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Pepperdine University School of Law

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Tuesday, May 11, 2010

TIGTA: IRS Releases Confidential Information to Callers Without Proper Authentication in 16% of Cases, Subjecting Taxpayers to Risk of Identity Theft

The Treasury Inspector General for Tax Administration today released Telephone Authentication Practices Need Improvements to Better Prevent Unauthorized Disclosures (2010-40-045):

In February 2009, the Federal Trade Commission reported that for the ninth year in a row identity theft was the number one consumer complaint nationwide. Identity theft occurs when someone uses Personally Identifiable Information, such as an individual’s name, Social Security Number, credit card numbers, or other account information to commit fraud and other crimes. Taxpayers need to be assured that the IRS is taking every precaution to protect their private information from inadvertent disclosure. This includes, but is not limited to, taxpayers calling the IRS’ toll-free telephone numbers to request account information.

The telephone continues to be one of the primary methods taxpayers use to communicate with the IRS. Millions of telephone calls were made to the IRS toll-free telephone line (1-800-829-1040) in Fiscal Year 2009 seeking help with tax account questions. IRS guidelines require assistors to fully authenticate callers before assisting them. Two prior Treasury Inspector General for Tax Administration audit reports identified that IRS assistors did not always comply with procedures for authenticating taxpayers’ identities.

Assistors are not always authenticating taxpayers who call the IRS’ toll-free telephone number for tax account information. From our statistical sample of 180 contact recordings, we determined that assistors did not properly follow procedures when authenticating 29 (16%) callers, increasing the risk of unauthorized disclosures.

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