IRS Falls Short on Eliminating SSNs from Taxpayer Correspondence
The Internal Revenue Service has made only limited progress to date in eliminating the unnecessary use of Social Security Numbers in tax forms, letters and notices, according to a new report, leaving taxpayers exposed to potential identity theft.
The report, from the Treasury Inspector General for Tax Administration, found that in fiscal year 2014, the IRS mailed more than 141 million notices and 37 million letters to taxpayers for various reasons, to help them understand and meet their tax obligations. In a prior review, TIGTA reported that the IRS had not made significant progress in redacting or masking taxpayers’ SSNs from systems, notices, and forms. TIGTA initiated a new audit to re-assess the IRS’s progress, and publicly released the results Wednesday.
TIGTA found that as of January 2015, the IRS estimates that it has removed SSNs from 58 (2 percent) of the 2,749 types of letters and 93 (48 percent) of the 195 types of notices it issues.
An Office of Management and Budget mandate required the IRS to eliminate the unnecessary use of SSNs by March 2009. However, the IRS suspended work on the forms, letters and systems components of its SSN Elimination and Reduction Program in September 2011, so it could focus on other components of the program with its limited funding. Funding needed to upgrade computer systems to process barcoded notices will not be available in fiscal year 2016 because the IRS has deemed other projects to be more critical, TIGTA noted.
TIGTA also found that processes are needed to identify the universe of taxpayer correspondence with unnecessary SSNs and to ensure that SSNs are excluded when creating new correspondence. For example, TIGTA’s review of a sample of 65 forms created since calendar year 2009 found that 14 of them (that is, 22 percent) require taxpayers to provide their SSNs.
“A person’s Social Security Number is the most valuable piece of personal data identity thieves can obtain,” said TIGTA Inspector General J. Russell George in a statement. “The fact that the IRS does not have processes and procedures to accurately identify all correspondence that contain Social Security Numbers remains a concern.” Read more on Accounting Today.