Tax Fraud via FAFSA
The Internal Revenue Service (I.R.S.) has announced that as many as 100,000 taxpayers may have been compromised through a breach of a tool related to the FAFSA (Financial Aid) process. Attackers were able to leverage a convenience built into the application process which would auto-fill the students’ and parents’ tax information from I.R.S. databases. The goal of the tool was to make it easier for families to complete the lengthy application. However it was taken offline after I.R.S. officials noticed higher-than-average rates of incomplete applications.
A common scam involves filing false tax returns in order to steal the refund checks. The FAFSA breach appears to have been used to carry out this kind of attack. The I.R.S is in the process of notifying 100,000 taxpayers of the potential identity fraud and has issued refunds to fewer than 8,000 returns which are believed to have been fraudulent.