IRS Accidentally Exposes 120,000 Confidential Information of Taxpayers Online

The Internal Revenue Service said on Friday that it had unintentionally disclosed a batch of taxpayer information related to some non-profits and other tax-exempt organizations, exposing up to 120,000 people's details.

The IRS said in a statement that the accidentally released data did contain information from Form 990-T, which is used by tax-exempt entities to report unrelated business income, but that it did not contain any Social Security numbers, "detailed account-holder information," or personal income tax returns.

IRS Admits Exposing Taxpayers' Info

Only 501(c)(3) organizations must make their Form 990-T accessible to the public. The IRS's search tool for tax-exempt groups unintentionally made data from some non-501(c)(3)s available for mass download, the organization stated.

Per CNN, the IRS stated that "in certain cases, the data does include person names or business contact information," adding that the organization has now deleted the files from display on its website and would be getting in touch with impacted taxpayers immediately. "The IRS is still looking into this matter."

The Wall Street Journal claims that the event revealed information on company revenue from specific individual retirement accounts that was required to be reported on Form 990-T; the IRS statement does not corroborate this. The Treasury Department intended to inform "important members of Congress," according to The Journal, about the unintentional leak.

According to officials, an IRS research staffer found the error recently and alerted the IRS, which is required by federal law to notify Congress anytime a security problem happens.

The error has led to a thorough investigation of the way the IRS manages and disseminates both private and public information. The mistake is the most recent breach of confidential information the IRS has experienced while seeking to enter the twenty-first century.

ProPublica released hacked documents of the highest-earning Americans last year, which led to a federal inquiry against the tax agency. In connection with the case, the FBI has not yet made any arrests or carried out any search warrants.

Bloomberg reports that the Treasury Department stated that the IRS was aware of the problem and has removed the information from its website. The Treasury Department stated that the problem was discovered on August 26; however, the Treasury made no indication of how long the data was accessible for searching or downloading on the IRS website. The Treasury Department stated that the IRS will be getting in touch with the impacted taxpayers in the coming weeks.

IRS Commissioner Recently Provided Little Assurance to Taxpayers

Meanwhile, IRS Commissioner Charles Rettig hailed a directive by Treasury Secretary Janet Yellen last week, promising to avoid an increase in audit levels for households earning less than $400,000 "relative to recent years" and directing that "any additional resources" given to the agency should not be used to increase these audit levels.

Of course, neither a "directive" nor the fictitious intents of the commissioner or secretary have the legal power of law. Families and companies should be worried, even if they take them at their word, The Washington Examiner via MSN reported.

Compared to earlier or more recent years, audit rates are currently lower. Small company and middle-class family audit rates might therefore rise without inadvertently contradicting the IRS and Treasury assertions.

Additionally, more families will fall victim to this tax trap every year as a result of inflation rapidly pushing their incomes (but not their purchasing power) over this non-legally binding threshold of $400,000.

The legislation authorizing these hires specifies that the funds be used to deliver a 69% increase in enforcement - as opposed to operations support, taxpayer services, and business systems modernization. The commissioner also stated that the agency's 87,000 new hires will be primarily focused on "badly needed, meaningful service improvements at the IRS."

These additional agents will include some armed ones. There would be 870 additional armed agents, or a 41% increase over the 2,100 already employed, even if only 1% of the new recruits went to the IRS Criminal Investigation division, as the commissioner said.