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IRS suspends Equifax contract extension after second security issue

13 October 2017

The IRS has temporarily suspended a contract it awarded to Equifax, following reports that the company suffered a second data breach, Politico reports.

"The IRS notified us that they have issued a stop-work order under our Transaction Support for Identity Management contract", an Equifax spokesperson said on Friday.

But the GAO told Politico on October 5 that the IRS did not have to award the contract to Equifax, explaining that federal agencies possess "the tools to move forward under appropriate situations".

IRS said it will be unable to create new Secure Access accounts until the issue is resolved and a new contractor comes onboard, but current users will not be affected. "There is still no indication of any compromise of the limited IRS data shared under the contract".

Last week, members of the Senate Banking Committee urged IRS Commissioner John Koskinen to kill the contract in a letter stating that "we have no assurances that our constituents' personal information is safe in their hands"-a reference the company's vast array of screw ups that led to one of the worst data breaches in history, compromising the personal information of about 145.5 million people, or about half of USA taxpayers. I'm pleased that the IRS has temporarily suspended the contract but the 145 million Americans who had their data stolen still need fast and clear answers from Equifax and the IRS", Sasse said in a statement Friday".

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Sen. Sherrod Brown, D-Ohio, said: "Suspending the IRS contract is only the first step".

"We remain confident that we are the best party to perform the services required in this contract", the spokesperson said. "We can not know taxpayers are protected until Equifax is banned from all federal contracts". We are engaging IRS officials to review the facts and clarify available options.

IRS officials argued prior their hand was forced on the awarding of the sole-source contract because Equifax, the incumbent contractor on a previous deal, had protested the July decision to give it to another vendor.

Late on October 12, the IRS said that it was temporarily suspending the contract, a move applauded by lawmakers. Secure Access allows taxpayers to retrieve various online tax records and provides other "tax account tools" to those who have signed up.

In 2016, government services made up 5 percent of Equifax's overall $3.1 billion in revenue, accounting for 10 percent of its workforce solutions revenues, 3 percent of its USA information solutions revenues, and 7 percent of its worldwide revenues, according to a regulatory financial filing.

IRS suspends Equifax contract extension after second security issue