The Internal Revenue Service (IRS) has revealed that there is a possibility that the personal data of tens of thousands of taxpayers could have been compromised by hackers posing as students. They apparently created a dubious scheme, posed as students and made use of an online tool for financial aid.
The IRS states that the breach could be of a more serious nature than the one that happened in 2015 when hackers gained access to tax return details of over 300,000 people by using stolen data. They then claimed and got refunds by filing fake returns using the stolen data.
The incident came to light in early March after the IRS shut down its Data Retrieval Tool that are used by families to import tax information to the Free Application for Federal Student Aid (Fafsa), on the website of the Education Department. Parents and students were angry that the shutdown happened at the peak of financial aid application season.
There are enough signs to show that the IRS is not fully equipped to deal with the new and sophisticated cyber threats by hackers. Dwindling staff and shrinking budget has a lot to do with these attacks.
The IRS is worried that the stolen data might be used by thieves to file fraudulent returns and steal refunds as they did in 2015.