WP: IRS Found Lax in Protecting Taxpayer Data
By Kathleen Day
Washington Post Staff Writer
Thursday, April 5, 2007; Page D01
Thousands of taxpayers could be at risk of identity theft or other financial fraud because the Internal Revenue Service has failed to adequately protect information on its 52,000 laptop computers and other storage systems, a new government report concludes.
The IRS did not begin to adequately correct the security problems until the second half of 2006, despite being warned about them in 2003 and again in February 2006, according to a report by the inspector general of the IRS, J. Russell George.
Nearly 500 IRS laptops were lost or stolen during that 3 1/2 -year period, many from the homes or cars of IRS workers but a significant number -- 111 -- from IRS offices, the report found. The IRS says one laptop typically contains information on 10 to 25 tax cases.
Although the missing laptops could not be examined, the inspector general's staff tested 100 laptops currently used by IRS employees and found 44 had "unencrypted sensitive data, including taxpayer data and employee personnel data," leading investigators to conclude "it is very likely a large number of the lost or stolen IRS computers contained similar unencrypted data."
No report of identity theft has been linked to the missing laptops, and no taxpayers have been alerted to the potential security breaches, IRS officials say....
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The security lapses described by the report are the latest instance of personal information being put at risk in recent years by a federal agency, even as identity theft has become one of the fastest-growing white-collar crimes. Last May, the Department of Veterans Affairs reported the theft of a computer hard-drive that contained personal information on more than 26 million people. A year ago, the Commerce Department reported that more than a thousand of its laptops were missing, including many containing sensitive information about individuals....
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