INSECURE IRS -- The Stuff that Nightmares are Made Of....

We've all heard about identity theft. And we all probably know at least one person that it's happened to. Therefore, everyone is super cautious about paying their bills on-line & purchasing on-line. (Many just won't do it believing it isn't worth the risk.) We watch our credit reports & check & recheck our bank & credit card statements to make sure that there are no unauthorized purchases, withdrawals or transfers. (And we should!) Consumers spend millions of dollars a year on anti-spyware software, virus protection and firewalls to further protect the outside world from hacking in.

Now it turns out that one of the biggest threats comes from the agency you love to hate, the Internal Revenue Service. Yes, that same agency that has the "right" to seize your property, empty your bank accounts & freeze your assets should it suspect impropriety. We all know that the IRS considers the taxpayer guilty until proven innocent. (I was paid $800 by RKO on a freelance job, which I reported. However, someone at the IRS entered the amount as $80000. So I received one of their "lovely" threat letters & had my bank accounts frozen until I could prove that all that was reported by RKO was the $800 that I declared.)

"Computer-security flaws at the U.S. Tax-collection agency expose millions of taxpayers to potential identity theft or illegal police snooping." This is according to a congressional report released on April 18th, three days after all good little Americans filed their tax returns.

Further "the Internal Revenue Service also is unlikely to know if outsiders are browsing through citizens' tax returns, because it doesn't effectively police its computer systems for unauthorized use," the Government Accountability Office (GAO) found. "The IRS has promised to fix these issues & over the past several years has taken steps to protect the information it collects," the report found. The agency has fixed 32 of the 53 problems that turned up in a 2002 review, the GAO said. But the GAO found 39 new security problems on top of the 21 that remain unfixed.

WHY DIDN'T WE HEAR ABOUT THIS? Because the world was too busy looking for Papal smoke & then a runaway bride.

Did you know that 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? (I didn't until I read the GAO report. However, this is logical since I know that many a criminal has been nailed for tax evasion when all else has failed.) However, 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. (Moral: Thou shalt not piss off a cop.)

In all, 7,500 IRS employees, law enforcers and outside contractors can access and modify tax returns and financial-crime reports, the GAO found. (Who are these outside contractors?! What kind of security vetting do they go through?!)

As if the preceding weren't enough: A master list of passwords and user names is also widely available, the report said.

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 spokesman declined to comment further. (Doesn't this reassure you?!)

By now, you're probably as appalled as I. Now that this GAO report is a matter of public record, the backlash will only bring more commissions, panels & outside contractors into the mix to try & fix the system. This is how our overblown, overgrown government operates.

I have never been more convinced that our antiquated tax system should be scrapped. No one understands it. And the Code grows in size yearly. If we would go to a FLAT TAX then (in theory, because the loopholes will be obliterated along with the rest of the code) everyone would pay their fair share. The size of the agency could be REDUCED & with all that extra time on their hands maybe they could go after the real criminals & not take 3 years to solve their security issues!