The IRS's large amount of money collected attracts criminals who target their funds, making it crucial to safeguard the organization from cyber attacks.
Budget cuts and shrinking resources have impacted the IRS's ability to maintain security, resulting in a reduced number of employees and outdated equipment.
The flawed authentication system of the IRS's Get Transcript feature allowed hackers to exploit stolen personal information and submit fraudulent tax returns, leading to significant financial losses.
Deep dives
The Importance of Protecting the IRS from Cyber Attacks
The podcast episode highlights the significance of safeguarding the IRS (Internal Revenue Service) from cyber attacks due to the large amount of money it collects from American taxpayers. The episode emphasizes the need to protect the IRS as it attracts criminals who target the funds passing through the organization. The budget cuts and shrinking resources pose a challenge in maintaining security. The reduction in staff and outdated equipment further exacerbate the problem, making the IRS vulnerable to hackers. The episode also sheds light on the increase in tax fraud, with criminals exploiting the IRS's systems, such as the Get Transcript feature on the website, to fraudulently obtain tax refunds.
The Impact of Budget Cuts on IRS Operations
Budget cuts have significantly impacted the IRS's ability to effectively carry out its operations and provide services to taxpayers. The episode highlights that the IRS budget has reduced to the lowest level since 2008 and is comparable to 1998 levels when adjusted for inflation. As a result, the IRS has experienced a decline in the number of employees and struggles to maintain enforcement efforts and taxpayer services. The aging equipment and computers further compound the challenges faced by the IRS, making it more susceptible to security breaches.
The Exploitation of IRS's Get Transcript Feature
The episode delves into the exploitation of the IRS's Get Transcript feature on its website by hackers and fraudsters. It explains how criminals used stolen personal information obtained from data breaches, such as the Anthem breach, to navigate the authentication system and access individuals' tax records. The thieves submitted fraudulent tax returns, resulting in significant financial losses for the IRS. The flawed knowledge-based authentication (KBA) method used by the IRS, which relied on personal information known to hackers, proved to be a significant vulnerability.
Criminal Activities and Trends in Tax Fraud
The podcast episode discusses various criminal activities and trends in tax fraud, particularly in states like Alabama, Georgia, Louisiana, and Florida. It explores how criminals exploit personal identification information obtained from data breaches to engage in tax fraud schemes. The episode alludes to drop parties and illicit gatherings where criminals share tactics, stolen information, and teach others how to commit tax fraud. The narrative also highlights the challenges faced by law enforcement agencies in investigating and prosecuting these crimes.
The Government's Response to IRS Security Breaches
The episode sheds light on the government's response to the security breaches faced by the IRS. It discusses the corrective actions taken by the IRS, such as introducing additional security measures, offering credit monitoring to affected taxpayers, and implementing identity protection personal identification numbers (IP PINs) to safeguard taxpayer accounts. The episode also highlights the coordination between the IRS, Department of Justice, and other law enforcement agencies in investigating and prosecuting individuals involved in tax fraud and breaches. Despite these efforts, the episode underscores the ongoing challenges and the evolving nature of cyber threats faced by the IRS.
The IRS processes $3 trillion dollars a year. A lot of criminals want to get a piece of that. In 2015 the IRS had a large data breach. Hundreds of thousands of tax records were leaked. What happened and who was behind this? Listen to this episode to find out.
