The Internal Revenue Service warned last week that as many as 100,000 taxpayers’ information may have been stolen from a breach of an Internet based tool designed to automatically populate tax return data on the Free Application for Federal Student Aid, otherwise known as FAFSA.
During his Senate Finance Committee testimony last week, IRS Commissioner John Koskinen said the IRS had pinpointed suspicious activity for two people that used the IRS Data Retrieval Tool while filling out FAFSA. The tool’s link was taken down in March after the IRS discovered hackers had attempted to use personal information to file for fake tax refunds. The IRS commissioner said during testimony that around 8,000 fake refunds were issued for a total of $30 million, reported the Washington Post. The IRS stopped an additional 14,000 fake refunds from being sent out.
When the IRS originally took down the tool in March the government agency said it was a precautionary move over worries that hackers could steal sensitive personal information. The IRS and Department of Education did not give a time frame for when the tool would be back online, but it did mention the possibility of a several week delay. The problem with the IRS Data Retrieval Tool for FAFSA comes at a time when the deadline to complete the application is looming in multiple states; in fact, it already passed in some states, potentially hurting countless students.
During his testimony last week Koskinen said the tool will be down until October so that stronger security protections can be put in place. The IRS is currently in the process of alerting the 100,000 taxpayers about the potential breach. Koskinen did note that some of the FAFSA applications that were identified to have suspicious activity are real FAFSA applications.
Student loan borrowers are still able to fill out the FAFSA online but they have to manually enter tax data. That is worrying lawmakers and student loan advocates who fear lots of students will be shut out of the federal financial aid pool because of the extra step necessary to fill out what can often be a long, confusing and convoluted application. Not to mention if they input the wrong data it will take even longer to get federal student aid. Late last month a bevy of lawmakers called on the Department of Education to take a number of steps to deal with the situation by providing “prominent” notice, guidance, and alternatives on its websites and social media platforms.
They also want the Department of Education to consider accepting signed copies of tax returns from those who were already affected by the absence of the tool and to staff the Department’s customer service centers with enough representatives to handle the deluge of calls because the tool has been taken offline.
Author: Andrew Rombach
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