The Internal Revenue Service (IRS) launched Identity Theft Central, designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses.
To combat the problem, the IRS updated its computer files to identify more fraudulent returns, and the major tax preparers have increased their security. However, as individuals’ tax returns are becoming more difficult to manipulate, thieves are taking aim at data belonging to tax return preparers and tax professionals, the payroll community, small employers and human resource departments.
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.
Thousands of tax delinquents, including one who owes the IRS $2 million, have sensitive security clearances, posing a risk that has gone undetected by federal agencies, congressional investigators will report this Thursday.
At a news conference, U.S. Sen. Sherrod Brown (D-OH) highlighted how prisoners who filed fraudulent tax returns have cost American taxpayers $123 million since 2004.
