The tip of the IRS data breach – and it IS an iceberg

The IRS has been warned for decades about their security best practices. And now, at least 100,000 Americans have had their records compromised. How? The IRS uses a service called “Get Transcript”. It provides tax return details for users that provide information regarding their identity. This information, when properly used, retrieves historical information for everything from college and mortgage loans, to comprehensive background checks. However, when hackers get access to this service, they can steal very important personal information that can be used maliciously. Now, what’s the real problem? This hack is just the tip of the iceberg of what can be done by hackers when these digital services are used without proper security controls. Consider the data that has been stolen in recent breaches from healthcare to retail. Hackers know personal information such as name, address, and very possibly social security number and other personal information. What can they do with it? Let’s start with “Get Transcript”. Just filing out the form manually (or using a hacker’s automated tool) would retrieve sensitive information. It could be tax returns, salary, dependents, social security numbers, employer, etc. Then the vicious cycle starts with the abuse of this information… filing early tax returns for yourself and dependents for a fraudulent refund, opening credit cards, and other malicious gains due to flaws in the system. So, why is this just the tip of the iceberg? The hacker only needed to know a little about an individual to begin the crime spree and wreak financial havoc. This is not far-fetched – and it IS happening right now. Now, let’s talk about the bulk of the iceberg – the part that we don’t see because it’s underwater. You know… the part sunk the Titantic. The part that hopefully won’t sink us. How many other sites use basic information to retrieve even more sensitive information that could completely destroy your identity? Just think. When was the last time you renewed your driver’s license online or registered your car's title online? As one example, I can change my address, request a new copy of my driver’s license, request an electronic copy of my title to be transferred to paper – with very little info. See? You can completely own a person’s identity just by knowing a few basic pieces of information about them. The Department of Motor Vehicle (DMV) sites do not have usernames and passwords. You login, renew, and change information based on your “likeness”. Attributes assigned solely to you like birth date and social security number. And just like that, a hacker can own your identity. They do not have to go directly to opening credit cards. They can cause trouble on a number of public websites, without exploiting a single vulnerability, to steal your identity, finances, and potentially even your property. “Get Transcript” is the first place this has appeared in mass and it will happen elsewhere. There are so many sites that have the same identity and authentication problems – with no real solution for protection. While I believe we are just seeing the beginning of identity and authentication problems, I can only recommend vigilance among everyone. Change your passwords frequently, use different usernames when possible that are not based on your name, use separate email addresses for sensitive sites (verses everyday shopping), and most importantly monitor your credit statements and changes to your identity with a service. It’s all about visibility into your digital life and making sure that your likeness in the digital world is not being abused. At the same time, all corporations, including the government, should be held to security compliance standards which will help eliminate the chances of a data breach. There is no solution that can prevent all types of threats, but implementing best practices with Privileged Account Management and Vulnerability Management solutions are a have-to-have. As for what’s next with IRS security, only time will tell.