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IRS Failed to do Background Checks on Contractors

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.

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, said AP.

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.

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, reports the Miami Herald.

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, said AP.

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.