Category Archives: IRS White House Collusion

Fleecing Taxpayers, $137 Billion

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GAO Report: Federal Government Paid $136.7 Billion in Improper Payments

IndependentJournal: The United States federal government spent $136.7 billion in improper payments last year, according to a new report from the Government Accountability Office.

In the report released Wednesday, the GAO outlines how 121 different government programs doled out a record amount of improper payments, according to 22 different agencies.

The report further notes that only three programs accounted for three-fourths of the improper payments:

“While these 121 programs span various agencies across the federal government, improper payment estimates for Medicare, Medicaid, and the Earned Income Tax Credit accounted for more than 76 percent of the governmentwide estimate…”

According to the GAO, $32.3 billion, or 23.6 percent, of the improper payments were from other government programs.

Source: GAO

Source: GAO

This is just the latest report of improper payments, which remains an increasing problem. Since 2003, the GAO has reported the cumulative increases, which have risen more than $100 billion in the past 13 years.

The GAO wants to curb the massive streak of improper payments. Their report included specific suggestions:

“[The GAO has] identified various strategies and recommendations that could help to reduce improper payments in these key programs, including requiring states to conduct audits of payments to and by Medicaid managed care organizations.”

The report also claims that efforts are under way to address the various problems, but there is still a long way to go.

“Until the federal government has implemented effective processes to determine the full extent to which improper payments occur and has taken appropriate actions across entities and programs to effectively reduce improper payments, it will not have reasonable assurance that the use of federal funds is adequately safeguarded,” the report noted.

A report was produced in 2014 where millions were paid to federal employees to stay home and not work.

Examiner: The federal government has shelled out more than $700 million in paid leave to more than 57,000 employees who were home from work for time periods stretching from one month to three years, a Government Accountability Office report has found.

In a 62-page report published Monday, the GAO analyzed why so many federal employees were home and getting paid for such long periods of time and they discovered a variety of reasons.

In many cases, employees were home awaiting the outcome of investigations into alleged misconduct and criminal actions. Some racked up paid leave for “physical fitness activities,” and others were away from work seeking professional development. Employees also took paid leave for “recuperation” from overseas work.

Hundreds of federal employees remained at home, collecting a paycheck, for years.

If you are so inclined to go deeper, how about this well researched summary noting the collusion and blurred lines of federal employees working on official time versus union time. Thanks to Capital Research for this one.

Summary: Few Americans are aware that, through their tax dollars, they finance labor unions through a practice known as “official time” or “release time.” The cost to taxpayers is skyrocketing, while—thanks to Obama administration stonewalling—accountability is declining. Fortunately, reformers are working to rein in this costly, corrupt practice.

The WH, the Wilful Failures on FOIA Requests

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WashingtonExaminer 2014: It’s Sunshine Week, so perhaps some enterprising White House reporter will ask press secretary Jay Carney why President Obama rewrote the Freedom of Information Act without telling the rest of America.

The rewrite came in an April 15, 2009, memo from then-White House Counsel Greg Craig instructing the executive branch to let White House officials review any documents sought by FOIA requestors that involved “White House equities.”

That phrase is nowhere to be found in the FOIA, yet the Obama White House effectively amended the law to create a new exception to justify keeping public documents locked away from the public.

The Greg memo is described in detail in a new study made public today by Cause of Action, a Washington-based nonprofit watchdog group that monitors government transparency and accountability.

How serious an attack on the public’s right to know is the Obama administration’s invention of the “White House equities” exception?

“FOIA is designed to inform the public on government behavior; White House equities allow the government to withhold information from the media, and therefore the public, by having media requests forwarded for review. This not only politicizes federal agencies, it impairs fundamental First Amendment liberties,” Cause of Action explains in its report.

Equities are everything

The equities exception is breathtaking in its breadth. As the Greg memo put it, any document request is covered, including “congressional committee requests, GAO requests, judicial subpoenas and FOIA requests.”

US gov’t sets record for failures to find files when asked

WASHINGTON (AP) – When it comes to providing government records the public is asking to see, the Obama administration is having a hard time finding them.

In the final figures released during President Barack Obama’s presidency, the U.S. government set a record last year for the number of times federal employees told disappointed citizens, journalists and others that despite searching they couldn’t find a single page of files requested under the Freedom of Information Act. In more than one in six cases, or 129,825 times, government searchers said they came up empty-handed, according to a new Associated Press analysis.

The FBI couldn’t find any records in 39 percent of cases, or 5,168 times. The Environmental Protection Agency regional office that oversees New York and New Jersey couldn’t find anything 58 percent of the time. U.S. Customs and Border Protection couldn’t find anything in 34 percent of cases.

“It’s incredibly unfortunate when someone waits months, or perhaps years, to get a response to their request – only to be told that the agency can’t find anything,” said Adam Marshall, an attorney with the Washington-based Reporters Committee for Freedom of the Press.

A Justice Department spokeswoman, Beverly Lumpkin, said the administration answered more records requests and reduced its backlog of leftover requests, which should be considered good work on the part of the government in fulfilling information requests.

The AP’s annual review covered all requests to 100 federal agencies during fiscal 2015. The administration released its figures days ahead of Sunshine Week, when news organizations promote open government and freedom of information.

It was impossible to know whether more requests last year involved non-existent files or whether federal workers were searching less than diligently before giving up to consider a case closed. The administration said it completed a record 769,903 requests, a 19 percent increase over the previous year despite hiring only 283 new full-time workers on the issue, or about 7 percent. The number of times the government said it couldn’t find records increased 35 percent over the same period.

“It seems like they’re doing the minimal amount of work they need to do,” said Jason Leopold, an investigative reporter at Vice News and a leading expert on the records law. “I just don’t believe them. I really question the integrity of their search.”

In some high-profile instances, usually after news organizations filed expensive federal lawsuits, the Obama administration found tens of thousands of pages after it previously said it couldn’t find any. The website Gawker sued the State Department last year after it said it couldn’t find any emails that Philippe Reines, an aide to Hillary Clinton and former deputy assistant secretary of state, had sent to journalists. After the lawsuit, the agency said it found 90,000 documents about correspondence between Reines and reporters. In one email, Reines wrote to a reporter, “I want to avoid FOIA,” although Reines’ lawyer later said he was joking.

When the government says it can’t find records, it rarely provides detailed descriptions about how it searched for them. Under the law, federal employees are required to make a reasonable search, and a 1991 U.S. circuit court ruling found that a worker’s explanation about how he conducted a search is “accorded a presumption of good faith, which cannot be rebutted by purely speculative claims” that a better search might have turned up files.

For a deeper and accurate summary, go here.

The Plan: Five for Freedom

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Bringing government spending under control.

NRO: At the last Republican presidential debate, I presented the Simple Flat Tax — which, for a family of four, exempts the first $36,000 from all income tax, and above that amount collects one low rate of 10 percent for all Americans. It eliminates the death tax, the payroll tax, the corporate income tax, and the Obamacare taxes; ends the corporate carve-outs and loopholes; and requires every business to pay the same simple business flat tax of 16 percent.

That plan will unleash unprecedented growth, create millions of new jobs, raise after-tax incomes for all income levels by double-digit percentages — and abolish the IRS as we know it. But eliminating the IRS is only the first step in my plan to break apart the federal leviathan that has ruled Washington and crept into our lives. We can’t stop there. In addition to eliminating the IRS, a Cruz administration will abolish four cabinet agencies. And we will sharply reduce the alphabet soup of government entities, beginning with the ABCs that should not exist in the first place: The Agencies, Bureaus, Commissions, and other programs that are constitutionally illegitimate and harmful to American households and businesses. It’s time to return to a federal government that abides by our constitutional framework and strips power from unelected bureaucrats.

The need is urgent.

The total federal debt currently stands at $18.6 trillion, larger than our entire economy. That is up 75 percent since the current president took office, and by the end of his tenure, he is expected to have added almost as much to the national debt as all past presidents combined. And what does the Obama administration have to show for its uncontrolled spending? A stagnant economy, lagging job creation, and the lowest labor-force participation since the Carter administration. The Obama economy has burdened each American household with the equivalent of $57,000 of federal debt. Under such stifling circumstances, it’s no wonder that 84 percent of college graduates do not have a job lined up after graduation, and 13.2 percent of young adults are out of work. The current level of spending is not only irresponsible, but immoral and unjust to future generations.

It is time for bold change. Change that stops Washington from squandering Americans’ money; that creates jobs and restores growth with a single, fair, low rate for everyone; that reins in Washington’s costly regulations; that honors the people’s work with the dignity it deserves; and that finally gets the government out of our pockets and off our backs. Of course, because entitlements constitute roughly two-thirds of federal spending, no government spending plan is complete without addressing entitlement reform. And in the coming months, I will be laying out a detailed plan to do just that, to strengthen and preserve Social Security and Medicare and to ensure their fiscal strength for decades to come. But we should start with federal discretionary spending.
First, to begin the process of reducing the scope and cost of government, I have identified the Five for Freedom: During my first year as president, I will fight to abolish the IRS, the Department of Education, the Department of Energy, the Department of Commerce, and the Department of Housing and Urban Development. To do that, I will press Congress relentlessly. And I will appoint heads of each of those agencies whose central charge will be to lead the effort to wind them down and determine whether any of their programs need to be preserved elsewhere because they fall within the proper purview of the federal government. I do not anticipate the lists to be long. The IRS and these cabinet agencies are unnecessary and will be shuttered for the following reasons:
Internal Revenue Service – to dramatically simplify the tax code and enable everyone to fill out their taxes on a postcard or smartphone app. Department of Education – to return education to those who know our students best: parents, teachers, local communities, and states. And to block-grant education funding to the states.
Department of Energy – to cut off the Washington cartel, stop picking winners and losers, and unleash the energy renaissance.
Department of Commerce – to close the “congressional cookie jar” and promote free enterprise and free trade for every business.
Department of Housing and Urban Development – to offer real solutions that lift people out of hardship, rather than trapping families in a cycle of poverty, and to empower hurting Americans by reforming most of the remaining programs, such as Section 8 housing. Second, besides these unnecessary cabinet agencies and the IRS, we will sharply reduce the agencies, bureaus, commissions, and other programs that are harming American households and businesses — including the Consumer Financial Protection Bureau.
Together with the four departments and the IRS, our conservative estimate of the effects of these eliminations and reductions is a savings of over $500 billion over ten years. And that’s just a start. The true savings — of scaling down the scope of the federal government, of restoring to the states their rightful authority, and of unleashing the people’s ingenuity — cannot be measured by a number. We are uprooting the centralized power that we have lived under for far too long. Third, we will bring back a proven approach from the prosperous days of the Reagan administration: a private-sector panel to assess federal spending levels and evaluate areas of waste and fraud for removal. At President Reagan’s behest, the Grace Commission recommended 2,478 “cost-cutting, revenue-enhancing” suggestions, without raising taxes, weakening defense, or harming social welfare. It was a major success among other policies that created a great economic boom, and it deserves a reprise. Fourth, we will hold Congress accountable; it too often delegates its authority to unelected bureaucrats. We will enact a strong Balanced Budget Amendment. And, by enacting the REINS Act, we will require that a majority of members approve any major, cost-inducing regulations. Fifth, we will put in place a hiring freeze of federal civilian employees across the executive branch. For those agencies in which it is determined that a vacant position needs to be filled, I will authorize the hiring of a maximum ratio of one person for every three who leave. And rather than automatically increasing federal workers’ pay annually, workers will have more opportunities for merit-based pay increases.
The full details of this plan can be found at www.tedcruz.org. It’s past time to dramatically reduce the size of government and restore congressional accountability to the people. Doing so, along with instituting fundamental tax reform and regulatory reform, will reignite the promise that has made this the freest and most prosperous nation in the world.

 

Nightmare for Taxpayers According to an IRS Bulletin

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IRS is warning taxpayers of a new surge in tax-related incidents

It is a nightmare for taxpayers according to an IRS bulletin there is a 400 percent surge in tax-related phishing and malware incidents.

This year the IRS already reported 1,026 malware and phishing incidents, compared to 254 this time last year.

SecurityAffairs: The IRS is warning taxpayers of newer forms of attacks aiming victims into disclosing credentials to third-party tax preparation service accounts.

“The Internal Revenue Service renewed a consumer alert for e-mail schemes after seeing an approximate 400 percent surge in phishing and malware incidents so far this tax season.” states the bulletin. “The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. E-mails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.”

The IRS Commissioner John Koskinen used the adjective “dramatic” to describe this surge in tax-related incidents inviting taxpayers to watch out for scammers.

“This dramatic jump in these scams comes at the busiest time of tax season,” said Koskinen. “Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails.”

Threat actors are very interested in using the tax season as a lure, in a common attack scenario victims receive an email containing links to the domain used to serve malware. In other cases, the attackers used emails with attachments that include documents embedding malicious macros. Once the victims open the document, the macro drops a malware on the victim’s machine, including dreaded ransomware like CryptoLocker, TeslaCrypt and Locky.

These are the alarming statistics provided by the IRS:

  • There were 1,026 incidents reported in January, up from 254 from a year earlier.
  • The trend continued in February, nearly doubling the reported number of incidents compared to a year ago. In all, 363 incidents were reported from Feb. 1-16, compared to the 201 incidents reported for the entire month of February 2015.
  • This year’s 1,389 incidents have already topped the 2014 yearly total of 1,361, and they are halfway to matching the 2015 total of 2,748.

Recently IRS services were abused by crooks to target taxpayers, in May 2015 the Internal Revenue Service was breached by hackers that “used an online service provided by the agency” to access data for more than 100,000 taxpayers. The IRS issued an official statement on the incident and specified that the compromised system was “Get Transcript.” The Transcript service could be used by taxpayers to get a transcript online or by mail to view their tax account transactions.

In August 2015, the Internal Revenue Service disclosed a new review of its system, revealing that 334,000 taxpayers (more than three times it initially estimated) may be affected by the hack it announced in May.

A couple of weeks ago the IRS detected roughly unauthorized attempts using 464,000 unique SSNs, and 101,000 attempts allowed crooks in generating PINs.

The U.S. Internal Revenue Service confirmed that cyber criminals abused the Electronic Filing PIN application running on irs.gov that allows taxpayers to generate a PIN that they can use to file tax returns online.

Pierluigi Paganini

 

It was not a Hardware Issue, it was a Cyber Intrusion, IRS

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IRS Confirms It Was a Victim of an Automated Attack

The attack, which occurred in January, targeted the electronic filing PIN application form on the IRS.gov Website. Experts said there are lessons to be learned.

eWeek: The U.S. Internal Revenue Service (IRS) is gearing up for another busy tax season, and it appears that hackers are getting ready, too. On Feb. 9, the IRS confirmed that it was the victim of an automated attack in January that targeted the electronic filing PIN application form on the IRS.gov Website.According to the IRS, attackers made use of personal information, including Social Security numbers, that was stolen from other non-IRS Websites. The attackers then used that information in an attempt to generate fraudulent E-File PIN numbers on IRS.gov. With a PIN number, an attacker could have potentially been able to file a tax return or gain access to other taxpayer information.The IRS investigation has found that 464,000 unique Social Security numbers (SSNs) were used in the attack, with 101,000 being successfully able to access the E-File PIN. The IRS is emphasizing that it has halted the attack and is contacting those who are affected.”No personal taxpayer data was compromised or disclosed by IRS systems,” the agency stated. “The IRS also is taking immediate steps to notify affected taxpayers by mail that their personal information was used in an attempt to access the IRS application.”

In May 2015, the IRS reported that its Get Transcript service was attacked. Get Transcript enables users to get information about their tax account transactions. As is the case with the new attack against the E-File PIN, the Get Transcript service attack involved user information that was stolen from third-party sites. The success rate for the Get Transcript attackers, however, was higher than it was for the E-File PIN attackers, where 100,000 out of 200,000 hack attempts were successful.

Security experts contacted by eWEEK are not surprised that the IRS is once again reporting an attack against its systems. The fact that the IRS.gov site was attacked with SSNs stolen from other third-party sites is, however, somewhat ironic.”One of the most successful ways hackers steal citizens’ Social Security numbers is through fraudulent phishing emails or phone calls that appear to be from the IRS,” Darren Guccione, CEO and co-founder of Keeper Security, told eWEEK.

Hackers know the public is terrified of being identity-theft victims and exploit this fear well, often by telling someone they’ve been a victim already and asking for their Social Security number, Guccione noted.Lance James, chief scientist at Flashpoint, commented that one of the big concerns he sees with the latest IRS attack is the continued reliance on Social Security numbers. “We need to rethink what a Social Security number means these days when it comes to accessing data,” James told eWEEK. “It should not be the administrator password for a person’s life.”Andy Hayter, security evangelist at G DATA Software, also commented on the risks associated with SSN disclosure. Every bit of an individual’s personally identifiable information that is collected via a breach is one more piece of information that can, and someday will, be used against a person, he said.
“As long as information such as Social Security numbers is used as identification, we will have bad actors trying to collect as much information about individuals to do harm, either through theft or worse,” Hayter told eWEEK.Inga Goddijn, executive vice president at Risk Based Security, noted that taxpayers should be concerned that questionable security practices at organizations completely unrelated to the IRS have the potential of affecting their tax returns.

Though the IRS has stated that no personal taxpayer data was compromised or disclosed in the new attack, JP Bourget, CEO of Syncurity, noted that there is still a real risk.”While maybe the IRS can in the end prevent any bad outcomes for taxpayers, I can imagine a few scenarios where a bad guy attempts to file a tax return for a refund that then holds up a valid refund to someone who is owed a refund, and even depending on that refund,” Bourget told eWEEK. “There’s also the angle of now your account is flagged and the uncertainty of how that affects a taxpayer over time and what hidden costs may arise from that.”One potentially positive outcome that could result from the IRS attack is that lessons learned could help prevent the next attack. Goddijn said that it would be helpful if the IRS can share more detail as to how the agency detected the attack and ideas for preventing these types of enumeration attacks in the future. She added that the U.S. government has been pushing for more threat intelligence sharing and improved security practices for all organizations.”Why not take this opportunity to lead the charge and share more about the attack with the security community,” Goddijn said. “That may help stop the next, similar assault on a high-value target.”

In 2015:

USAToday: Criminals hacked into an Internal Revenue Service website and gained access to approximately 100,000 tax accounts, the agency said Tuesday. Another 100,000 attempts were made but were not successful.

The attack appears to have first begun in February, the agency said.

The hackers got in by taking information about taxpayers they’d acquired from other sources and using it to correctly answer several personal identity verification questions in the IRS’ “Get Transcript” application, the IRS said in a statement.

This allowed them to get information about tax accounts through the application. The information stolen included Social Security information, date of birth and street address.

The Get Transcript application allows users to view their tax account transactions, line-by-line tax return information or wage and income reported to the IRS for a specific tax year. It was used to securely retrieve approximately 23 million taxpayer transcripts last year, the IRS said.

The information the hackers used to get in was probably previously stolen by other hackers who then sold it on the open market, said Rob Roy, chief technology officer of HP Enterprise Security Products.

The hackers who bought it “appear to have hired an army of people to submit over 200,000 queries into the IRS site over a period of four months. Not exactly a quick and easy operation,” he said.

“The matter is under review by the Treasury Inspector General for Tax Administration as well as the IRS’ Criminal Investigation unit, and the ‘Get Transcript’ application has been shut down temporarily,” the IRS said.

The agency will provide free credit monitoring services for the approximately 100,000 taxpayers whose accounts were accessed.

The theft was discovered late last week when IRS staff noticed unusual activity on the application. Further investigation showed that attempts were made beginning in February.

The breach does not involve the main IRS computer system that handles tax filing submissions. “That system remains secure,” the IRS said.

“The IRS historically has been very security, it has to be by virtue of the data it collects. But it just goes to show that even the most secure system can be attacked,” said Larry Ponemon of the Ponemon Institute, a data security research group.