Contractors with failed background checks retained access to sensitive IRS systems, reveals watchdog

IRS Contractors and Sensitive Systems

IRS Contractors Retained Access to Sensitive Systems Despite Unfavorable Background Reports

According to a recent report by the Treasury Department’s inspector general for tax administration, the IRS continued to grant 19 contractors access to sensitive systems even after receiving background reports that were deemed “not favorable”. This access was maintained despite the IRS’s requirement to suspend or disable contractors with unfavorable background checks.

IRS Commissioner, Daniel Werfel, who assumed his position in April, informed The Associated Press that four of the contractors have been terminated while the others have resubmitted their paperwork and received favorable background checks. He emphasized that there is no evidence to suggest that these contractors compromised taxpayer information.

The IRS spokesperson, citing privacy concerns, did not disclose specific dates when the issues were flagged but assured that they were promptly resolved upon identification by the inspector general.

Concerns over Taxpayer Information Security

This report surfaces amidst growing concerns regarding access to sensitive taxpayer information, leading to calls for investigations and tax reform targeting the wealthy.

Leak of Tax Information and Subsequent Conviction

Recently, former IRS contractor Charles Edward Littlejohn was sentenced to five years in prison for leaking tax information about former President Donald Trump and numerous wealthy individuals to news outlets. Prosecutors described the leaks as unprecedented in the IRS’s history. Littlejohn strategically obtained Trump’s tax returns and skillfully extracted tax data to avoid raising internal suspicions.

Rep. Jason Smith, the Republican chairman of the House Ways and Means Committee, had urged the inspector general to review the leak. However, Smith’s office has not yet responded to a request for comment on the report.

Insufficiencies in IRS Security

In addition to contractor access concerns, the inspector general report highlighted various deficiencies in the IRS’s security measures. It noted that the IRS has repeatedly failed to ensure complete, accurate, and usable audit trail logs for monitoring and identifying unauthorized access to sensitive systems. This deficiency has been outlined in seven reports issued by the inspector general since 2002, with the most recent report published in October 2023.

Werfel acknowledged the agency’s shortcomings but emphasized that funding through the Democrats’ Inflation Reduction Act has significantly improved the security of sensitive information, including addressing audit trail deficiencies.

Despite these improvements, the report emphasized that the IRS still lacks adequate controls to detect or prevent the unauthorized removal of data from certain sensitive systems.


Overall, the report’s findings underscore the need for enhanced security measures and stricter adherence to background check protocols within the IRS. While efforts have been made to address these concerns, there is still work to be done to ensure the protection of taxpayer information.

Associated Press reporter Lindsay Whitehurst contributed to this report.

Read More of this Story at – 2024-02-09 20:08:13

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