TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, October 4, 2017

Democrats And Republicans Blast IRS's Decision To Award Equifax $7.25m No-Bid Contract To Prevent Taxpayer Identity Theft: 'I Thought I Was Reading The Onion'

EIRSPolitico, IRS Awards Multimillion-Dollar Fraud-Prevention Contract to Equifax:

The IRS will pay Equifax $7.25 million to verify taxpayer identities and help prevent fraud under a no-bid contract issued last week, even as lawmakers lash the embattled company about a massive security breach that exposed personal information of as many as 145.5 million Americans.

contract award for Equifax's data services was posted to the Federal Business Opportunities database Sept. 30 — the final day of the fiscal year. The credit agency will "verify taxpayer identity" and "assist in ongoing identity verification and validations" at the IRS, according to the award. ...

Lawmakers on both sides of the aisle blasted the IRS decision.

"In the wake of one of the most massive data breaches in a decade, it’s irresponsible for the IRS to turn over millions in taxpayer dollars to a company that has yet to offer a succinct answer on how at least 145 million Americans had personally identifiable information exposed," Senate Finance Chairman Orrin Hatch (R-Utah) told POLITICO in a statement.

The committee's ranking member, Sen. Ron Wyden (D-Ore.), piled on: "The Finance Committee will be looking into why Equifax was the only company to apply for and be rewarded with this. I will continue to take every measure possible to prevent taxpayer data from being compromised as this arrangement moves forward.”

The IRS defended its decision in a statement, saying that Equifax told the agency that none of its data was involved in the breach and that Equifax already provides similar services to the IRS under a previous contract. ...

Reps. Suzan DelBene (D-Wash.) and Earl Blumenauer (D-Ore.) separately penned letters to IRS Commissioner John Koskinen demanding he explain the agency's rationale for awarding the contract to Equifax and provide information on any alternatives the agency considered. "I was initially under the impression that my staff was sharing a copy of the Onion, until I realized this story was, in fact, true," Blumenauer wrote.

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