IRS spends $2.7 million on tool that paid out $39 million to crooks

The Internal Revenue Service reports paid $2.7 million for a system that allows citizens to obtain previous year tax returns but also allowed crooks to get $39 million of taxpayer funds. In May, the IRS announced that crooks had used the same tool, called Get Transcript, to copy at 114,000 taxpayer files. On Aug. 17, the agency disclosed a more-extensive retroactive investigation into the matter shows crooks compromised about 220,000 additional taxpayer accounts.

To date criminals have used some of the  data to illegally claim tax refunds totaling about $39 million, IRS officials have said.

IRS officials reported to the White House Office of Management and Budget it spent $2 million on a system called “Get Transcript” and $717,000 on a system called “Get Transcripts,” according to the IT Dashboard, a federal spending website. It’s unclear why there are two systems listed. The dashboard, however, often contains outdated and incomplete data, according to numerous Government Accountability Office audits.

Criminals in possession of previously stolen personal information on individuals used that intelligence to correctly answer several security questions about those taxpayers on Get Transcript. Then, the crooks then copied down their targets’ financial data.

The Get Transcript service, which launched last year, was ultimately shut down in May once officials realized criminals were bypassing security protocols.

The IRS disbursed $5.8 BILLION to fraudsters in 2013, according to the GAO.

Jeffrey Newman represents whitleblowers