IRS watchdog: Contractors with failed checks kept system access
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An IRS inspector general report disclosed that 19 contractors retained access to sensitive systems despite unfavorable background check results. The report also flagged insufficiencies in IRS’s security measures and stated that the IRS did not ensure all sensitive systems provided complete audit logs for monitoring unauthorized access. The report follows a recent case where an IRS contractor was sentenced for leaking former President Donald Trump’s tax information, and the IRS’s subsequent claims that they have improved their data security following the funding received through Democrats’ Inflation Reduction Act.
IRS Inspector General Report Reveals Security Flaws
The IRS, according to a recent inspector general report, continued to allow 19 contractors with “not favorable” background reports access to sensitive systems. The IRS failed to take necessary action to suspend or disable these contractors from sensitive systems, despite the unfavorable ratings being returned as recently as July 13, 2023.
IRS Commissioner Daniel Werfel confirmed in an interview that four of these contractors have now been terminated and others have resubmitted their paperwork. All received favorable background checks and there is no suggestion that they compromised taxpayer information. Details on when these issues were identified are not available due to privacy concerns, but an IRS spokesperson assured they were “promptly resolved” once flagged by TIGTA.
The report’s release coincides with growing concerns over data leaks and calls for tax reforms for the wealthy. Former IRS contractor Charles Edward Littlejohn was recently sentenced to prison for leaking tax information about ex-President Donald Trump and several of America’s wealthiest individuals.
Littlejohn, now 38, passed this data to The New York Times and ProPublica between 2018 and 2020, in what prosecutors described as “unparalleled in the IRS’s history”. To avoid suspicion, he carefully crafted searches and extraction methods for the tax data.
Following the leaks, Rep. Jason Smith requested a review of the situation in February 2023. Commissioner Werfel is scheduled to testify before the House Ways and Means Committee on Feb. 15.
The inspector general report highlights numerous deficiencies in the IRS’s security, including audit trail logs for monitoring and identifying unauthorized access. Since 2002, TIGTA has issued seven reports detailing IRS audit trail deficiencies.
In response, Commissioner Werfel stated that increased funding through the Democrats’ Inflation Reduction Act has enabled significant improvements in data security, including audit trail deficiencies. He claims the security situation is “dramatically better today.”
The report does, however, suggest that terminated contractors could still have access in certain situations. Werfel denies this, asserting that terminated contractors can no longer access the IRS network or sensitive data. Nonetheless, the report concludes that for some sensitive systems, the IRS lacks adequate controls to deter unauthorised data removal.
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