The IRS in action, incompetent to the end.
IRS flaws open door to identity theft | CNET News.com
: "Along with $2 trillion in tax receipts, the IRS also collects information on money laundering and other possible financial crimes for the government's financial-intelligence office.
But barriers between tax returns and money-laundering reports don't exist, the GAO found. Thus a police officer checking up on money-laundering reports can also read personal tax returns, in violation of federal law.
In all, 7,500 IRS employees, law enforcers and outside contractors can access and modify tax returns and financial-crime reports, the GAO found.
A master list of passwords and user names is also widely available, the report said.
'Increased risk exists that unauthorized users could...claim a user identity and then use that identity to gain access to sensitive taxpayer or Bank Secrecy Act data,' the report said.
Recent incidents may have exposed sensitive information in nearly half-a-million profiles of U.S. citizens maintained by data brokers ChoicePoint and LexisNexis, a division of Reed Elsevier.
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In a letter dated April 14, a Treasury Department official said many of the security holes portrayed in the report have been fixed and others should be completed by October.
The agency will figure out whether tax returns and financial-crime information have been inappropriately disclosed, Acting Deputy Treasury Secretary Arnold Havens said.
An IRS representative declined to comment further."