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Source: IRS Audits Self Into Data-Theft Hot Seat

Taxpayers won't be the only ones explaining themselves to the government next week. So will the tax collectors.


U.S. Senator Chuck Grassley (R-Iowa) said he plans to hold the Internal Revenue Service (IRS) accountable for its almost 500 missing or stolen laptops over the last three years during a Senate Finance Committee hearing next week. According to an IRS internal audit, many of the machines were likely holding unencrypted, sensitive taxpayer data.

"It's hard to see why this is still a problem when the IRS knew about it more than three years ago," Grassley said in a statement. "One stolen IRS laptop could put thousands of taxpayers in jeopardy. I plan to ask what the IRS is doing to fix this problem for good."

The audit, released last week, found "limited definitive information" on the number of taxpayers' affected. However, a separate test on 100 laptops currently in use by IRS employees determined 44 laptops contained unencrypted sensitive data on taxpayers and IRS employees. The audit also found other mobile computer devices, such as Flash drives with unencrypted data.

"We believe it is very likely a large number of the lost or stolen IRS computers contained similar unencrypted data," the audit states. "We reported similar findings in July 2003, but the IRS had not taken adequate corrective actions."