IRS suspends Equifax contract

Equifax Headquarters

Equifax Headquarters

The IRS has suspended its $7.25 million contract with Equifax Inc. involving taxpayer identity verification services, a company spokesperson confirmed with Law360 on Friday, a move that follows lawmakers' questioning about why the credit-reporting agency got a contract after it suffered a massive security breach. Equifax had a previous contract with the IRS that expired on September 30th, in the midst of the data breach fallout.

In a statement to FCW, the IRS said the suspension was temporary and precautionary and that no IRS data was affected.

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 U.S. taxpayers".

"The IRS plans to continue reviewing the security of Equifax's systems during the suspension", they continued, adding, "The agency had previously said its hands were tied and it had to keep the contract with Equifax". Hackers stole Social Security numbers, birth dates and addresses, and in some cases driver's license numbers. He later went before Congress for a public shaming in which he apologized. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee.

While the contract is suspended, taxpayers will not be able to create new accounts in the tax agency's Secure Access program, which enables taxpayers to securely access certain IRS services online.

Equifax protested losing the contract to the US Government Accountability Office on July 7, according to documents.

This time Equifax discovered a issue with a third party vendor it uses to collect website performance data.

The Government Accountability Office later disputed the assertion that IRS had no choice, saying contracting law allowed for the agency to start working with Experian by citing urgent and compelling circumstances that would significantly affect the interests of the US government. We are engaging IRS officials to review the facts and clarify available options.