IRS: (Russian?) Hackers Steal 100,000 Tax Records

In this era of big-time cyber crime, first we had point-of-sale break ins by hackers to steal customer information, then mega-retail was victimized, followed by the most recent battleground of stolen medical records. Now it’s the IRS that’s become a target of cyber thieves. Imagine that.

Cyber crooks, perhaps operating as an organized crime syndicate, pilfered the tax records of some 100,000 people to steal identities and claim fraudulent tax refunds, the IRS said. The hackers reportedly broke into an online system called “Get Transcript” in which taxpayers can procure tax returns and filings from prior years.

IRS Commissioner John Koskinen told the Associated Press that the stolen records is the work of professionals. An unusually large number of requests by taxpayers requesting transcripts prompted the agency to investigate, he said.

“We’re confident that these are not amateurs,” said Koskinen, in the AP report. “These actually are organized crime syndicates that not only we but everybody in the financial industry are dealing with.”

Initial reports said officials weren’t certain where the cyber thieves are based nor is it known if the break in netted them enough personal information about the taxpayers to compile fake tax returns. However, a subsequent CNN report said sources indicated the break-in appeared to be based in Russia. 

The IRS said organized crime syndicates in 2014 filed $50 million in fraudulent tax refunds based on stolen personal data.

Koskinen said the thieves targeted the online system from February to mid-May. The IRS’ main computer system was not affected, he said.

“In all, about 200,000 attempts were made from questionable email domains, with more than 100,000 of those attempts successfully clearing authentication hurdles,” the IRS said.

The IRS said it has initiated a criminal investigation.

“Eighty percent of the of the identity theft we’re dealing with and refund fraud is related to organized crime here and around the world,” Koskinen told the AP. “These are extremely sophisticated criminals with access to a tremendous amount of data.”

The IRS said it is notifying affected taxpayers of the intrusion.