The IRS says it exposed some confidential taxpayer data on its website
These data come from990-T Form, which typically requires people with IRAs to earn some type of business income in those retirement plans. This typically includes people whose IRAs invest in primary limited partnerships, real estate, or other income-generating assets, as opposed to those whose IRAs invest only in securities.
The information disclosed includes names, contact information, and financial information about income within these IRSs. The Treasury Department determined that it did not include Social Security numbers, full personal income information or other data that could affect taxpayer credit, according to a letter the administration sent to key members of Congress on Friday.
Like most individual tax returns filed with the IRS, these forms should be kept confidential. However, charities with so-called unrelated business income are also required to file Form 990-T, and these documents should be open to the public.
The IRS and the Treasury Department have blamed human coding errors when electronic filings of Form 990-T began last year. Non-public data was erroneously included in public data, all of which can be searched and downloaded on the agency’s website. The Wall Street Journal, which routinely analyzes tax filings by nonprofits, downloaded at least some of the data before it was deleted.
An IRS researcher discovered the bug in recent weeks, sparking a wider investigation and leading to the deletion of the data. The IRS notified Congress on Friday as required by federal law for major information security incidents. Affected taxpayers will be notified in the coming weeks.
“The IRS is continuing to review the situation,” Anna Canfield Roth, the acting assistant secretary for administration at the U.S. Treasury Department, told lawmakers in Friday’s letter. “The Treasury Department has directed the IRS to promptly review its practices to ensure the necessary safeguards are in place to prevent unauthorized disclosure of data.”
The IRS has long struggled with aging information technology systems and the occasional breach of taxpayer private information.
Last year, the news organization ProPublica released tax data on many of the wealthiest and highest-earning Americans, sparking an investigation. So far, it is not known where this data came from.