In Fiscal Year 2010, taxpayers filed over 230 million tax returns that contained sensitive financial information. Because many IRS employees must have access to sensitive taxpayer information to administer the Nation’s tax system, the IRS must be particularly cognizant of hiring only those applicants who hold themselves to the highest standards of integrity. The IRS uses several controls to deter and detect the abuse of sensitive information. Pre-screening applicants and conducting background investigations on them are the initial steps in the process of ensuring that the IRS meets the highest standards of honesty, integrity, and security.
The IRS has implemented controls designed to ensure that applicants pursuing permanent or temporary employment with the IRS are suitable, and background investigation requests are properly initiated. However, our review at four of nine Employment Operations branch offices revealed that nearly 77% of the cases reviewed (507 of 662 cases) did not have sufficient documentation that would allow us to verify that the Employment Operations offices completed all of the required pre-screening steps before the employee reported for duty.
It is troubling that the IRS has expended millions of dollars enacting tax legislation —including the licensing of tax preparers--all in the name of “protecting” the taxpayer, while storing hundreds of millions of tax retuns on inadequately secure networks and not properly vetting 77% of their new hires–who have access to highly sensitive personal information. This is enough to make one ponder if the IRS itself bears at least some responsibility in the recent sharp uptick in identity theft that many taxpayers have become victims of.