If you were planning to grab a tax transcript off the IRS’s online “Get Transcript” program, you’re out of luck. The application has been closed down because about 100,000 taxpayer accounts were broken into.
The IRS wasn’t hacked. The thieves attempted to break into 200,000 accounts using information they were able to accumulate from various outside sources. Basically, they logging in as the taxpayer and were able to answer the security questions and accessed 100,000 accounts. The rest of the accounts weren’t hacked because the thieves didn’t have the information to pass the security questions.
The information used for the break in came from non IRS sources. Name, address and Social Security numbers could have come from a date breach at a credit card company or insurance provider. Other information could have come from the taxpayers’ posting on social media or other web sites. Then it’s just a matter of plugging in the information they have until they get in. For half the attempts, they had mined enough information to get to and download taxpayer transcripts. The thieves now have even more information to work with on another theft.
What information is on the transcripts? Each one has different information but if they took all 5 transcripts;
- Name, address and Social Security Number which they already had to get in.
- Dependent’s Social Security Number and first four letters of their last name.
- When a return was filed and the refund or balance due on that return.
- All the details on the return; adjusted gross income, how much income each category, credits and deductions and filing status.
- Employer names, address and Employer Identification Number (EIN) from the W-2 as well as the amounts paid, 401K, health insurance and other employee benefits on the W-2.
- Payer names, address and EIN and the amounts received for all 1099s including retirement, interest, dividends and brokerage account, property sales, Social Security received.
- The same information from 1098’s from mortgage holders and schools for education benefits.
- The name, address and SSN or EIN for day care providers.
- The same information from any K-1’s issued (trusts, estates, partnership or S-Corp)
- If you e-filed, the PIN number you used.
- If you used a paid preparer, their EIN and PIN
That’s a quick list based on transcripts I have in the office. I can’t remember how the spouse’s information is handled but I think the Social Security Number and first 4 letters are on some transcripts.
The IRS has traced the break-ins to the “Get Transcript” applications back to February through the middle of May. Besides closing down the online app, they are sending letters to all 200,000 taxpayers whose transcript were victims of a break-in or attempt. This is to give all of them a heads up that a thief has some of their personal information. The will also offer free credit monitoring for those whose transcripts were accessed. The IRS is continuing to investigate the problem as is the Treasury Inspector General for Tax Administration and the IRS’s Criminal Investigation Unit.
If you need a transcript from the IRS before “get Transcripts” is back online, you have a couple of options. You can submit a Form 4506T or 4506T-EZ requesting a transcript be mailed to you. You can also use a tax pro. They will need to have you complete a Form 2848 – Power of Attorney which will be faxed to the IRS. Once the Form has been processed, they will able to use e-Services to pull a transcript. (This was still working as of 5/27/15).
The IRS stresses that this problem only affects the “Get Transcript” application. E-filing, “Where’s My Refund’, and other IRS systems have not been compromised.