Unauthorized access of tax returns rebounds, disclosure violations stay low

The number of cases of unauthorized access of tax return data at the Internal Revenue Service are rebounding somewhat from a high in 2018, according to a recent evaluation by the Treasury Inspector General for Tax Administration.

In 2023, 125 violation cases of Unauthorized Access, Attempted Access, or Inspection Taxpayer Records within the IRS were recorded by TIGTA. In 2018, a high of 135 cases were recorded. The following year, that number dropped to 115 and has been slowly climbing in subsequent years.

However, the number of instances in which taxpayer information was disclosed has remained low since 2018 when 126 cases were reported. That number dropped in 2019 to 58 cases and has remained low. In 2023, 46 cases were reported.

TIGTA agreed to review how the IRS grants access to and safeguards Federal Tax Information on its various systems in response to a massive leak that was reported in June 2021. FTI includes a taxpayer’s identity, the nature or amount of their income, deductions, exemptions, assets, liabilities, net worth or tax withheld, among other things.

In its reports, TIGTA provides information on unauthorized access cases and the difficulty prosecuting the cases, the systematic issues previously reported, and TIGTA’s recently issued reports and ongoing audits on these issues.

Since 2018, there have been a total of 1,028 UNAX violation cases investigated by TIGTA. Sixty-two percent of those cases were referred but declined for prosecution, 37% were never referred for prosecution, and less than 1% have been accepted for prosecution or are pending prosecution determination.

Source: Accounting Today