irs security breach identity theftNot too long ago, the IRS released information that tax transcripts had been breached using the “Get Transcript” application. In relative terms, the breach is somewhat small, with approximately 100,000 successful attempts to get access to tax transcripts and another about 100,000 unsuccessful attempts.

It’s important to understand that access to these transcripts doesn’t mean that other tax accounts were compromised. A tax transcript isn’t the same thing as accessing other IRS information, and the larger IRS databases weren’t hacked. Tax attorney Kelly Phillips Erb offers good coverage of the situation in her column at Forbes.

However, just because access to a tax transcript isn’t quite the cause for panic that some people have felt, it doesn’t mean that you are in the clear. It’s important to understand what a tax transcript is, and what it might mean for identity theft down the road.

What is a Tax Transcript?

Your tax transcript is a record of your tax return; it’s not the return itself. If you can’t find your own return, it’s possible to get the information you need from your tax return by getting a copy of your transcript. According to the IRS, here is the information you can expect to find when you look at your tax transcript:

  • Most line items on your filed tax return
  • Information from forms and schedules filed with your tax return
  • Changes that you have made to your return, or that the IRS has made to your return after you have filed it
  • Other information about you, including marital status, type of return, AGI and taxable income

You can usually get a tax transcript showing your current year information, along with transcripts for the past three years. As of this writing, the “Get Transcript” application isn’t available through the IRS website since efforts are being made to beef up security.

Your Identity and Your Tax Transcript

One of the first things to be aware of with this breach is the fact that IRS officials point out that getting access to the tax transcripts through the app requires that those gaining access already have possession of certain information. This might be information about past loans or about things like your high school mascot. If you receive a notification from the IRS that your tax transcript was part of the breach (and you will get a letter if you are affected), you should consider your identifying information. Someone might have access to a black market database containing information that is commonly used to answer security questions. You might want to reconsider what information you share publicly, as well as consider changing your security questions.

Next, this is a good time to be on the alert. According to IRS officials, the information on the affected transcripts might be used in the future for identity theft. While your refund might be safe this year, an identity thief might use the information to try to muscle in on your refund next year. Other fraudulent transactions might be completed using this information as well, so it’s important to be on the alert, checking your credit report and monitoring other accounts.

It’s a good idea to be vigilant no matter what, but if you have been involved in a data breach of any kind, you might need to increase your alert levels.