Safety and Security

IRS Suspends Equifax Contract

Equifax, the embattled credit scoring company, was dealt another blow last week when the Internal Revenue Service suspended a contract that is worth more than $7 million that it had recently awarded the company.

According to a news report in Reuters, the move was prompted by Equifax, which suffered a massive data breach that impacted as many as 145.5 million consumers – including credit card information on 209,000 customers – had to shut down a link that had been infected with malicious code.

“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 (Oct. 13). “We remain confident that we are the best party to perform the services required in this contract. We are engaging IRS officials to review the facts and clarify available options.”

According to Reuters, the IRS is the first group to come out with a public move to suspend a contract in the wake of the data breach. While Equifax has said last week’s incident didn’t compromise its computer systems, it is worrying all sorts of groups, including the IRS. “During this suspension, the IRS will continue its review of Equifax systems and security,” the agency said in a statement to Reuters. The report noted there are no signs that IRS data was provided to Equifax under the contract.

Because of the suspension of the contract, the IRS can’t create new accounts for taxpayers using the Secure Access portal, noted the report. Users that have Secure Access accounts won’t be impacted by the temporary suspension. The IRS gave Equifax the contract at the end of September after Equifax announced the data breach.

“From its initial announcement, the timing and nature of this IRS/Equifax contract raised some serious red flags … we are pleased to see the IRS suspend its contract with Equifax,” Republican Representatives Greg Walden and Robert Latta said in a joint statement, reported Reuters. “Our focus now remains on protecting consumers and getting answers for the 145 million Americans impacted by this massive breach.”

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