Stealing From the IRS

Another case of the government aiding and abetting identity theft

IRS STANDS for Internal Revenue Service, but after a frightening report from the IRS inspector general on the inability of the tax collection agency to protect taxpayer data, IRS might stand for Information Relinquishing Service. According to the report released last week, almost 500 laptop computers were lost or stolen from the homes, cars or offices of agency workers between January 2003 and June 2006. That's something sure to bring a smile to the faces of white-collar criminals who dabble in identity theft.

This wouldn't be the first time they're smiling courtesy of the federal government. A year ago, the Commerce Department reported more than 1,000 laptops missing, some with sensitive information. And the Department of Veteran Affairs had a laptop with information on 26.5 million people pinched last May. It was returned a month later with everything intact. Now it's the IRS's turn to mess up.

The agency has 52,511 laptops, with the typical computer holding 10 to 25 tax cases. Given the sensitivity of the information at its disposal, you'd think the IRS would be on the ball about protecting it. And you'd be wrong. Twice -- in 2003 and early 2006 -- the agency was warned by the inspector general about its lax ways. Information was not encrypted. Password protections were not up to par. Many workers didn't report their computers lost or stolen, as required. The report even highlighted one worker who taped a paper with all the needed user names and passwords to the laptop. The IRS finally started addressing these problems in the last half of last year.

An agency spokeswoman wanted taxpayers to know that the IRS really does take these security breaches very seriously. For instance, she told us, nearly every laptop now is encrypted, meaning no one can get at the vital information stored on the hard drive. In addition, every employee with an IRS laptop has been issued a cable lock that secures the computer in its docking station. And workers who travel are now told to take the locks with them and to chain the laptop to a piece of furniture in their hotel rooms. May we suggest the mini-bar?