IRS Admits it has Been Disclosing Sensitive Taxpayer Information without Adequate Controls

The Treasury Inspector General for Tax Administration (TIGTA) found that some IRS contractor personnel without the appropriate background investigation had access to taxpayer and other sensitive but unclassified (SBU) information. TIGTA found that taxpayer data and other SBU information may be at risk due to a lack of background investigation requirements in five contracts for courier, printing, document recovery and sign language interpreter services. TIGTA found 12 more service contracts for which employee background checks were required by the contracts; however, some of the personnel did not have interim access approval or final background investigations before they began working on the contracts.

TIGTA made five recommendations to the IRS to ensure that the service contracts have security provisions included in the solicitation and contract, and that associated contractor personnel have appropriate interim access approval or final background investigation before working on the contract. In addition, TIGTA recommended that the IRS use the results of the contract reviews to train program office and procurement office staff on contractor security requirements and the necessity for contractor personnel to sign nondisclosure agreements prior to working on a contract. TIGTA also recommended that the Office of Chief Counsel work with the Department of Treasury Security Office to review the waiver currently in place that exempts expert witnesses from background investigations and to determine if the waiver is still appropriate given the current security environment.

The IRS agreed with four or the five recommendations. It disagreed with the recommendation that Chief Counsel work with the Department of Treasury with respect to the waiver that exempts expert witnesses from background investigations as it believes its current review is sufficient to address any security risks. I suppose if this was a baseball game the IRS's correction rate would .800. Unfortunately, the game here involves failure to protect taxpayer information. Thank goodness for TIGTA.

Contact the Wilson Tax Law Group if you believe your taxpayer data has been breached. 714-463-4430