IG Reports IRS Lacks ‘adequate controls’ To Safeguard Taxpayer Information From Unauthorized Access

A recent report by the inspector general revealed that the Internal Revenue Service lacks sufficient controls to safeguard sensitive taxpayer information from unauthorized access, as reported by Fox Business.

The investigation conducted by the Treasury Inspector General for Tax Administration discovered that some former IRS employees and contractors still had access to certain critical systems.

This inquiry was prompted by a former IRS contractor, Charles Littlejohn, who leaked tax returns of former President Donald Trump and numerous wealthy individuals.

Littlejohn was subsequently sentenced to five years in prison for stealing and distributing this confidential information to media outlets, according to previous reports by Blaze News.

According to the IG’s report, the United States House Ways and Means Committee requested the investigation last year following the “massive leak of confidential tax information that the IRS is charged with keeping secure,” according to a letter from the committee’s chairman, Rep. Jason Smith (R) from Missouri.

In a statement, Smith said, “Alarm bells should have set off at the IRS when it was discovered that an IRS contractor stole and leaked thousands of individuals’ tax returns, including President Trump’s.”

“Instead, it looks like the agency has done very little in response. The IRS has absolutely no excuse for the failure to protect confidential taxpayer information,” he added.

The recent report explained, “Subsequent to receipt of the Chairman’s letter, TIGTA agreed to conduct an evaluation addressing how the IRS grants access to and safeguards Federal Tax Information maintained on its various information technology systems (i.e., sensitive systems).”

The Inspector General pointed out that unauthorized access and disclosure of taxpayer information have the potential to erode public trust in the Federal tax system’s ability to protect confidential tax data.

According to the inspector general’s findings, access is granted through the agency’s Business Entitlement Access Request System, with a uniform process for both employees and contractors.

During the investigation, it was revealed that as of July, more than 91,000 users had access to at least one of the agency’s 276 sensitive systems. Among these users, over 5,000 were contractors.

“Procedures to systemically remove users who no longer require access to sensitive systems were not always working as intended. For example, TIGTA identified 279 users who were listed in BEARS as separated who, as of July 13, 2023, continued to have access to at least one IRS sensitive system. However, for each of these individuals IRS network access was removed, which according to the IRS, reduces, but does not eliminate, the risk that a user can access a sensitive system,” the report stated.

Additionally, when an employee’s or a contractor’s background check came back “not favorable” those individuals were “not always remove[d],” it found.

“Specifically, 19 contractors’ most recent background investigations were not favorable as of July 13, 2023. However, these contractors still retained their access to one or more sensitive systems because the IRS did not take action to suspend or disable the contractors from the IRS’s systems, as required,” the report continued.

The investigation highlighted that the IRS is making efforts to enhance the security of its sensitive systems.

“However, for some sensitive systems, the IRS does not have adequate controls to detect or prevent the unauthorized removal of data by users,” the report stated.

The investigation highlighted that the IRS is making efforts to enhance the security of its sensitive systems.

“The IRS disagreed with any inference that the 19 contractors TIGTA identified compromised sensitive information. All 19 contractors received prior favorable background investigations, and 15 contractors were reinstated after resubmitting their documentation. The remaining four contractors had their network access disabled and have been separated in the personnel system,” it added.

Additionally, the IRS stated that it “already takes steps to remove access when a contractor is identified as not having a favorable background determination.”

Last week, Commissioner Daniel Werfel of the IRS testified before the committee, asserting that the agency has implemented numerous measures to safeguard confidential taxpayer data.

Despite a request for comment from Fox Business, the IRS remained unresponsive.

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