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AP told IRS thinks data breach based in Russia

Stolen information part of scheme to claim fraudulent tax refunds

The Columbian
Published: May 27, 2015, 5:00pm

WASHINGTON — IRS investigators believe the identity thieves who stole the personal tax information of more than 100,000 taxpayers from an IRS website are part of a sophisticated criminal operation based in Russia, two officials told the Associated Press.

The information was stolen as part of an elaborate scheme to claim fraudulent tax refunds, IRS Commissioner John Koskinen told reporters. Koskinen declined to say where the crime originated.

But two officials briefed on the matter said Wednesday the IRS believes the criminals were in Russia, based on computer data about who accessed the information.

An IRS spokeswoman said Wednesday the agency couldn’t comment on the investigation.

The revelation highlights the global reach of many cybercriminals. And it’s not the first time the IRS has been targeted by identity thieves based overseas.

In 2012, the IRS sent a total of 655 tax refunds to a single address in Lithuania, and 343 refunds went to a lone address in Shanghai, according to a report by the agency’s inspector general. The IRS has since added safeguards to prevent similar schemes, but the criminals are innovating as well.

The information was taken from an IRS website called “Get Transcript,” where taxpayers can get tax returns and other tax filings from previous years. In order to access the information, the thieves cleared a security screen that required detailed knowledge about each taxpayer, including their Social Security number, date of birth, tax filing status and street address.

The IRS believes the criminals originally obtained this information from other sources. They were accessing the IRS website to get even more information about the taxpayers, which would help them claim fraudulent tax refunds in the future, Koskinen said.

The thieves have already used some of the information to claim as much as $50 million in fraudulent tax refunds, Koskinen said.

The IRS said it is notifying taxpayers whose information was accessed, and is providing them with credit monitoring services.

The IRS has launched a criminal investigation, and the inspector general is also investigating.

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