The IRS announced late Thursday night that it has temporarily suspended a $7.25 million contract with Equifax to help verify taxpayers' identities when creating accounts on the agency's website, citing "new information available today".
I know I gave a rather impassioned defense of the IRS decision to continue using Equifax to confirm the identities of taxpayers access records and other information their website.
Equifax has been under intense scrutiny since disclosing last month it suffered a massive hack that may have exposed personal information for roughly half the USA population. "The contract suspension is being taken as a precautionary step as the IRS continues its review".
The IRS is the first organization to say publicly that it is suspending a contract with Equifax since the credit reporting agency's security problems came to light.
Equifax revealed last month that it had endured a massive cybersecurity breach in July, potentially exposing the personal information of nearly half of all Americans, including names, dates of birth and Social Security numbers.
Atlanta-based Equifax said its systems were not compromised by the incident on Thursday, which involved bogus pop-up windows on the web page that could trick visitors into installing software that automatically displays advertising material. Sign ups for Secure Access accounts have been suspended as a result, but anybody who already has one will not be affected.
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As is standard operating procedure, the IRS extended Equifax's contract until the protest is resolved because the agency was still in need of those services.
Still, the IRS said it chose to temporarily suspended its short-term contract with Equifax for identity-proofing services. The development means that at least for now, taxpayers can not open new Secure Access accounts with the IRS.
The IRS said it is investigating the security of Equifax's systems during this suspension, which could be lifted if Equifax gets a clean bill of health. Equifax had a previous contract with the IRS that expired on September 30th, in the midst of the data breach fallout.
Government contracts in areas such as healthcare, law enforcement, social services, and tax and revenue, are major sources of revenue for Equifax.
Equifax protested losing the contract to the US Government Accountability Office on July 7, according to documents.