IRS says ID theft from Get Transcript service worse than thought

  • By Gail Marksjarvis Chicago Tribune (TNS)
  • Monday, February 29, 2016 3:27pm
  • Business

About 685,000 taxpayers will be getting letters from the Internal Revenue Service this week warning that hackers may have stolen their tax information.

After a nine-month investigation, the IRS concluded recently that 390,000 taxpayer accounts may have been accessed, and another 295,000 were targeted, but not accessed.

The IRS said hackers used Social Security numbers found elsewhere to get into the Get Transcript service, which was designed to make it easy for filers to get tax returns from previous years. With information from previous returns, hackers presumably could prepare a phony new return in an individual’s name and seek a refund.

The service was discontinued in May 2015 when it was first discovered that 225,000 taxpayer documents may have been hacked. Since then, the investigation has turned up more potential victims. In all, more than 1.2 million tax filers were targeted by ID thieves.

Get Transcript allowed taxpayers to immediately download and view tax information or have it mailed to them. Since the launch of the service in January 2014, about 47 million transcripts have been ordered, according to the IRS.

“The IRS is committed to protecting taxpayers on multiple fronts against tax-related identity theft, and these mailings are part of that effort,” said IRS Commissioner John Koskinen in a prepared statement.

He said the IRS is trying to help taxpayers by offering free Equifax identify theft protection for a year, encouraging people to place fraud alerts on their credit accounts, placing extra scrutiny on tax returns and Social Security numbers, and placing special markers on hacked accounts.

In addition, the IRS has been sharing information with states in case state information is also compromised.

If a taxpayer is among those identified with compromised data, their electronic tax return filing, or E-File, is likely to be rejected, according to an IRS spokesman.

The IRS provides this information for people worried about identify theft: https://www.irs.gov/Individuals/Data-Breach-Information-for-Taxpayers and https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft

Tim Steffen, a financial planner with Robert W. Baird, suggests people file their taxes as early as possible so that the return arrives before a potential fraudulent filing, allowing the IRS to spot a fraud quickly. He also warned people not to trust telephone callers posing as IRS representatives because the IRS does not make first contact with people over the telephone.

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