Security of E-File and/or web based products

[JustARegularGuy]

I was wondering if anyone could comment on the security of web based tax prep sites and specifically about E-File. Although many sites tell me that my data is "secure", I assume that the same was true about the major data breaches that have been publicized widely.

Because I am leary of this, I plan to do my taxes on my home computer (rather than over the web). However, I remain concerned that when I e-file my taxes that:

1. The company involved will retain this data and potentially expose it to a security breach.

or

2. The company will use/sell this data to solicit/market me stuff.

The latter should be disclosed in their privacy statement, but since most of these companies are part of large corporations , I understand that they can share data "internally" without any specific release.

Am I worried about nothing? Should I paper file instead?

Thx. Sorry if this is a silly question. A search of the forum for "security" and/or "e-file" didn't yield much

[Bees Knees]

This is a forum for tax professionals who charge money to prepare tax returns for clients.

Hire a tax professional. Sorry for being rude, but that is the only advice you will get here.

[dsi]

One should always be concerned about security when using the internet. Also, I agree with the above post.

[taxmandan]

You're worried about nothing

Am I worried about nothing? Should I paper file instead?

Thx. Sorry if this is a silly question. A search of the forum for "security" and/or "e-file" didn't yield much

The Treasury Inspector General for Tax Administration reports (12/14/07):

The Internal Revenue Service (IRS) stores its taxpayer, financial, and other data in more than 2,100 databases. However, it continues to have recurring information security weaknesses that make its databases susceptible to penetration attacks. Due to the sensitivity of these data, the IRS could be a target for malicious users intent on committing identity theft and fraud. Theft of the data on these systems could also result in financial losses to the Federal Government.

High-risk weaknesses continue to exist, and sufficient efforts have not been taken to correct them. TIGTA scanned IRS networks and determined that 11 percent of the approximately 1,900 databases scanned had 1 or more installation accounts with a default or blank password. A total of 369 installation accounts had default or blank passwords; 26 contained powerful database administrator privileges.

While the IRS Computer Security Incident Response Center identifies password weaknesses on the systems it scans, it does not adequately scan all IRS databases. In addition, TIGTA found deficiencies in the process for reviewing Computer Security Incident Response Center scans that hamper the effectiveness and reporting accuracy of the review team’s efforts.

Databases found with default or blank passwords during our scans include those that contain personally identifiable tax information. Malicious users can exploit accounts with default or blank passwords to steal taxpayer identities and carry out fraud schemes.

A majority of the IRS databases scanned do not have the latest software updates (patches) installed; 65 percent of the databases scanned needed to be updated, with more than 300 databases being outdated from 11 months to 20 months. As a result, outdated IRS databases were collectively susceptible to nearly 40,000 database vulnerabilities, one-half of which are considered high risk. These vulnerabilities include those used for common penetration attacks.

[www.treas.gov]