IRS Asked to Rescind $7.25 Million Contract to Equifax

NYC IRS Office by Matthew G. Bisanz, via Wikimedia Commons
NYC IRS Office by Matthew G. Bisanz, via Wikimedia Commons

You would think the Equifax fiasco would end with the company’s CEO stepping down, however, things have become more interesting. The Internal Revenue Services awarded Equifax with a $7.25 million contract in a bid to help the company verify taxpayer identities and prevent cases of fraud and scams expected to rise out of the no-bid contract issued. The Equifax breach is no small deal. Personal data of 145.5 million Americans were compromised and the company failed to provide a foolproof solution. In a chaotic series of blunder over blunder, mishaps over mishaps, Equifax is still not able to manage the wide-scale damage.

Despite these failures, the IRS proceeded with awarding the company more money to, ‘assist in ongoing identity verification and validations.’ According to the contract, this is a ‘sole source order,’ which means only Equifax is deemed suitable for providing the service even though it has clearly proved it is not capable of securing the information of its users. IRS camouflaged this award under the pretext that the order was issued to prevent a lapse in identity checks while officials resolve a dispute over a separate contract.

Needless to say, IRS’s decision to support Equifax with more money was lambasted by lawmakers and senators. Senate Finance Chairman Orrin Hatch strongly condemned the act by the IRS, stating, ‘In the wake of one of the most massive data breaches in a decade, it’s irresponsible for the IRS to turn over millions of taxpayer dollars to a company that has yet to offer a succinct answer on how at least 145 million Americans had personally identifiable information exposed.’ Other senators such as Sen. Ron Wyden joined into the criticism, saying, ‘”The Finance Committee will be looking into why Equifax was the only company to apply for and be rewarded with this. I will continue to take every measure possible to prevent taxpayer data from being compromised as this arrangement moves forward.”

At the time of writing this article, seven members of the Senate Banking Committee are asking the IRS to rescind the contract as this was a disregard for the plight of millions of Americans who have had to go through a difficult time dealing with stolen data. The people will be at risk for all kinds of scams, identity thefts and other personal problems which Equifax has clearly not expressed any interest in fixing.

Matters became even more conflicting when IRS defended its decision stating that Equifax convinced them the breach did not affect any of IRS’s data. Equifax also tried convincing IRS mentioning its previous contract with the company. In support of Equifax, IRS clearly states, ‘Following an internal review and an on-site visit with Equifax, the IRS believes the service Equifax provided does not pose a risk to IRS data or systems. At this time, we have seen no indications of tax fraud related to the Equifax breach, but we will continue to closely monitor the situation.’

It is important to note that the IRS has had its fair share of data breaches caused by outdated technologies and an irresponsible attitude towards data security. Equifax moves in the same line which probably explains why the two understand each other so well!

Farah tries to keep up with the fast-paced tech world by writing about it. She covers latest tech news and writes informative pieces to help her readers make informed decisions about their tech preferences.