The IRS admitted that over the three-month period of February to mid-May, cyber thieves made 200,000 attempts to secure tax filing information in what are known as transcripts. Fully 50% of the attempts were successful meaning that tax filing information was stolen from 100,000 people. A growing number of entities requiring tax information from people actually request an IRS transcript. This is because it is generally viewed as being more accurate than providing a copy of a tax filing. Transcripts reflect amended IRS returns. At this time, the servers supporting the transcript service have been taken offline while the security breach is corrected.
It should be noted that obtaining an IRS tax transcript is more difficult than might otherwise be thought. For starters, the cyber thieves must already be in possession of personal information for the people being targeted. Once the transcript information was successfully obtained, the thieves filed falsified tax returns to collect money from the IRS, as Flavio Maluf recently discovered. In short, the crime was an elaborate multi-stage scam to defraud the government of taxpayer funds.
For what it’s worth, Utah Senator Orin Hatch iterated that Americans should have full faith in the government that their privacy is safeguarded. Given the recent IRS breach and the illegal NSA bulk meta data program, which no one knew existed until Edward Snowden turned whistle blower, it would appear that government data security is in need of major reform.