Q. Media reports that the IRS was the victim of a data breach. Now the number of victims has increased to 334,000. How do we protect our personal data when it is required that it be reported to employer and government agencies?
A. This week the IRS updated information on its recent data breach where identity thieves used a tool on it’s website to obtain prior-year tax return information. The number increased by 220,000 for the total of 334,000 possible victims. Be aware, not only the IRS, but all companies keep some amount of sensitive information in their files either to identify customers or employees.
A data breach is the intentional or unintentional release or theft of secure information. It can be the improper disposal of personally identifiable information in the trash or a sophisticated cyber-attack on corporate computers by criminals. It can affect companies large or small.
The one common link in a data breach is the victim, the person whose identity, financial or personal information has been compromised. Be advised, not every data breach results in identity theft, and not every identity theft is tax-related identity theft.
The Internal Revenue Service says tax-related identity theft is when someone uses your Social Security number to file a false tax return claiming a fraudulent refund. Your tax account is most at risk if the data breach involves both your SSN and financial data, such as wages. Data breaches involving just credit card numbers, health records without SSNs or even driver’s license numbers, while certainly serious, will not affect your tax account.