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IRS believes massive data theft originated in Russia

Massive IRS data breach traced to Russia
Massive IRS data breach traced to Russia

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    Massive IRS data breach traced to Russia

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Massive IRS data breach traced to Russia 01:59

Washington (CNN)The Internal Revenue Service believes that a major cyber breach that allowed criminals to steal the tax returns of more than 100,000 people originated in Russia, Rep. Peter Roskam confirmed to CNN on Thursday.

The Illinois Republican, who is chairman of a House subcommittee with IRS oversight, said IRS Commissioner John Koskinen told him about the theft's Russian provenance in a phone call.
CNN first reported the breach's Russian origin on Wednesday.
    "It's a problem, no matter where it's coming from, for the taxpayers and the IRS. It surely doesn't help matters though that it's coming from Russia for all the obvious geopolitical reasons," Roskam said.
    The IRS announced Tuesday that organized crime syndicates used personal data obtained elsewhere to access tax information, which they then used to file $50 million in fraudulent tax refunds.
    Roskam said the breach is concerning because the IRS system wasn't hacked. Using personal data, he said, the thieves "went in the front door of the IRS and unlocked it with the key."
    Roskam and Republican House Ways and Means Committee Chairman Paul Ryan sent a letter to Koskinen on Thursday asking him to explain how the breach occurred.
    The IRS said the agency's Criminal Investigation Unit and the Treasury Inspector General for Tax Administration are investigating the origins of the breach. The agency also alerted the Homeland Security Department of the breach, a DHS official confirmed. On Thursday, the FBI announced it had also opened an investigation into the incident.
    An IRS spokeswoman said the agency does not discuss ongoing investigations.
    The news that the IRS data breach is believed to have originated in Russia comes on the heels of the disclosure that Russian hackers had infiltrated both the White House and State Department computer systems.
    The security of taxpayer data has been an IRS problem for years. In an October report, the IRS' independent watchdog called it the agency's number one problem.
    "Computer security has been problematic for the IRS since 1997," according to the report.
    And the new breach has lawmakers on Capitol Hill demanding answers.
    Calling it the first step of many, Republican Senate Finance Committee Chairman Orrin Hatch announced Wednesday that he plans to haul Koskinen before his committee next week to explain what happened and who is to blame.
    "When the federal government fails to protect private and confidential taxpayer information, Congress must act," Hatch said.
    Between February and May, criminals tried to access the tax accounts of 200,000 people, succeeding in about half the attempts, the IRS said. The agency said it plans to notify all 200,000 people to tell them that third parties appear to have access to their Social Security numbers and other personal information.
    The roughly 100,000 taxpayers whose tax information was accessed will be offered free credit monitoring, the agency said.