Contract with Equifax Temporarily Suspended

The $7.2 million contract that the IRS recently awarded to Equifax has been temporarily suspended. Under the contract, the company was to verify taxpayers’ identities when they create accounts on the company’s website, as a means to prevent fraud. As long as the suspension lasts, taxpayers will be unable to create new accounts, while those who have already established ones can still access online records.

The IRS came to its decision after another Equifax data breach was reported by the media. Last month, Equifax revealed that their website was hacked, leaving vulnerable the personal information of over 145 million U.S. citizens. The company was also heavily criticized for charging its customers to check whether their information has been compromised and for tweeting a link that directed them to a fake website. The credit-reporting company’s security systems will continue to be reviewed by the IRS, which issued a statement saying the suspension is just a precaution.

“The IRS emphasized that there is still no indication of any compromise of the limited IRS data shared under the contract. The contract suspension is being taken as a precautionary step as the IRS continues its review,” the agency spokesman said.

The IRS’s decision to award the no-bid contract to Equifax, despite reports of security breaches, was condemned by lawmakers who expressed their doubts regarding the company’s ability to handle such sensitive data and suggested revoking the deal, Politico reports.

Earler this month, Orrin Hatch, Senate Finance Chairman said 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 IRS, on the other hand, believes Equifax is fully capable of offering the service. When the contract was first issued the IRS released a statement saying that similar services are provided by Equifax and that they do not present any risks to their data.

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