Posts Tagged: irs

Jun 16

IRS Re-Enables ‘Get Transcript’ Feature

The Internal Revenue Service has re-enabled a service on its Web site that allows taxpayers to get a copy of their previous year’s tax transcript. The renewed effort to beef up taxpayer authentication methods at comes more than a year after the agency disabled the transcript service because tax refund fraudsters were using it to steal sensitive data on consumers.

irsbldgDuring the height of tax-filing season in 2015, KrebsOnSecurity warned that identity thieves involved in tax refund fraud with the IRS were using’s “Get Transcript” feature to glean salary and personal information they didn’t already have on targeted taxpayers. In May 2015, the IRS suspended the Get Transcript feature, citing its abuse by fraudsters and noting that some 100,000 taxpayers may have been victimized as a result.

In August 2015, the agency revised those estimates up to 330,000, but in February 2016, the IRS again more than doubled its estimate, saying the actual number of victims was probably closer to 724,000.

So exactly how does the new-and-improved Get Transcript feature validate that taxpayers who are requesting information aren’t cybercriminal imposters? According to the IRS’s Get Transcript FAQ, the visitor needs to supply a Social Security number (SSN) and have the following:

  • immediate access to your email account to receive a confirmation code;
  • name, birthdate, mailing address, and filing status from your most recent tax return;
  • an account number from either a credit card, auto loan, mortgage, home equity loan or home equity line of credit;
  • a mobile phone number with your name on the account.

“If you previously registered to use IRS Get Transcript Online, Identity Protection PIN, Online Payment Agreement, or ePostcard online services, log in with the same username and password you chose before,” the IRS said. “You’ll need to provide a financial account number and mobile phone number if you haven’t already done so.”

The agency said it will then verify your financial account number and mobile phone number with big-three credit bureau Equifax. Readers who have taken my advice and placed a security freeze on their credit files will need to request a temporary thaw in that freeze with Equifax before attempting to verify their identity with the IRS. Continue reading →

May 16

Fraudsters Steal Tax, Salary Data From ADP

Identity thieves stole tax and salary data from payroll giant ADP by registering accounts in the names of employees at more than a dozen customer firms, KrebsOnSecurity has learned. ADP says the incidents occurred because the victim companies all mistakenly published sensitive ADP account information online that made those firms easy targets for tax fraudsters.

adpPatterson, N.J.-based ADP provides payroll, tax and benefits administration for more than 640,000 companies. Last week, U.S. Bancorp (U.S. Bank) — the nation’s fifth-largest commercial bank — warned some of its employees that their W-2 data had been stolen thanks to a weakness in ADP’s customer portal.

ID thieves are interested in W-2 data because it contains much of the information needed to fraudulently request a large tax refund from the U.S. Internal Revenue Service (IRS) in someone else’s name. A reader who works at U.S. Bank shared a letter received from Jennie Carlson, the financial institution’s executive vice president of human resources.

“Since April 19, 2016, we have been actively investigating a security incident with our W-2 provider, ADP,” Carlson wrote. “During the course of that investigation we have learned that an external W-2 portal, maintained by ADP, may have been utilized by unauthorized individuals to access your W-2, which they may have used to file a fraudulent income tax return under your name.”

The letter continued:

“The incident originated because ADP offered an external online portal that has been exploited. For individuals who had never used the external portal, a registration had never been established. Criminals were able to take advantage of that situation to use confidential personal information from other sources to establish a registration in your name at ADP. Once the fraudulent registration was established, they were able to view or download your W-2.”

U.S. Bank spokesman Dana Ripley said the letter was sent to a “small population” of the bank’s more than 64,000 employees. Asked to comment on the letter from U.S. Bank, ADP confirmed that the fraud visited upon U.S. Bank also hit “a very small subset” of the ADP’s total customers this year.

ADP emphasized that the fraudsters needed to have the victim’s personal data — including name, date of birth and Social Security number — to successfully create an account in someone’s name. ADP also stressed that this personal data did not come from its systems, and that thieves appeared to already possess that data when they created the unauthorized accounts at ADP’s portal.

ADP Chief Security Officer Roland Cloutier said customers can choose to create an account at the ADP portal for each employee, or they can defer that process to a later date (but employers do have to chose one or the other, Cloutier said).

According to ADP, new users need to be in possession of two other things (in addition to the victim’s personal data) at a minimum in order to create an account: A custom, company-specific link provided by ADP, and a static code assigned to the customer by ADP.

The problem, Cloutier said, seems to stem from ADP customers that both deferred that signup process for some or all of their employees and at the same time inadvertently published online the link and the company code. As a result, for users who never registered, criminals were able to register as them with fairly basic personal info, and access W-2 data on those individuals. Continue reading →

Mar 16

IRS Suspends Insecure ‘Get IP PIN’ Feature

Citing ongoing security concerns, the Internal Revenue Service (IRS) has suspended a service offered via its Web site that allowed taxpayers to retrieve so-called IP Protection PINs (IP PINs), codes that the IRS has mailed to some 2.7 million taxpayers to help prevent those individuals from becoming victims of tax refund fraud two years in a row. The move comes just days after KrebsOnSecurity first exposed how ID thieves were abusing the service to revisit tax refund on innocent taxpayers two years running.

irsbldgLast week, this blog told the story of Becky Wittrock, a certified public accountant (CPA) from Sioux Falls, S.D., who received an IP PIN in 2014 after crooks tried to impersonate her to the IRS. Wittrock said she found out her IP PIN had been compromised by thieves this year after she tried to file her tax return on Feb. 25, 2016. Turns out, the crooks beat her to the punch by more than three weeks, filing a large refund request with the IRS on Feb. 2, 2016.

The problem, as Wittrock’s case made clear, is that IRS allows IP PIN recipients to retrieve their PIN via the agency’s Web site, after supplying the answers to four easy-to-guess questions from consumer credit bureau Equifax. These so-called knowledge-based authentication (KBA) or “out-of-wallet” questions focus on things such as previous address, loan amounts and dates and can be successfully enumerated with random guessing. In many cases, the answers can be found by consulting free online services, such as Zillow and Facebook.

In a statement issued Monday evening, the IRS said that as part of its ongoing security review, the agency was temporarily suspending the Identity Protection PIN tool on

“The IRS is conducting a further review of the application that allows taxpayers to retrieve their IP PINs online and is looking at further strengthening the security features on the tool,” the agency said. Continue reading →

Mar 16

Thieves Nab IRS PINs to Hijack Tax Refunds

Last year, KrebsOnSecurity warned that the Internal Revenue Service‘s (IRS) solution for helping victims of tax refund fraud avoid being victimized two years in a row was vulnerable to compromise by identity thieves. According to a story shared by one reader, the crooks are well aware of this security weakness and are using it to revisit tax refund fraud on at least some victims two years running — despite the IRS’s added ID theft protections.

irsbldgTax refund fraud affects hundreds of thousands — if not millions — of U.S. citizens annually. It starts when crooks submit your personal data to the IRS and claim a refund in your name, but have the money sent to an account or address you don’t control.

Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually due a refund from the IRS.

The IRS’s preferred method of protecting tax refund victims from getting hit two years in a row — the Identity Protection (IP) PIN — has already been mailed to some 2.7 million tax ID theft victims. The six-digit PIN must be supplied on the following year’s tax application before the IRS will accept the return as valid.

As I’ve noted in several stories here, the trouble with this approach is that the IRS allows IP PIN recipients to retrieve their PIN via the agency’s Web site, after supplying the answers to four easy-to-guess questions from consumer credit bureau Equifax.  These so-called knowledge-based authentication (KBA) or “out-of-wallet” questions focus on things such as previous address, loan amounts and dates and can be successfully enumerated with random guessing.  In many cases, the answers can be found by consulting free online services, such as Zillow and Facebook.

Becky Wittrock, a certified public accountant (CPA) from Sioux Falls, S.D., said she received an IP PIN in 2014 after crooks tried to impersonate her to the IRS.

Wittrock said she found out her IP PIN had been compromised by thieves this year after she tried to file her tax return on Feb. 25, 2016. Turns out, the crooks beat her to the punch by more than three weeks, filing a large refund request with the IRS on Feb. 2, 2016. 

“So, last year I was devastated by this,” Wittrock said, “But this year I’m just pissed.”

Wittrock said she called the toll-free number for the IRS that was printed on the identity theft literature she received from the year before.

“I tried to e-file this weekend and the return was rejected,” Wittrock said. “I received the PIN since I had IRS fraud on my 2014 return. I called the IRS this morning and they stated that the fraudulent use of IP PINs is a big problem for them this year.”

Wittrock said that to verify herself to the IRS representative, she had to regurgitate a litany of static data points about herself, such as her name, address, Social Security number, birthday, how she filed the previous year (married/single/etc), whether she claimed any dependents and if so how many. 

“The guy said, ‘Yes, I do see a return was filed under your name on Feb. 2, and that there was the correct IP PIN supplied’,” Wittrock recalled. “I asked him how can that be, and he said, ‘You’re not the first, we’ve had many cases of that this year.'”

According to Wittrock, the IRS representative shared that the agency wouldn’t be relying on IP PINs for long.

“He said, ‘We won’t be using the six digit PIN next year. We’re working on coming up with another method of verification’,” she recalled. “He also had thrown in something about [requiring] a driver’s license, which didn’t sound like a good solution to me.” Continue reading →

Feb 16

IRS: 390K More Victims of IRS.Gov Weakness

The U.S. Internal Revenue Service (IRS) today sharply revised previous estimates on the number of citizens that had their tax data stolen since 2014 thanks to a security weakness in the IRS’s own Web site. According to the IRS, at least 724,000 citizens had their personal and tax data stolen after crooks figured out how to abuse a (now defunct) IRS Web site feature called “Get Transcript” to steal victim’s prior tax data.

The Growing Tax Fraud MenaceThe number is more than double the figures the IRS released in August 2015, when it said some 334,000 taxpayers had their data stolen via authentication weaknesses in the agency’s Get Transcript feature.

Turns out, those August 2015 estimates were more than tripled from May 2015, when the IRS shut down its Get Transcript feature and announced it thought crooks had abused the Get Transcript feature to pull previous year’s tax data on just 110,000 citizens.

In a statement released today, the IRS said a more comprehensive, nine-month review of the Get Transcript feature since its inception in January 2014 identified the “potential access of approximately 390,000 additional taxpayer accounts during the period from January 2014 through May 2015.”

The IRS said an additional 295,000 taxpayer transcripts were targeted but access was not successful, and that mailings notifying these taxpayers will start February 29. The agency said it also is offering free credit monitoring through Equifax for affected consumers, and placing extra scrutiny on tax returns from citizens with affected SSNs.

The criminal Get Transcript requests fuel refund fraud, which involves crooks claiming a large refund in the name of someone else and intercepting the payment. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually due a refund from the IRS.

As I warned in March 2015, the flawed Get Transcript function at issue required taxpayers who wished to obtain a copy of their most recent tax transcript had to provide the IRS’s site with the following information: The applicant’s name, date of birth, Social Security number and filing status. After that data was successfully supplied, the IRS used a service from credit bureau Equifax that asks four so-called “knowledge-based authentication” (KBA) questions. Anyone who succeeds in supplying the correct answers could see the applicant’s full tax transcript, including prior W2s, current W2s and more or less everything one would need to fraudulently file for a tax refund.

These KBA questions — which involve multiple choice, “out of wallet” questions such as previous address, loan amounts and dates — can be successfully enumerated with random guessing. But in practice it is far easier, as we can see from the fact that thieves were successfully able to navigate the multiple questions more than half of the times they tried. The IRS said it identified some 1.3 million attempts to abuse the Get Transcript service since its inception in January 2014; in 724,000 of those cases the thieves succeeded in answering the KBA questions correctly.

The IRS’s answer to tax refund victims — the Identity Protection (IP) PIN — is just as flawed as the now defunct Get Transcript system. These IP PINS, which the IRS has already mailed to some 2.7 million tax ID theft victims, must be supplied on the following year’s tax application before the IRS will accept the return.

The only problem with this approach is that the IRS allows IP PIN recipients to retrieve their PIN via the agency’s Web site, after supplying the answers to the same type of KBA questions from Equifax that opened the Get Transcript feature to exploitation by fraudsters.  These KBA questions focus on things such as previous address, loan amounts and dates and can be successfully enumerated with random guessing.  In many cases, the answers can be found by consulting free online services, such as Zillow and Facebook.

ID thieves understand this all to well, and even a relatively unsophisticated gang engaged in this activity can make millions via tax refund fraud. Last week, a federal grand jury in Oregon unsealed indictments against three men accused of using the IRS’s Get Transcript feature to obtain 1,200 taxpayers transcripts. In total, the authorities allege the men filed over 2,900 false federal tax returns seeking over $25 million in fraudulent refunds.  The IRS says it rejected most of those claims, but that the gang managed to successfully obtain $4.7 million in illegal refunds.

Continue reading →

May 15

IRS: Crooks Stole Data on 100K Taxpayers Via ‘Get Transcript’ Feature

In March 2015, KrebsOnSecurity broke the news that identity thieves engaged in filing fraudulent tax refund requests with the Internal Revenue Service (IRS) were using the IRS’s own Web site to obtain taxpayer data needed to complete the phony requests. Today, IRS Commissioner John Koskinen acknowledged that crooks used this feature to pull sensitive data on more than 100,000 taxpayers this year.

Screenshot 2015-03-29 14.22.55That March story — Sign Up at Before Crooks Do It For You — tracked the nightmarish story of Michael Kasper, one of millions of Americans victimized by tax refund fraud each year. When Kasper tried to get a transcript of the fraudulent return using the “Get Transcript” function on, he learned that someone had already registered through the IRS’s site using his Social Security number and an unknown email address.

Koskinen was quoted today in an Associated Press story saying the IRS was alerted to the thieves when technicians noticed an increase in the number of taxpayers seeking transcripts. The story noted that the IRS said they targeted the system from February to mid-May, and that the service has been temporarily shut down. Prior to that shutdown, the IRS estimates that thieves used the data to steal up to $50 million in fraudulent refunds.

“In all, about 200,000 attempts were made from questionable email domains, with more than 100,000 of those attempts successfully clearing authentication hurdles,” the IRS said in a statement. “During this filing season, taxpayers successfully and safely downloaded a total of approximately 23 million transcripts.” Continue reading →

Apr 15

A Day in the Life of a Stolen Healthcare Record

When your credit card gets stolen because a merchant you did business with got hacked, it’s often quite easy for investigators to figure out which company was victimized. The process of divining the provenance of stolen healthcare records, however, is far trickier because these records typically are processed or handled by a gauntlet of third party firms, most of which have no direct relationship with the patient or customer ultimately harmed by the breach.

I was reminded of this last month, after receiving a tip from a source at a cyber intelligence firm based in California who asked to remain anonymous. My source had discovered a seller on the darknet marketplace AlphaBay who was posting stolen healthcare data into a subsection of the market called “Random DB ripoffs,” (“DB,” of course, is short for “database”).

Eventually, this same fraudster leaked a large text file titled, “Tenet Health Hilton Medical Center,” which contained the name, address, Social Security number and other sensitive information on dozens of physicians across the country.

AlphaBayHealthContacted by KrebsOnSecurity, Tenet Health officials said the data was not stolen from its databases, but rather from a company called InCompass Healthcare. Turns out, InCompass disclosed a breach in August 2014, which reportedly occurred after a subcontractor of one of the company’s service providers failed to secure a computer server containing account information. The affected company was 24 ON Physicians, an affiliate of InCompass Healthcare.

“The breach affected approximately 10,000 patients treated at 29 facilities throughout the U.S. and approximately 40 employed physicians,” wrote Rebecca Kirkham, a spokeswoman for InCompass.

“As a result, a limited amount of personal information may have been exposed to the Internet between December 1, 2013 and April 17, 2014, Kirkham wrote in an emailed statement. Information that may have been exposed included patient names, invoice numbers, procedure codes, dates of service, charge amounts, balance due, policy numbers, and billing-related status comments. Patient social security number, home address, telephone number and date of birth were not in the files that were subject to possible exposure. Additionally, no patient medical records or bank account information were put at risk. The physician information that may have been exposed included physician name, facility, provider number and social security number.”

Kirkham said up until being contacted by this reporter, InCompass “had received no indication that personal information has been acquired or used maliciously.”

So who was the subcontractor that leaked the data? According to (and now confirmed by InCompass), the subcontractor responsible was PST Services, a McKesson subsidiary providing medical billing services, which left more than 10,000 patients’ information exposed via Google search for over four months.

As this incident shows, a breach at one service provider or healthcare billing company can have a broad impact across the healthcare system, but can be quite challenging to piece together. Continue reading →

Mar 15

Sign Up at Before Crooks Do It For You

If you’re an American and haven’t yet created an account at, you may want to take care of that before tax fraudsters create an account in your name and steal your personal and tax data in the process.

Screenshot 2015-03-29 14.22.55Recently, KrebsOnSecurity heard from Michael Kasper, a 35-year-old reader who tried to obtain a copy of his most recent tax transcript with the Internal Revenue Service (IRS). Kasper said he sought the transcript after trying to file his taxes through the desktop version of TurboTax, and being informed by TurboTax that the IRS had rejected the request because his return had already been filed.

Kasper said he phoned the IRS’s identity theft hotline (800-908-4490) and was told a direct deposit was being made that very same day for his tax refund — a request made with his Social Security number and address but to be deposited into a bank account that he didn’t recognize.

“Since I was alerting them that this transaction was fraudulent, their privacy rules prevented them from telling me any more information, such as the routing number and account number of that deposit,” Kasper said. “They basically admitted this was to protect the privacy of the criminal, not because they were going to investigate right away. In fact, they were very clear that the matter would not be investigated further until a fraud affidavit and accompanying documentation were processed by mail.”

In the following weeks, Kasper contacted the IRS, who told him they had no new information on his case. When he tried to get a transcript of the fraudulent return using the “Get Transcript” function on, he learned that someone had already registered through the IRS’s site using his Social Security number and an unknown email address.

“When I called the IRS to fix this, and spent another hour on hold, they explained they could not tell me what the email address was due to privacy regulations,” Kasper recalled. “They also said they could not change the email address, all they could do was ban access to eServices for my account, which they did. It was something at least.”

FORM 4506

Undeterred, Kasper researched further and discovered that he could still obtain a copy of the fraudulent return by filling out the IRS Form 4506 (PDF) and paying a $50 processing fee. Several days later, the IRS mailed Kasper a photocopy of the fraudulent return filed in his name — complete with the bank routing and account number that received the $8,936 phony refund filed in his name.

“That’s right, $50 just for the right to see my own return,” Kasper said. “And once again the right hand does not know what the left hand is doing, because it cost me just $50 to get them to ignore their own privacy rules. The most interesting thing about this strange rule is that the IRS also refuses to look at the account data itself until it is fully investigated. Banks are required by law to report suspicious refund deposits, but the IRS does not even bother to contact banks to let them know a refund deposit was reported fraudulent, at least in the case of individual taxpayers who call, confirm their identity and report it, just like I did.”

Kasper said the transcript indicates the fraudsters filed his refund request using the IRS web site’s own free e-file website for those with incomes over $60,000. It also showed the routing number for First National Bank of Pennsylvania and the checking account number of the individual who got the deposit plus the date that they filed: January 31, 2015.

The transcript suggests that the fraudsters who claimed his refund had done so by copying all of the data from his previous year’s W2, and by increasing the previous year’s amounts slightly. Kasper said he can’t prove it, but he believes the scammers obtained that W2 data directly from the IRS itself, after creating an account at the IRS portal in his name (but using a different email address) and requesting his transcript.

“The person who submitted it somehow accessed my tax return from the previous year 2013 in order to list my employer and salary from that year, 2013, then use it on the 2014 return, instead,” Kasper said. “In addition, they also submitted a corrected W-2 that increased the withholding amount by exactly $6,000 to increase their total refund due to $8,936.”


On Wednesday, March 18, 2015, Kasper contacted First National Bank of Pennsylvania whose routing number was listed in the phony tax refund request, and reached their head of account security. That person confirmed a direct deposit by the IRS for $8,936.00 was made on February 9, 2015 into an individual checking account specifying Kasper’s full name and SSN in the metadata with the deposit.

“She told me that she could also see transactions were made at one or more branches in the city of Williamsport, PA to disburse or withdraw those funds and that several purchases were made by debit card in the city of Williamsport as well, so that at this point a substantial portion of the funds were gone,” Kasper said. “She further told me that no one from the IRS had contacted her bank to raise any questions about this account, despite my fraud report filed February 9, 2015.”

The head of account security at the bank stated that she would be glad to cooperate with the Williamsport Police if they provided the required legal request to allow her to release the name, address, and account details. The bank officer offered Kasper her office phone number and cell phone to share with the cops. The First National employee also mentioned that the suspect lived in the city of Williamsport, PA, and that this individual seemed to still be using the account.

Kasper said the local police in his New York hometown hadn’t bothered to respond to his request for assistance, but that the lieutenant at the Williamsport police department who heard his story took pity on him and asked him to write an email about the incident to his captain, which Kasper said he sent later that morning.

Just two hours later, he received a call from an investigator who had been assigned to the case. The detective then interviewed the individual who held the account the same day and told Kasper that the bank’s fraud department was investigating and had asked the person to return the cash.

“My tax refund fraud case had gone from stuck in the mud to an open case, almost overnight,” Kasper sad. “Or at least it seemed to be that simple. It turned out to be much more complex.”

For starters, the woman who owned the bank account that received his phony refund — a student at a local Pennsylvania university — said she got the transfer after responding to a Craigslist ad for a moneymaking opportunity.

Kasper said the detective learned that money was deposited into her account, and that she sent the money out to locations in Nigeria via Western Union wire transfer, keeping some as a profit, and apparently never suspecting that she might be doing something illegal.

“She has so far provided a significant amount of information, and I’m inclined to believe her story,” Kasper said. “Who would be crazy enough to deposit a fraudulent tax refund in their own checking account, as opposed to an untraceable debit card they could get at a convenience store. At the same time, wouldn’t somebody who could pull this off also have an explanation like this ready?”

The woman in question, whose name is being withheld from this story, declined multiple requests to speak with KrebsOnSecurity, threatening to file harassment claims if I didn’t stop trying to contact her. Nevertheless, she appears to have been an unwitting — if not unwilling — money mule in a scam that seeks to recruit the unwary for moneymaking schemes. Continue reading →

Mar 15

Tax Fraud Advice, Straight from the Scammers

Some of the most frank and useful information about how to fight fraud comes directly from the mouths of the crooks themselves. Online cybercrime forums play a critical role here, allowing thieves to compare notes about how to evade new security roadblocks and steer clear of fraud tripwires. And few topics so reliably generate discussion on crime forums around this time of year as tax return fraud, as we’ll see in the conversations highlighted in this post.

File 'em Before the Bad Guys Can

File ’em Before the Bad Guys Can

As several stories these past few months have noted, those involved in tax refund fraud shifted more of their activities away from the Internal Revenue Service and toward state tax filings. This shift is broadly reflected in discussions on several fraud forums from 2014, in which members lament the apparent introduction of new fraud “filters” by the IRS that reportedly made perpetrating this crime at the federal level more challenging for some scammers.

One outspoken and unrepentant tax fraudster — a ne’er-do-well using the screen name “Peleus” — reported that he had far more luck filing phony returns at the state level last year. Peleus posted the following experience to a popular fraud forum in February 2014:

“Just wanted to share a bit of my results to see if everyone is doing so bad or it just me…Federal this year has been a pain in the ass. I have about 35 applications made for federal with only 2 paid refunds…I started early in January (15-20) on TT [TurboTax] and HR [H&R Block] and made about 35 applications on Federal and State..My stats are as follows:

Federal: 35 applications (less than 10% approval rate) – average per return $2500

State: 35 apps – 15 approved (average per return $1600). State works just as great as last year, their approval rate is nearly 50% and processing time no more than 10 – 12 days.

I know that the IRS has new check filters this year but federals suck big time this year, i only got 2 refunds approved from 35 applications …all my federals are between $2300 – $2600 which is the average refund amount in the US so i wouldn’t raise any flags…I also put a small yearly salary like 25-30k….All this precautions and my results still suck big time compared to last year when i had like 30%- 35% approval rate …what the fuck changed this year? Do they check the EIN from last year’s return so you need his real employer information?”

A seasoned tax return fraudster discusses strategy.

A seasoned tax return fraudster discusses strategy.

Several seasoned members of this fraud forum responded that the IRS had indeed become more strict in validating whether the W2 information supplied by the filer had the proper Employer Identification Number (EIN), a unique tax ID number assigned to each company. The fraudsters then proceeded to discuss various ways to mine social networking sites like LinkedIn for victims’ employer information.


A sidebar is probably in order here. EINs are not exactly state secrets. Public companies publish their EINs on the first page of their annual 10-K filings with the Securities and Exchange Commission. Still, EINs for millions of small companies here in the United States are not so easy to find, and many small business owners probably treat this information as confidential.

Nevertheless, a number of organizations specialize in selling access to EINs. One of the biggest is Dun & Bradstreet, which, as I detailed in a 2013 exposé, Data Broker Giants Hacked by ID Theft Service, was compromised for six months by a service selling Social Security numbers and other data to identity thieves like Peleus.

Last year, I heard from a source close to the investigation into the Dun & Bradstreet breach who said the thieves responsible made off with more than six million EINs. In December 2014, I asked Dun &Bradstreet about the veracity of this claim, and received a blanket statement that did not address the six million figure, but stressed that EINs are not personally identifiable information and are available to the public. Continue reading →

Apr 14

States: Spike in Tax Fraud Against Doctors

An unusual number of physicians in several U.S. states are just finding out that they’ve been victimized by tax return fraud this year, KrebsOnSecurity has learned. An apparent spike in tax fraud cases against medical professionals is fueling speculation that the crimes may have been prompted by a data breach at some type of national organization that certifies or provides credentials for physicians.

taxfraudScott Colby, executive vice president of the New Hampshire Medical Society, said he started hearing from physicians in his state about a week ago, when doctors who were just filing their tax returns began receiving notices from the Internal Revenue Service that someone had already filed their taxes and claimed a large refund.

So far, Colby has heard from 111 doctors, physician assistants and nurse practitioners in New Hampshire who have been victims of tax fraud this year.

“I’ve been here four years and this is the first time this issue has come across my desk,” Colby said.

In this increasingly common crime, thieves steal or purchase Social Security numbers and other data on consumers, and then electronically file fraudulent tax returns claiming a large refund. The thieves instruct the IRS to send the refund to a bank account that is tied to a prepaid debit card, which the fraudster can then use to withdraw cash at an ATM (for more on how this works, see last week’s story, Crimeware Helps File Fraudulent Tax Returns).

Unlike the scam I wrote about last week — which involved the theft of credentials to third-party payroll and HR providers that are then used to pull W2 records and file bogus tax returns on all company employees — the tax fraud being perpetrated against the physicians Colby is tracking is more selective.

“We’ve done a broadcast to all of the hospital systems in the state, and I have yet to receive one [victim] name from a non-clinician,” Colby said. “And you would think if it was an HR or payroll issue that at least a couple of administrative, non-clinical folks would have been in the mix, but that is not the case.”


Colby said he’s heard similar reports from other states, including Arizona, Connecticut, Indiana, Maine, Michigan, North Carolina and Vermont.

Elaine Ellis Stone, director of communications at the North Carolina Medical Society, said her organization has been contacted by more than 100 individual doctors and medical practice managers complaining about tax fraud committed in the names of their doctors and other medical staff. Continue reading →