WASHINGTON, D.C. (FEBRUARY 26, 2016)
 
BY MICHAEL COHN

The Internal Revenue Service said Friday that an investigation into last year’s data breach in the online Get Transcript application revealed it affected hundreds of thousands more taxpayers than originally believed.
Last May, the IRS revealed that identity thieves had used the online application to access the tax returns of 104,000 taxpayers (see IRS Detects Massive Data Breach in ‘Get Transcript’ Application). Organized criminals used taxpayer-specific data that they acquired from non-IRS sources, including Social Security information, birth dates and street addresses. In August, the IRS admitted that another 220,000 taxpayers had been affected (see Extra 220,000 Hit by IRS ‘Get Transcript’ Breach).
On Friday, the IRS said a nine-month investigation by the Treasury Inspector General for Tax Administration found potential access of approximately 390,000 additional taxpayer accounts during the period from January 2014, when the application was launched, through May 2015, when the breach was detected. In addition, 295,000 taxpayer transcripts were targeted but access was not successful. All taxpayers are being notified and they are being offered Identity Protection PINs.
“This expanded review has identified additional suspicious attempts to access taxpayer accounts using sensitive information already in the hands of criminals,” said the IRS. “The IRS is moving immediately to notify and help protect these taxpayers, including through free identity theft protection services as well as Identity Protection PINs.”
Mailings to these taxpayers will start February 29. The IRS noted that the “Get Transcript” web application has been offline since this incident was discovered last May. Taxpayers and tax preparers can only go online to order transcripts of prior tax returns that are sent to them by mail. The old application allowed the transcripts to be viewed online and printed.
“The IRS is committed to protecting taxpayers on multiple fronts against tax-related identity theft, and these mailings are part of that effort,” IRS Commissioner John Koskinen said in a statement. “We appreciate the work of the Treasury Inspector General for Tax Administration to identify these additional taxpayers whose accounts may have been accessed. We are moving quickly to help these taxpayers.”
As it did last year, the IRS said it is moving aggressively to protect these additional taxpayers from tax-related identity theft. This includes:
• Notifying by mail those taxpayers whose transcripts were accessed and those taxpayers whose transcripts were targeted but not accessed. These mailings will provide guidance and notify them that criminals may have their personally identifiable information.
• Informing taxpayers whose transcripts were accessed that they can request an Identity Protect PIN by completing a Form 14039, Identity Theft Affidavit. An IP PIN provides an additional layer of protection for the taxpayer’s SSN on the federal tax return.
• Offering taxpayers whose returns were accessed a free Equifax identity theft protection product for one year, and encouraging taxpayers to place a “fraud alert” on their credit accounts.
• Placing extra scrutiny on tax returns with taxpayers SSNs.
• Placing special markers on these taxpayer accounts to advise IRS assistors that the caller is part of this event.
To further protect taxpayers, the IRS said it is also sharing information about this incident with the states as part of the Security Summit effort. This is part of a larger effort undertaken this tax season to protect against identity theft refund fraud through the Security Summit group, a partnership between the IRS, state revenue departments and the tax industry.
“The IRS takes the security of taxpayer data extremely seriously, and we are working aggressively to protect affected taxpayers and continue to strengthen our systems,” said the agency.
Earlier this month, the IRS disclosed a data breach in its Electronic Filing PIN application (see IRS Detects Attack on Electronic Filing PIN App). At the time, the IRS said it had identified unauthorized attempts involving approximately 464,000 unique SSNs, of which 101,000 SSNs were used to successfully access an E-file PIN.

When you file your taxes, you have options on how to receive your refund. The best way to get it is by direct deposit. Eight out of 10 taxpayers get their refunds by direct deposit. Here are six good reasons why you should do the same in 2016:
IRS Direct Deposit:
1. Is Fast.  The fastest way to get your refund is to electronically file your federal tax return and use direct deposit. Use IRS Free File to prepare and e-file your federal return for free. You can still use direct deposit even if you file a paper tax return.
2. Is Secure.  Since your refund goes directly into your account, there’s no risk of having your refund check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.
3. Is Convenient.  With direct deposit, your refund goes directly into your bank account. There’s no need to wait for your check to come in the mail.
4. Is Easy.  Choosing direct deposit is easy. When you e-file, just follow the instructions in the tax software. If you file a paper return, the tax form instructions will guide you. Make sure that you enter the correct bank account and routing number.
5. Has Options.  You can split your refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. Beginning this year, there is a new retirement account offered by the U.S. Treasury Department. It’s called a MyRA account and you can designate all or a portion of your refund to a new MyRA account if you mark the “savings” box in the refund section of your return. Use IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), to deposit your refund in up to three accounts. Don’t use Form 8888 to designate part of your refund to pay your tax preparer.
6. Saves Money. Direct deposit also saves you money. It costs the nation’s taxpayers more than $1 for every paper refund check issued but only a dime for each direct deposit made.
You should deposit your refund into accounts in your own name, your spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Check with your bank for their direct deposit requirements.
There is a limit of three electronic direct deposit refunds made into a single financial account or pre-paid debit card. Taxpayers who exceed the limit will receive an IRS notice and a check refund in the mail. Helpful tips about direct deposit and the split refund option are available in Publication 17, Your Federal Income Tax. You can view, download and print tax products on IRS.gov/formsanytime.  

WASHINGTON, D.C. (FEBRUARY 5, 2016)
 
BY MICHAEL COHNThe Internal Revenue Service said it resumed processing individual and business tax returns at approximately 5 p.m. Thursday following resolution of its system outage.

Many of the tools and applications came up earlier on Thursday morning, including “Where’s My Refund” on IRS.gov. The systems had been down since Wednesday (see IRS Systems Outage Shuts Down Tax Processing).
“IRS teams worked throughout the night and around the clock on this system outage,” IRS Commissioner John Koskinen said in a statement. “Our processing systems are back in business. Taxpayers should see little, if any, impact on their tax returns or refunds. We apologize for the inconvenience this caused, and we appreciate the support and patience from taxpayers as well as our partners in the tax community and state revenue departments.”
The IRS emphasized that taxpayers do not need to take any additional steps or action due to the outage, including people who filed just before or during the outage. Throughout this period, taxpayers were able to continue to send their tax returns to their e-file provider; these companies have already started sending these tax returns into the IRS.
Taxpayers who have received a specific refund date from the “Where’s My Refund?” tool on IRS.gov should not be affected by the outage, the IRS noted. The IRS reminded taxpayers that many variables factor into the processing of tax refunds, including fraud prevention efforts, but we continue to anticipate that nine out of 10 taxpayers will receive their refunds within 21 days after being accepted by the IRS. In addition, the IRS pointed out that IRS.gov remains the best place to check for information on refunds. Additional information is available athttps://www.irs.gov/Refunds/What-to-Expect-for-Refunds-This-Year
The IRS said it is continuing to examine the underlying cause of the outage yesterday as well as monitoring any follow-up issues. At this time, the IRS added, the situation appears to be a hardware failure.

WASHINGTON, D.C. (FEBRUARY 3, 2016)
 
BY MICHAEL COHN

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The Internal Revenue Service said Wednesday evening its tax-processing systems have suffered a hardware failure and that tax processing could be affected into Thursday.
“The IRS experienced a hardware failure this afternoon affecting a number of tax processing systems, which are currently unavailable,” said the IRS. “Several of our systems are not currently operating, including our modernized e-file system and a number of other related systems. The IRS is currently in the process of making repairs and working to restore normal operations as soon as possible. We anticipate some of the systems will remain unavailable until tomorrow.”
The IRS added that it remains in close contact with e-file software transmitters and the tax community during this period.
“A number of taxpayer and tax practitioner tools are unavailable,” the statement continued. “IRS.gov remains available, although a number of the services on the site are not, including Where’s My Refund.”
However, the IRS noted that taxpayers can continue to prepare and file their tax returns as they normally would. “Taxpayers can continue to send their tax returns to their e-file provider; these companies will hold the tax returns until the IRS resumes accepting electronic tax returns,” said the IRS. “Taxpayers who have already filed their tax returns do not need to take any additional action.”
As of Wednesday night, the IRS said it is still assessing the scope of the outage. “At this time, the IRS does not anticipate major refund disruptions; we continue to expect that 9 out of 10 taxpayers will receive their refunds within 21 days.”