February 26, 2024

IRS watchdog: Contractors who failed background checks maintained access to sensitive agency systems

A brand new IRS inspector common report mentioned the nation’s tax assortment agency continued to give 19 contractors access to sensitive systems regardless of having background reviews that had been returned as “not favorable.”

Despite having the unfavorable score returned as just lately as July 13, 2023, “These contractors still retained their access to one or more sensitive systems because the IRS did not take action to suspend or disable the contractors from the IRS’s systems, as required,” in accordance to a report issued this week by the Treasury Department’s inspector common for tax administration.

IRS Commissioner Daniel Werfel — who took over the agency final April — instructed The Associated Press that 4 of the contractors have since been terminated and the others have resubmitted their paperwork and obtained favorable background checks, including that “there’s no implicit implication of any kind,” he mentioned, “that these 19 contractors compromised taxpayer information in any way.”

An IRS spokesperson mentioned due to privateness points they may not present particular dates for when the problems had been flagged, however mentioned they had been “promptly resolved” when recognized by TIGTA.

The report comes as access to sensitive taxpayer data has sparked requires investigations — and requires reform on taxes for the rich.

Last week, former IRS contractor Charles Edward Littlejohn of Washington, D.C., was sentenced to 5 years in jail after pleading responsible to leaking tax details about former President Donald Trump and hundreds of the nation’s wealthiest individuals to information retailers.

Littlejohn, 38, gave knowledge to The New York Times and ProPublica between 2018 and 2020 in leaks that appeared to be “unparalleled in the IRS’s history,” prosecutors mentioned.

Littlejohn had utilized to work as a contractor to get Trump’s tax returns and punctiliously discovered how to search and extract tax knowledge to keep away from triggering suspicions internally, prosecutors mentioned in courtroom paperwork.

In February 2023, Rep. Jason Smith, the Republican chairman of the House Ways and Means Committee, despatched a letter to TIGTA asking for a overview of the leak. Smith’s workplace didn’t instantly reply to an Associated Press request for touch upon the report.

Werfel is ready to testify in entrance of the House Ways and Means Committee on Feb. 15.

In addition, the inspector common report outlined a slew of insufficiencies within the IRS safety, stating that it “has repeatedly reported that a key deficiency in the IRS’s detection and deterrence processes is not ensuring that all sensitive systems are providing complete, accurate, and usable audit trail logs for monitoring and identifying unauthorized access and for other investigative purposes.”

Since 2002, TIGTA has issued seven reviews that element the IRS’s audit path deficiencies, with the latest report being issued in October 2023, the report states.

Werfel mentioned that for the reason that agency has obtained funding by means of Democrats’ Inflation Reduction Act, it has been in a position to markedly enhance the safety of sensitive data, together with audit path deficiencies.

“Our data security and environment is dramatically better today than it was in 2017 to 2020 when this unauthorized access occurred,” Werfel said. “And it’s dramatically better today because we now have the resources to make the right investments to strengthen our data security. And we have made dramatic changes.”

The report additionally states there have been sure eventualities during which a terminated contractor might nonetheless have access, however Werfel mentioned that “once a contractor no longer works for the IRS, they have no access to our network and therefore no access to sensitive data.”

“The fact remains,” the report says, “for some sensitive systems, the IRS does not have adequate controls to detect or prevent the unauthorized removal of data by users.”


Associated Press reporter Lindsay Whitehurst contributed to this report.