This past Tuesday, the Internal Revenue Service reported that it had experienced a malicious cyberattack. Using stolen social security numbers obtained from a source outside of the agency hackers attempted to retrieve PINs that can be used to file tax returns electronically.
The IRS statement assured taxpayers that no taxpayer data was compromised or disclosed by the IRS system and that it was taking steps to notify affected taxpayers by mail that their information was used to try to force access to the IRS application.
The attack occurred in January and targeted the IRS Web application that generates Electronic Filing (E-file) PINs. When a user needs to obtain their PIN, they head to the website with their name, Social Security Number, date of birth and address to get their PIN.
The hackers used 464,000 unique SSNs through malware to obtain their corresponding E-file PINs. The IRS provided 101,000 PINs before blocking the attack.
Officials say they are flagging affected accounts to bar any further fraud attempts. The IRS is also working with cybersecurity experts to assess the situation and added that the incident was not connected to last week's outage of IRS processing systems.
While it's good news that the agency was able to halt most of the attack, the whole episode underscores the immense threat of identity theft to all consumers. The hackers involved in this attack already had access to over 400,000 SSNs which could be used to open new credit accounts, obtain medical benefits or worse. And the number of high profile breaches that have exposed thousands of records from companies like Anthem, Premera, Experian and JP Morgan Chase to name a few, make it clear that none of our information is safe; it may already be in the hands of a fraudster waiting for the right time to use it.
Investing in an identity theft protection service has never been more critical. As we move toward more and more digitized records it's almost inevitable that our information will end up in the wrong hands—so our first line of defense against identity theft has to be detection. When we can detect or become aware that our information is being used maliciously we can act to stop it and minimize the negative effects on our financial and personal lives.
An identity theft protection service aids you in this by monitoring your credit, Social Security Number and public records and alerting you to certain activity that could indicate fraud. Some services also include software tools like keystroke encryption or anti-virus, and education on digital privacy to lower your risk of fraud.
We can't stop what is coming, but we can prepare for it. Learn more here.