IRS refunds $50 million in hack
Published 12:00 am Wednesday, May 27, 2015
WASHINGTON — Criminals used stolen data to gain access to past tax returns of more than 100,000 people through an application on the Internal Revenue Service’s website, the agency said on Tuesday.
Using Social Security numbers, birthdates, street addresses and other personal information obtained elsewhere, the criminals completed a multistep authentication process and requested the tax returns and other filings, the IRS said. Information from those returns was used to file fraudulent returns, the IRS said, and the agency sent nearly $50 million in refunds before it detected the scheme.
“We’re confident that these are not amateurs,” John Koskinen, the IRS commissioner, said. “These actually are organized crime syndicates that not only we but everybody in the financial industry are dealing with.”
The agency has opened an investigation into the breach and has temporarily shut down the Get Transcript application, which was used to gain access to the information. More than 200,000 attempts to view the past returns using stolen information were made from February to mid-May, and about half were successful. It is unclear whether the criminals were operating from inside or outside the United States.
Dealing with fraudulent tax claims has been a challenge for the IRS as cybercrime has grown more sophisticated in recent years. The agency paid $5.8 billion in falsely claimed refunds in 2013.
“Eighty percent of the identify theft we’re dealing with and refund fraud is related to organized crime here and around the world,” Koskinen said at a news conference Tuesday. “These are extremely sophisticated criminals with access to a tremendous amount of data.”
This year, the IRS stopped almost 3 million suspicious returns, Koskinen said, and officials said that new computer filters that look for anomalies have helped prevent identity theft.