IRS failed to do background checks on contractors

WASHINGTON - A government investigator says the IRS failed to do background checks on some private contractors who handled confidential taxpayer information, exposing more than a million taxpayers to an increased risk of fraud and identity theft.

In one case, the IRS gave a printing contractor a computer disk with names, addresses and Social Security numbers of 1.4 million taxpayers, but didn't require a background check for anyone working on the job. In another case, the IRS used a courier to transport sensitive documents who had spent 21 years in prison.

The report Thursday from the tax agency's inspector general did not review whether contractors actually misused taxpayer data.

In a statement, the IRS said it has taken steps to ensure that private contractors undergo proper screening.

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