The Internal Revenue Service (IRS) data leak has unintentionally exposed troves of confidential information for nearly 120,000 taxpayers who filed a form 990-T for their tax returns. The agency utilises the exposed form to report unrelated business income paid to an exempted tax entity.
This tax-exempted entity includes IRA, SEP retirement accounts, and charities from nonprofit organisations. This income is usually from sales that do not relate to a real estate investment or nonprofit’s core purpose of providing income into an individual retirement account.
The 990-T forms are in secrecy and should only be seen by the Internal Revenue Service for regular taxpayers. Unfortunately, the form must be available for public inspection for about three years for nonprofit organisations.
The leak also included charities in the Internal Revenue Service data leak.
Last week, the Internal Revenue Service revealed that Form 990-T for charities was also added to the exposed data. Subsequently, they accidentally included the data for taxpayers’ IRAs that was not intended to be accessed by the public.
According to an IRS spokesperson, their agency recently discovered that some machine-readable form 990-T data was made available for the bulk download section on the Tax-Exempt Organisation Search (TEOS), which the agency should have provided to the public.
Furthermore, taxpayers who could utilise machine-readable data commonly use the TEOS section. Fortunately, the data leak is not affected by other more usually used areas of the Tax-Exempt Organisation.
A public journal then wrote about the data leak, which revealed the information of more than 100 thousand taxpayers was compromised by the incident. The leak exposed different data types, such as names, contact information, and reported income for those IRAs.
However, the IRS insisted that the data leak did not include individual tax returns, detailed account-holder information, and social security numbers. Additionally, an IRS staff discovered the data leak, which prompted a report to Congress last week.
The IRS claims they have removed the exposed data and will disseminate advisories to the impacted taxpayers in the coming days.
