Under pressure from Congress, IRS suspends Equifax contract

IRS halts Equifax fraud prevention contract

The IRS confirmed today that it has suspended a $7.2 million bridge contract awarded to Equifax for identity management and authentication services.

The tax agency said late Thursday that it's putting the deal on hold "as a precautionary step".

"During this suspension, the IRS will continue its review of Equifax systems and security".

Atlanta-based Equifax said its systems were not compromised by the incident on Thursday, which involved bogus pop-up windows on the web page that could trick visitors into installing software that automatically displays advertising material.

The decision comes one week after the agency received a torrent of criticism from members of Congress and the public for the award and less than one month after Equifax revealed that hackers had stolen the sensitive personal information of 145 million Americans.

Senators Ben Sasse, a Republican from Nebraska, and Elizabeth Warren, a Democrat from MA, raised concerns about the IRS contract last week in a letter to the agency's commissioner.

At an October 4 House hearing, IRS officials told lawmakers that a bid for identity management services and e-authentication of taxpayer identities was initially awarded to another contractor, later confirmed to be Experian Information Solutions.

Government contracts in areas such as healthcare, law enforcement, social services, and tax and revenue, are major sources of revenue for Equifax.

"After sending a bipartisan letter to Commissioner Koskinen expressing our concerns, we are pleased to see the IRS suspend its contract with Equifax and look forward to the agency's response to our inquiries", House Energy and Commerce Committee Chairman Rep. Greg Walden, R-Ore., and Subcommittee on Digital Commerce and Consumer Protection Chairman Rep.

We have reached out to Equifax for comment and will update this story if and when they respond.

"We remain confident that we are the best party to perform the services required in this contract", the spokesperson said. There was no indication that any of the IRS data shared with Equifax under the contract had been compromised, it added. The IRS said taxpayers who already have accounts will not be affected.

The protest was being evaluated by the Government Accountability Office, but IRS officials told Congress that they were concerned that the contract could expire before a resolution could be made, jeopardizing the functionality of the e-verify service for users.

Late on October 12, the IRS said that it was temporarily suspending the contract, a move applauded by lawmakers.

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