Report Says IRS Fails to Protect Sensitive Data


The agency tasked with processing more than 220 million tax returns annually is not doing an adequate job of protecting the sensitive personal financial information of the taxpayers submitting those forms, according to a report from the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA said IRS employees reported the loss or theft of 490 laptop computers between Jan. 2, 2003, and June 13, 2006. Many of the thefts were attributed to employees failing to properly secure laptops in their homes and cars or not storing the machines in locked cabinets when not in use. TIGTA said it is likely many of the lost computers contained unencrypted taxpayer data and employee personnel data. The report also notes TIGTA warned the IRS as early as July 2003 that other devices such as flash drives, CDs and DVDs contained sensitive data that was not encrypted, but the IRS had not taken adequate corrective actions.

The report recommends the IRS take measures such as refining incident response, buying computer cable locks for employees’ laptops and including instructions on using approved encryption software on all electronic media devices.

The report is available at www.treas.gov/tigta/auditreports/2007reports/200720048fr.pdf .

SPONSORED REPORT

The technology assessment engagement

Are you working with the best technology? Do you know how to help your clients determine if their technology stack measures up? In this free report, J. Carlton Collins, CPA, explains how to answer those questions via a technology assessment engagement.

FEATURE

Maximizing the higher education tax credits

A counterintuitive strategy can save taxes by including otherwise excludable scholarships in gross income.