IRS plagued by computer vulnerabilities five consecutive years

During the past year, the Internal Revenue Service did not install critical fixes for software vulnerabilities, allowed unauthorized access to accounting programs and failed to ensure contractors received security training, according to the auditors' auditors.

Around tax time in 2007, 2008, 2009, 2010, 2011 and now this year, the Government Accountability Office has identified similar, recurring weaknesses that could expose sensitive taxpayer information and agency financial data, according to archived GAO reports.

"IRS had never installed numerous patch releases for the Unix operating system" that had been in operation since March 2009, stated the most recent report, released Friday. By not patching security holes on a timely basis, the "IRS increases the risk that known vulnerabilities in its systems may be exploited."

The key reason IRS computers are susceptible to tampering is the tax agency has yet to institute a mandatory information security program, GAO officials have said for five years. Under federal cybersecurity law, agencies must deploy a departmentwide initiative that, among other things, trains personnel to comply with security policies and tests technical protections.

In 2012, auditors observed that IRS personnel determined whether safeguards were functioning by looking at documents, rather than physically running the programs, according to the GAO. "In one case, testers concluded that encryption was in place by reviewing a diagram and interviewing key staff rather than performing system testing," the report stated.

The IRS largely relies on computers to collect more than $2 trillion in federal tax payments, as well as distribute about $400 billion in refunds.

Two years ago, auditors discovered contractors had not received training in security awareness within the first two weeks on the job. The IRS has yet to address that lapse, agency officials told GAO in this year's report.

Many of the security gaps highlighted over the years are carbon copies of each other. The 2012 GAO report reads: "Until IRS takes further steps to correct these weaknesses, financial and taxpayer data are at increased risk of unauthorized disclosure, modification, or destruction." The 2007 report similarly stated: "These weaknesses could impair IRS' ability to perform vital functions and increase the risk of unauthorized disclosure, modification or destruction of financial and sensitive taxpayer information."

Employees whose duties did not include purchasing or book-keeping were allowed to open IRS computer applications that handle financial transactions, according to this year's audit. In August 2011, "the agency identified 16 users who had been granted access to the procurement system without receiving approval," the report said, adding, "the data in a shared work area used to support accounting operations were fully accessible by network administration staff although they did not need such access."

Passwords for some IRS computer programs were weak enough to expose intelligence that hackers could use to crack open other agency accounts, the auditors found. This was because computer settings did not require complex passwords or limit password reuse appropriately. "As a result of these weaknesses, increased risk exists that an individual with malicious intentions could gain inappropriate access to sensitive IRS applications and data on these systems, and potentially use the access to attempt compromises of other IRS systems," the report stated.

The GAO evaluation was conducted between April 2011 and March 2012.

Among the troubles remaining unresolved since the 2011 report is a server that transfers tax and financial data between internal systems and "allowed unencrypted transmission of sensitive data." Other outstanding issues include network devices stored in unlocked cabinets and digital credentials that let inappropriate personnel enter computer rooms.

The IRS, however, did make an effort to improve security, the auditors stressed. Notable among these strides, according to GAO, was the formation of working groups that are responsible for detecting and resolving specific high-risk issues.

In a March 7 letter responding to a draft report, IRS Commissioner Douglas Shulman wrote, "The security and privacy of all taxpayer and financial information is of utmost importance to us and the integrity of our financial systems continues to be sound."

Shulman disagreed with the finding that his agency has not followed through on a mandatory security program, stating the IRS "has fully implemented a comprehensive information security program, within the spirit and intent of the National Institute of Standards and Technology guidelines."

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