taxing should be to raise revenue, that's it, not control behavior.

      >"Neither side relinquishes such power willingly."

      There isn't a "side", there are a zillion shades of grey. But the bigger government gets, the more it corrupts, controls, and protects itself. This is especially true of the Federal government where accountability is severely removed from the people they supposedly serve. Too many people are directly or indirectly associated with government- they all want jobs, money, and power.

  10. the buck doesn't stop THERE by v1 · · Score: 2

    The company's former CEO blamed a single careless employee for the entire snafu.

    A "single employe" shouldn't be able to pull this off. If they can, then the problem isn't with the employee, it's with the process the employee is working within. If your company is set up where a single peon can ruin your business, it's past time for a come-to-jesus meeting with management.

    --
    I work for the Department of Redundancy Department.
    1. Re:the buck doesn't stop THERE by Anonymous Coward · · Score: 0

      Yeah unfortunately this is political BS technique. Not sure many will fall for it but they just say it to deflect attention away.

  11. Bad link in summary by myid · · Score: 4, Informative

    The summary for this article contains a dead link labeled "discovered".

    Yesterday, Slashdot had these two articles:
    First at 11:21 AM, this first article.
    Then at 12:39 PM, this second article.

    Apparently Slashdot removed the second of those two articles, since the second one was pretty much a duplicate of the first. But Google cached it, and the cached article is here.

    So now you know where to look, to read the "discovered" article that the summary references.

  12. Waiting... by VeryFluffyBunny · · Score: 1

    The agency does not believe that any data the IRS has shared with Equifax to date has been compromised...

    Waiting for the next update on this topic.

    --
    Debate is a form of harassment. Do not question my truth.
  13. Why by Anonymous Coward · · Score: 0

    Why the hell would IRS choose a company that had just exposed half the population of the entire country, revealing ALL the information that is used to authenticate who they are? Fire the person at the IRS who was responsible for this decision...NOW. It would be very hard to come up with a more damaging thing that the IRS could do to the country.