Taxpayers Say IRS Deliberately Failed to Protect Personal Information

by | Aug 28, 2015 | IRS

Government agencies are custodians of your personal information, and because of the sensitive nature of tax issues, the government’s duty to protect individuals’ tax information is of the utmost importance. A recently filed lawsuit claims the IRS knowingly failed in that duty.

Two plaintiffs, who seek to represent hundreds of thousands of affected taxpayers, say that hackers stole personal information through the IRS website and filed fraudulent tax returns in the names of the plaintiffs. Specifically, the suit points to lack of security in the IRS’s “Get Transcript” application.

The agency announced a data breach earlier this year, saying that hackers illegally accessed 330,000 accounts by using the app. A particularly stinging claim in the lawsuit is that the IRS had already been warned about lack of security in recommendations by the Treasury Inspector General for Tax Administration.

According to the suit, the IRS, being fully aware that taxpayer information “has significant value in the black market,” failed to take action to prevent the security breach.

The lawsuit suggests, though, that it wasn’t necessary to use the “Get Transcript” app in order for a criminal to steal your identity. One plaintiff, whose information was used to claim a fraudulent tax refund of $9,300, said she never used the app, but prior to the announcement of the breach, there was nothing indicating that her identity had been stolen. The app, she believes, was nonetheless used to steal her information.

While the IRS has a reputation for punctiliousness, the reality is that taxes can be a messy business. Legal issues arise, and taxpayers need to be prepared to take action. For more on resolving tax-related disputes, please see our Tax Resolutions overview.



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