IRS Security Holes Leave Taxpayer Data At Risk, GAO Says

Just in time for tax season: The Internal Revenue Service (IRS) is under fire again for failing to take the necessary steps needed to prevent security breaches targeting sensitive taxpayer information.

A new Government Accountability Office (GAO) report (PDF) says the IRS still has not addressed most security weaknesses previously highlighted in past audits by the watchdog agency.

The GAO has advised IRS commissioner Douglas Shulman to deploy an agencywide security program, and has provided the IRS with recommendations on how to correct the outstanding security weaknesses in the agency's network and systems infrastructure. The GAO's findings are based on an audit conducted between April 2008 and January 2009.

One big hole: The IRS still allows any user on its internal network to get IDs and passwords for mission-critical applications even if his job doesn't require it, leaving the door open for abuse, according to the GAO.

"Despite IRS' progress, information security control weaknesses continue to jeopardize the confidentiality, integrity, and availability of financial and sensitive taxpayer information. IRS did not consistently implement controls that were intended to prevent, limit, and detect unauthorized access to its systems and information," the report says.

Among the security woes documented in the GAO report: The IRS didn't always enforce strong passwords, and it didn't ensure that only authorized users access applications. The agency also did not consistently encrypt some sensitive data, nor did it "effectively" monitor changes on its mainframe or protect is computer resources "physically."

The IRS still transmits data unencrypted from its financial accounting system, for instance, according to the GAO.

The GAO says the main reason the IRS still hasn't corrected these security weaknesses is that it has not yet implemented an agencywide security program. "Specifically, IRS did not annually review risk assessments for certain systems, comprehensively test for certain controls, or always validate the effectiveness of remedial actions," the GAO report says. "Until these weaknesses are corrected, the agency remains particularly vulnerable to insider threats, and IRS is at increased risk of unauthorized access to and disclosure, modification, or destruction of financial and taxpayer information, as well as inadvertent or deliberate disruption of system."

Some good news, however, did emerge from the GAO report: The IRS has fixed 49 of 115 problems cited by the GAO in previous audits, including implementing controls for unauthenticated network access and user IDs on the mainframe, encrypting sensitive data that travels over its network, improving vulnerability patching, and updating its contingency plans.

According to the GAO, the IRS' Shulman said the IRS is committed to locking down security on its systems and will create an action plan to address each of the GAO's recommendations.

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