Recently, the IRS databank of over 100,000 taxpayers’ information was compromised because hackers hacked the “Get Transcript” application of the IRS website. Just how easy is it to get 100,000 taxpayers’ details? There is one potential loophole through which such a massive amount of personal tax information may be obtained. And that is through the 4506-T form. This form is required to be filled up whenever you apply for a mortgage. Essentially the 4506-T form authorizes a third-party vendor who has signed up with the IRS to access taxpayer transcripts under the Income Verification Express Service. These third-party vendors may be large corporations like credit agencies and data and technology companies or they may be smaller enterprises. Their role is to assist the lender in the mortgage process. Click here to read or watch more IRS Help resources.
To qualify to access the transcript database, these third party companies have to submit information about their business and check a box to indicate they have read and agree to comply with the IRS’ procedure to “safeguard taxpayer data”. By doing so, these companies are given the right to access all your tax information like name and Social Security number. But how ethical are these companies or the people who work in them? What if an identity thief works in one of these companies?
The way I see it, the IRS should impose tougher security measures to ensure no breach of taxpayer data happens.
Read more about how the IRS should get tough on tax transcripts.