Addressing an issue that also applies to other agencies, an IG report has said that the IRS continues to over-use Social Security numbers in its correspondence with members of the public, putting them at higher risk of identity theft.
The Treasury Inspector General for Tax Administration was following up on an earlier report recommending that the IRS do more to redact or mask those numbers from systems, notices and forms. An OMB directive had ordered the IRS to eliminate the unnecessary use of the numbers by now, but the IRS assigned the program low priority due to funding restrictions, the report said; in particular, funding needed to upgrade computer systems is not planned to be available until this year.
In the new review specifically of correspondence—the IRS mailed more than 141 million notices and 37 million letters to taxpayers in 2014 for various reasons—auditors found that the agency had removed those numbers from just 2 percent of the more than 2,700 types of letters it issues, although from nearly half of the nearly 200 types of notices it issues.
More concerning, the report said, is that the IRS does not have a way to even identify all correspondence that contains those numbers, nor to ensure that the numbers are excluded when creating new correspondence.
The IRS agreed with several recommendations but said it has higher priority for the funds that would be needed to compile a list of all correspondence issued to taxpayers. The IG responded that without such information the IRS cannot measure its progress toward reducing unneeded use of the numbers.