Ex-FBI official: IRS is a favorite hacking target

Wednesday, 10 Feb 2016 | 4:27 PM ETCNBC.com

An automated attack on the IRS’ computer systems in January used stolen personal data to create fake logins through the agency’s Electronic Filing PIN service.

About 464,000 Social Security numbers were used in the attack on the IRS.gov system, the agency said late Tuesday, and 101,000 of those numbers allowed the attackers to get at an E-file PIN. The PIN can be used to electronically file a tax return.

“No personal taxpayer data was compromised or disclosed by IRS systems,” the IRS said in a statement Tuesday. “The IRS also is taking immediate steps to notify affected taxpayers by mail that their personal information was used in an attempt to access the IRS application. The IRS is also protecting their accounts by marking them to protect against tax-related identity theft.”

The IRS also said that the attack was not related to an outage of its computer systems that hampered its ability to process tax returns last week.

“The IRS and taxpayer data is the gold standard. It’s the treasure trove of information that they’re looking for. They can do a lot with it,” said former FBI Assistant Director Chris Swecker on CNBC’s “Power Lunch” on Wednesday.

Though the culprit behind the attack has not yet been confirmed, the IRS is “the favorite target” of Russian criminal organizations, which were involved in previous IRS hacking attacks, Swecker added.

Hackers in 2015 were able to access tax information for what may have been as many 338,000 victims through the IRS’ Get Transcript system, the IRS previously reported. That system allows taxpayers to pull up returns and filings from years past.

“Taxpayer data or taxpayer returns have so much information that not only can they file false tax returns and get refunds, they can also sell that data on the black market and make an additional profit,” he said.

Using publicly available data to authenticate taxpayers is one of the main problems with the current system, Swecker noted. People oftentimes use questions that can be answered by looking at their Facebook or LinkedIn pages, which are easily accessible to hackers.

“This is what organized crime looks like in the year 2016. These are the most profitable, most capable criminals in the world and we’ve got to do a better job of keeping them out.”

— NBC News contributed to this report.

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