Taxpayer Information 'At Risk' In State Agencies

by Mike Godfrey, Tax-News.com, New York

27 February 2003

According to an article from Dow Jones Newswires earlier this week, the Treasury Inspector General for Tax Administration (known as TIGTA) has said that tax records held on State computer files across the United States are "at risk"

The 250 plus agencies across the union who receive, store and handle tax records are being criticised by TIGTA for not doing enough to ensure the security of this information. It said the agencies in conjunction with the IRS had a duty to uphold the privacy of the tax-payer, and the system as it stood was potentially open to abuse by "hackers and disgruntled employees".

Dow Jones Newswires cited a recent report from TIGTA that quoted the organisation as saying "unencrypted data was being transmitted between sites, controls were not always adequate to authenticate users, and activity logs (audit trails) were not always used to detect improper activity"

TIGTA's report has made recommendations to tighten internet security with regards to storage and transmission of tax records. This includes agencies undergoing yearly self-assessment programs in accordance with guide-lines set out by the National Institute of Standards and Technology. It also proposes that the IRS Office of Governmental Liaison and Disclosure recruit new staff and adequately train existing staff, as well as the hiring of outside specialists to conduct reviews of procedures and security.

The article concludes that the IRS is aware of the situation, saying the issue "warrants increasing attention".

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