What Does the IRS Hack Mean for Minnesotans?

Published On: 18th August 2015

From the internet

It just came out that more taxpayers were compromised as a part of the IRS data hack.

Data hacks are serious because it means that individuals’ data are compromised. Now the IRS believes that the data of 300,000 people was breached.

In May, the IRS revealed the breach, reporting that the information of 114,000 taxpayers was stolen. But now the IRS has performed a deeper analysis of what occurred and says there are at least 220,000 cases where hackers took taxpayer records. The agency says that the hackers failed at accessing the data of 280,000 individuals.

The way the hackers gained access was they accessed the area of the IRS website where tax transcripts can be obtained. This is the area that allows a taxpayer to see their past income tax returns. They can print them off and use them for such things as applying for a loan. It is a convenience for those who may not be able to find copies of their tax refunds at home.

It is believed that the hackers are based in Russia and that the hack was part of an organized crime operation.

The IRS says that the data access meant the hackers had to clear a very complicated multi-step authentication process. To get a person’s info, they would need their date of birth, address, and social security number. They would also have to answer a series of security questions, such as knowing the mascot of the taxpayer’s high school or their mother’s maiden name.

The IRS says that the hackers were able to get personal information about individuals by looking at their social media profiles. By looking at social media, they could figure out high school mascots, mothers’ maiden names, cities where the taxpayers were born, and even the names of childhood best friends. All of this is information that is readily shared over social media by individuals thinking that sharing such information is harmless. All a hacker has to do is look at a profile, find the listing of family members, and see a person’s mother with her maiden name as a part of her username, for example.

The IRS feels that by accessing taxpayer data, the hackers will be able to create fraudulent tax returns much easier than they have in the past. When fraudulent tax returns are prepared, the hackers can potentially collect the tax refund for the actual taxpayer. The transcripts give access to previous year tax information, which is very important to have during the eFile process when verifying identity.

The IRS says that they will begin mailing letters to the taxpayers whose data may have been accessed. To prevent fraud, they will issue a special PIN number to verify that the tax return being filed is the real refund and not a fraudulent one.

Because of the breach, the IRS has shut down the ability for individuals to obtain their past year tax transcripts.

It is unknown how many taxpayers in Minnesota may have been affected by the breach.