Last week the IRS issued a sole source $7.25 million dollar contract to Equifax in order to confirm taxpayer identities and make sure no fraud is committed. The company is currently facing a serious security breach which led to the revealing of millions of Americans’ personal information.
This decision was severely criticized by lawmakers due to the recent breach and Orrin Hatch, Senate Finance Chairman told Politico it was “irresponsible for the IRS to turn over millions in taxpayer dollars to a company that has yet to offer a succinct answer on how at least 145 million Americans had personally identifiable information exposed.”
The no-bid contract ensures that the credit bureau is the only provider of these services, though it is unclear why no other company applied for the contract. Senator Ron Wyden said he would look into why this is the case and would try to prevent future breaches from happening.
The IRS issued a statement saying that similar services are provided by Equifax and that they do not present any risks to their data. The information which was compromised by the breach, revealed by Equifax in September, included the Social Security numbers and names of over 145 million citizens.
The bureau, which determines whether customers qualify for certain loans or mortgages, was also criticized for giving unclear instructions to its customers, thus restricting their powers to sue. A criminal investigation was also opened by the Justice Department after three of the bureau’s executives sold $1.8 million worth of their company stock right before the breach was unveiled to the public.
The IRS as well suffered tax fraud in 2013, losing almost $6 billion and is often criticized for its weak security system and outdated technology.
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