The IRS commissioner appeared before a Senate Committee and testified that the recent breach was a result of budget cuts.

Commissioner John Koskinen blamed outdated equipment and budget cuts for the agency's reliance on online services such as "Get Transcript," which was at the heart of a recent breach that affected nearly 104,000 taxpayers.


Since 2010, the IRS budget has been cut by more than 1 billion to 10.9 billion.

Hackers were able to breach an IRS system using information obtained from non-IRS sources. Koskinen testified that the use of "Get Transcript," noting that it helped the agency to quickly serve more than 23 million taxpayers that it would have been nearly impossible to process efficiently while the agency's call centers and walk-in offices were jam-packed during the 2015 tax season.

In a push for more online services, Treasury Inspector General Russell George said that it would open the agency to more online attacks.

The recent breach resulted in about 13,000 fake tax returns that cost the government $39 million. "Tax refund fraud exploded between 2010 and 2012," Koskinen told the Finance Committee. And it's only gotten worse. Between 2011 and 2014, the IRS prevented $63 billion in fraudulent tax refund payouts but paid $5.2 billion to identity thieves in 2011 alone.

The agency is looking at implementing two factor authentications in the near future.

Source: SCMagazine