The Massachusetts Registry of Motor Vehicles may be a lot of things, but who knew it was a management model for the Internal Revenue Service.
In a move reminiscent of the RMV’s mishandling of out-of-state violations – some 10,000 of which were found before a Massachusetts trucker who should have been off the road was charged in a deadly 2019 New Hampshire crash, a watchdog report says the IRS lost track of millions of sensitive individual and business tax records.
As Politico reported, the Treasury Inspector General for Tax Administration said Thursday that it found significant deficiencies in safeguarding and accounting for millions of tax records that contain sensitive taxpayer information.
They should have been transferred from a closed agency facility in California. The IRS is also unable to locate thousands of records that were stored at a facility in Utah.
It’s mandatory that the IRS’ store old tax records in microfilm backup cartridges, but the watchdog said it found seven empty boxes at the IRS’ facility in Ogden, Utah, that should have contained as many as 168 microfilm cartridges, which hold up to 2,000 photographic images each.
The IRS also can’t find any cartridges containing tax records from fiscal year 2010 that were supposed to be transferred to its Kansas City processing center from its processing center in Fresno, Calif., when it shut down in 2021.
“The personal taxpayer and tax information included on these backup cartridges is key information that can be used to commit tax refund fraud identity theft,” the report said.
Americans already about identity theft coming from phishing scams and other nefarious schemes. We shouldn’t have to fear that sensitive information could be lost by the IRS.
Republicans have called out the IRS before for improper handling of taxpayer information, such as its destruction of 30 million paper tax returns in March of 2021.
So the IRS is working to take paper out of the equation, announcing earlier this month that it’s launching a major effort to digitize all paper-filed tax returns by 2025. This is supposed to cut processing times in half and speed up refunds by four weeks, the agency said.
Speed is great. Faster refunds are great.
But security has to be top of mind.
One of the most alarming discoveries by the IRS watchdog was that cartridges at the Ogden facility are stored on open shelving in the middle of a large warehouse.
When the move to digitize tax records fully comes online, the financial information of millions of Americans will be in a digital warehouse of sorts. And if there’s anything we’ve learned over the past few years, it’s that hackers are eager and increasingly able to access data at major, supposedly secure institutions.
As CNBC reported, Chinese intelligence hacked into Microsoft email accounts belonging to two dozen government agencies, including the State Department, in the U.S. and Western Europe in a “significant” breach, according to Microsoft and U.S. national security officials.
The IRS needs to put security before speed. Failure to do so would be catastrophic..
