Incident: IRS Data Breach: Russian Hackers Steal Taxpayer Information.

Published Date: 2015-05-29

Postmortem Analysis
Timeline 1. The software failure incident, a hack on the IRS database, happened in mid-May 2015 as mentioned in Article 36274.
System 1. IRS "Get Transcript" tool - The IRS "Get Transcript" tool failed as hackers used it to access taxpayer information and file fraudulent returns [36274].
Responsible Organization 1. Hackers in Russia [36274]
Impacted Organization 1. Taxpayers - Over 100,000 taxpayers were impacted by the software failure incident involving the IRS hack [36274].
Software Causes 1. Hackers exploited vulnerabilities in the IRS "Get Transcript" tool to access taxpayer information and file fraudulent returns [36274].
Non-software Causes 1. The hack on the IRS database was caused by hackers in Russia infiltrating the system and stealing critical information of over 100,000 taxpayers [36274].
Impacts 1. Over $50 million in tax refunds was handed to the hackers before the attack was discovered, impacting the financial losses incurred by the IRS and taxpayers [36274]. 2. More than 100,000 taxpayers had their critical information stolen, leading to identity theft on a grand scale [36274]. 3. The affected taxpayers had their most intimate information, including names, Social Security numbers, and other details, land in the hands of hackers [36274]. 4. The fraudulent returns filed by the hackers will not affect taxpayer liability, but the incident has caused significant distress and potential financial implications for the affected individuals [36274].
Preventions 1. Implementing stronger authentication measures for accessing sensitive taxpayer information could have prevented the software failure incident. This could include multi-factor authentication or more robust verification processes to ensure that only authorized individuals can access the data [36274]. 2. Regularly updating and patching software vulnerabilities could have helped prevent the hackers from exploiting weaknesses in the system to gain unauthorized access to taxpayer information [36274]. 3. Conducting thorough security audits and assessments to identify and address potential vulnerabilities in the system before they can be exploited by malicious actors [36274].
Fixes 1. Implementing stronger authentication measures for accessing sensitive taxpayer information to prevent unauthorized access [36274]. 2. Conducting thorough security audits and assessments of all systems and tools used by the IRS to identify and address vulnerabilities [36274]. 3. Enhancing cybersecurity training and awareness programs for IRS employees to recognize and respond to potential security threats effectively [36274]. 4. Collaborating with cybersecurity experts and agencies to continuously monitor and defend against potential cyber threats [36274].
References 1. Rep. Peter Roskam (R - IL) [36274] 2. CNN [36274] 3. Associated Press [36274]

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization, multiple_organization (a) The software failure incident has happened again at one_organization: The IRS experienced a software failure incident involving a hack where hackers in Russia stole critical information of more than 100,000 taxpayers from the IRS database. This incident is not the first time the IRS has faced such a security breach. Previously, the IRS had announced that hackers acquired critical taxpayer information through its "Get Transcript" tool, leading to fraudulent tax returns being filed. This incident highlights a recurring vulnerability in the IRS's software systems [36274]. (b) The software failure incident has happened again at multiple_organization: The article mentions that the Russian hackers responsible for the IRS hack are known for maliciously infiltrating a number of US agencies. In addition to the IRS, the US government revealed that the Russian government had hacked into the White House's computer systems and the US Department of State as well. These incidents indicate a pattern of Russian hackers targeting multiple US organizations, suggesting a broader issue of cybersecurity vulnerabilities across different entities [36274].
Phase (Design/Operation) design, operation (a) The software failure incident related to the design phase can be seen in the IRS hack incident reported in Article 36274. The hackers exploited vulnerabilities in the IRS system, specifically targeting the "Get Transcript" tool to access taxpayer information for fraudulent returns. This indicates a failure in the design of the system, allowing hackers to use legitimate tools to carry out malicious activities [36274]. (b) The software failure incident related to the operation phase is evident in the IRS hack as well. The hackers successfully cleared authentication hurdles and obtained taxpayer information by answering verification questions that are typically only known by the taxpayer. This suggests a failure in the operation or use of the system, as the authentication process was compromised, allowing unauthorized access to sensitive data [36274].
Boundary (Internal/External) within_system (a) The software failure incident related to the IRS hack falls under the within_system boundary. The hackers used the legitimate "Get Transcript" tool within the IRS system to access taxpayer information and file fraudulent returns. The IRS mentioned that the attempts were quite complex in nature and appeared to have started in February and ran through mid-May, indicating that the failure originated from within the system itself [36274].
Nature (Human/Non-human) non-human_actions (a) The software failure incident in Article 36274 was due to non-human actions, specifically a hack carried out by hackers in Russia. The hackers exploited the IRS's "Get Transcript" tool to access taxpayer information, including names, Social Security numbers, and other details, to file fraudulent tax returns. This incident resulted in over $50 million in tax refunds being handed to the hackers before the attack was discovered [36274]. The hackers used information obtained from previous hacks to conduct targeted attacks, indicating that the failure was caused by factors introduced without human participation.
Dimension (Hardware/Software) software (a) The software failure incident reported in the article is primarily due to a hack orchestrated by hackers in Russia. The hackers exploited vulnerabilities in the IRS database and used information obtained from previous hacks to access taxpayer information and file fraudulent returns. This incident is more related to a security breach rather than a hardware failure [36274]. (b) The software failure incident is directly related to software vulnerabilities in the IRS "Get Transcript" tool, which was exploited by the hackers to access taxpayer information. The hackers used the legitimate tool to obtain sensitive data and file fraudulent tax returns. This failure originated in the software system's design and security flaws, allowing unauthorized access to critical information [36274].
Objective (Malicious/Non-malicious) malicious (a) The software failure incident described in the article is malicious in nature. Hackers in Russia targeted the IRS database and acquired critical taxpayer information from over 100,000 people through the "Get Transcript" tool. They used information obtained from previous hacks to file fraudulent tax returns and received over $50 million in tax refunds before the attack was discovered [36274]. The attack was part of a larger trend of Russian hackers infiltrating US agencies, including the White House and the US Department of State, with the intention of stealing sensitive information [36274]. The incident involved targeted attacks with the intent to generate a quick sum of cash through fraudulent returns, indicating a malicious objective [36274].
Intent (Poor/Accidental Decisions) poor_decisions, accidental_decisions (a) The software failure incident related to the IRS hack can be attributed to poor decisions made by the hackers in Russia. The hackers used information obtained from previous hacks to access the IRS database and steal critical taxpayer information. They exploited the "Get Transcript" tool by using names, Social Security numbers, and intimate details of individuals to file fraudulent tax returns, resulting in over $50 million in tax refunds being handed to the hackers [36274]. (b) Additionally, the incident can also be linked to accidental decisions as the hackers conducted targeted attacks with information they already had from a previous hack on a third-party service. The hackers were able to successfully clear authentication hurdles and obtain transcripts by answering verification questions typically known only by the taxpayer, indicating a level of accidental access due to the compromised information [36274].
Capability (Incompetence/Accidental) unknown (a) The software failure incident related to development incompetence is not explicitly mentioned in the provided article. (b) The software failure incident in the article is attributed to a hack orchestrated by hackers in Russia who exploited vulnerabilities in the IRS system to steal critical taxpayer information. This incident was not accidental but a deliberate and malicious act by the hackers [36274].
Duration temporary The software failure incident reported in the articles is temporary. The incident involved hackers using the legitimate "Get Transcript" tool to access taxpayer information and file fraudulent returns. The hackers conducted targeted attacks with information obtained from a previous hack on a third-party service. The IRS mentioned that the attempts to obtain transcripts were complex in nature and started in February, running through mid-May [36274].
Behaviour crash, omission, value, other (a) crash: The software failure incident in Article 36274 can be categorized as a crash. The IRS database was hacked, leading to the theft of critical information of over 100,000 taxpayers. This incident resulted in the system losing its state and not performing its intended functions, as hackers were able to access taxpayer information and file fraudulent returns before the attack was discovered [36274]. (b) omission: The software failure incident can also be categorized as an omission. The hackers used information obtained from previous hacks to access the IRS "Get Transcript" tool and obtain transcripts of past tax returns. This resulted in the system omitting to perform its intended functions by allowing unauthorized access to taxpayer information [36274]. (c) timing: The timing of the software failure incident is not the primary issue in this case. The focus is more on the unauthorized access and theft of taxpayer information rather than the system performing its intended functions too late or too early [36274]. (d) value: The software failure incident can be categorized as a failure due to the system performing its intended functions incorrectly. The hackers used the stolen information to file fraudulent tax returns, resulting in over $50 million in tax refunds being handed to the hackers before the attack was discovered [36274]. (e) byzantine: The software failure incident does not exhibit characteristics of a byzantine failure. The incident primarily involves unauthorized access, theft of information, and fraudulent activities rather than inconsistent responses or interactions within the system [36274]. (f) other: The software failure incident can be further described as a security breach leading to unauthorized access and misuse of taxpayer information. The incident highlights a significant flaw in the system's security measures, allowing hackers to exploit vulnerabilities and carry out fraudulent activities [36274].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence property (d) Property: People's material goods, money, or data was impacted due to the software failure. The software failure incident involving the hack on the IRS resulted in hackers acquiring critical taxpayer information from over 100,000 individuals, including names, Social Security numbers, and intimate details. This stolen information was then used to file fraudulent tax returns, leading to over $50 million in tax refunds being handed to the hackers before the attack was discovered [36274].
Domain finance, government (a) The failed system in this incident was related to the finance industry, specifically the Internal Revenue Service (IRS) database, which handles taxpayer information and tax returns [36274].

Sources

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