Quantcast
Get breaking news alerts via email

Click here to manage your alerts
IRS failed to do background checks on contractors
First Published Aug 14 2014 07:05 pm • Last Updated Aug 14 2014 08:25 pm

Washington • The IRS failed to do background checks on some private contractors who handled confidential taxpayer information, exposing more than a million taxpayers to an increased risk of fraud and identity theft, a government investigator said Thursday.

In one case, the IRS gave a printing contractor a computer disk with names, addresses and Social Security numbers of 1.4 million taxpayers, but didn’t require a background check for anyone who worked on the job, said a report by the Treasury inspector general for tax administration.

Join the Discussion
Post a Comment

In another case, to transport sensitive documents the IRS used a courier who previously had spent 21 years in prison on arson and other charges. In other cases, contractors underwent background checks but weren’t required to sign agreements not to disclose sensitive information, the report said.

"Allowing contractor employees access to taxpayer data without appropriate background investigations exposes taxpayers to increased risk of fraud and identity theft," the inspector general, J. Russell George, said.

IRS policy requires contractors with access to confidential taxpayer information to undergo background checks, though the policy wasn’t always followed, the report said. About 10,000 private contractors have access to such information.

The report did not examine whether any of the private contractors misused taxpayer information. But the issue of identity theft has been gaining attention at the IRS and elsewhere.

In recent years the IRS has reported a big jump in thieves trying to fraudulently claim tax refunds using stolen Social Security numbers.

In 2012, the IRS issued $4 billion in fraudulent tax refunds to people using stolen identities, according to an inspector general’s report released last year. That same year, the IRS blocked more than $12 billion in fraudulent refunds from going to identity thieves.

In a statement, the IRS said it takes seriously its responsibility to protect taxpayer information, "and we expect the same from our contractors."

The agency said it was committed to ensuring that all contractors with access to sensitive information undergo thorough background checks. Also, the IRS said it issued more explicit guidance over a year ago to ensure that contractors submit nondisclosure agreements.


story continues below
story continues below

"The IRS is committed to clarifying policies and procedures to ensure appropriate security provisions are included in all appropriate solicitations and contracts," the agency said.

George’s investigators reviewed 34 IRS contracts that were active in May 2013. They found five contracts in which no background checks were required, even though contractors had access to confidential information, which is labeled "sensitive but unclassified." The contracts were for courier, printing, document recovery and sign language interpreter services.

The document recovery contract was to salvage sensitive documents and personal belongings of IRS employees after a single-engine plane crashed into an IRS office building in Austin, Texas, in 2010. An IRS employee in the building was killed in the crash.

George’s report said background checks were required as part of 12 contracts, but workers were allowed access to sensitive information before the checks were completed.

Investigators also identified 20 contracts in which workers did not sign agreements not to disclose sensitive information.



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.