Criminals used stolen data to gain access to past tax returns of more than 100,000 people through an application on the Internal Revenue Service’s website, the agency says.
The New York Times reports that by using Social Security numbers, birth dates, street addresses and other personal information obtained elsewhere, the criminals completed a multistep authentication process and requested the tax returns and other filings, the IRS says. Information from those forms was used to file fraudulent returns, the IRS says, and the agency sent nearly $50 million in refunds before it detected the scheme.
“We’re confident that these are not amateurs,” says John Koskinen, the IRS commissioner. “These actually are organized crime syndicates that not only we but everybody in the financial industry are dealing with.”
The agency has opened an investigation into the breach and temporarily has shut down the Get Transcript application, which was used to gain access to the information. Old tax returns sometimes are needed to apply for college loans or mortgages, and taxpayers still can request the records by mail.
More than 200,000 attempts to view the past returns using stolen information were made from February to mid-May, and about half were successful. It is unclear whether the criminals were operating inside or outside the United States.
Dealing with fraudulent tax claims has been a challenge for the IRS as online crime has grown more sophisticated in recent years. The agency paid $5.8 billion in falsely claimed refunds in 2013.
“Eighty percent of the identity theft we’re dealing with and refund fraud is related to organized crime here and around the world,” Koskinen says. “These are extremely sophisticated criminals with access to a tremendous amount of data.”
