tax returnsThe IRS recently announced that thieves used stolen social security numbers and other information in its systems to access prior-year tax return information for approximately 100,000 U.S. households. According to the Associated Press, this information was then used to file fraudulent tax returns in order to attempt to collect on money owed. An investigation is being conducted by the Treasury Inspector General for the Tax Administration as well as the IRS’ Criminal Investigation unit to determine the specifics. According to IRS Commissioner John Koskinen, the perpetrators were experienced and knew what they were doing.

How did the thieves access the IRS systems?

The criminals obtained the prior-year tax return information through an IRS system called “Get Transcript.” This system enables people to get transcripts of their past tax returns, which are sometimes required for purposes like mortgages or financial aid. In order to access each transcript, the thieves had to get through a screen that asked for various information about the taxpayer in question — including social security number, date of birth, tax filing status and home address. This means that the thieves already had this information on hand before using it to access the system, which is worrying. However, considering how many data breaches have occurred over the past year, it’s not surprising that information gathered from these sources is being used to commit fraud.

Thieves accessed the “Get Transcript” system from February to mid-May 2015. The agency was tipped off to the fraud when its technicians noticed an increase in transcript requests. The IRS has temporarily shut down the system while it investigates, but people who need to obtain a prior-year tax return can still apply for their transcripts by postal mail. Information from prior-year tax returns is helpful in filing fraudulent tax returns because it makes them easier to pass off as legitimate.

What is the IRS doing to protect me?

It’s worrying that thieves had as much personal information about each successful fraudulent application as they did. Overall, there were approximately 200,000 attempts made to obtain tax return information from “Get Transcript,” although only 100,000 of those were successful. The IRS will be providing free credit report monitoring to those 100,000 who were affected. It will be notifying all 200,000 taxpayers whose information was used, which is important since those people’s identities are certainly at risk. This type of breach is always alarming, considering how much information a government agency like the IRS stores about U.S. citizens. An incident like this can shake people’s confidence in the systems designed to protect their privacy.

Although tax identity theft is almost impossible to catch until you attempt to file your return each year, there are some tips that can help you protect your identity during tax season — and beyond. Follow our identity theft protection blog for more information on protecting your identity in every aspect of your life.