IRS Probes Possible Privacy Breaches

The Internal Revenue Service is investigating whether unauthorized people gained access to sensitive taxpayer and bank account information but has not found any privacy breaches, officials said Friday.

The U.S. tax agency -- whose databases include suspicious activity reports from banks about possible terrorist or criminal transactions -- launched the probe after the Government Accountability Office said in April that the IRS “routinely permitted excessive access” to the computer files.

The GAO team was able to tap into the data without authorization and gleaned information such as bank account holders’ names, Social Security numbers, transaction values and any suspected terrorist activity. It said the data were at serious risk of disclosure, modification or destruction.

“There is no evidence that anyone who was not authorized accessed the data outside the GAO,” said Sheri James, a spokeswoman for the Treasury’s Financial Crimes Enforcement Network which was working with the IRS to address the concerns of the GAO, the investigative arm of Congress.

The network is responsible for administering the Bank Secrecy Act, under which banks must file suspicious activity reports on transactions they believe could be linked to money laundering or terrorism financing. The IRS stores that data for the network.

Unauthorized access to the information held by the IRS raises concerns about the privacy rights and civil liberties of innocent banking clients and taxpayers.

Concerns about privacy violations through weak computer security are mounting in the U.S., where a string of companies this year have reported stolen or misappropriated customer data.

Also Friday, the University of Connecticut said that names, dates of birth and Social Security numbers of 72,000 students, professors and employees might have been stolen by a computer hacker.