If the Internal Revenue Service's Data Retrieval Tool had used end-to-end encryption from the start, the federal government may have been able to avoid a privacy breach that ultimately occurred over the past year.
This tool allowed prospective students to transfer their tax return data to the Education Department for use in loan applications. Earlier this spring, the agency disabled it because identity thieves had used the tool to receive the personal financial data of potentially thousands of taxpayers in an effort to file fraudulent returns.
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One of the key lessons from this breach is that deploying default end-to-end encryption should be a priority for all enterprises handling sensitive information, especially the government. Following the president’s recent cybersecurity executive order, which urges federal agencies to “move to the cloud,” properly securing data there is more critical than ever.
Because of a statutory quirk, the IRS could not transmit taxpayer information directly to the Education Department. Instead, the agency relied on loan seekers to obtain their tax return information themselves through the Data Retrieval Tool, and then include it in their applications.
Unfortunately, the IRS tool had flaws that allowed identity thieves to masquerade as loan applicants. These cyber criminals could use already stolen personal information to download their victims’ tax data and subsequently file fraudulent returns.
Although hackers took advantage of the lack of proper authentication procedures necessary to access the Data Retrieval Tool, end-to-end encryption still could have saved the day. This technology cryptographically makes data unreadable at the start of its journey and only ever renders that data legible at the devices of authorized recipients—never at any intermediate point.
Those seeking student loans do not need to see the tax data they forward with their applications; they only need to transmit it from the IRS to the Education Department. As a result, the two organizations should have designed the Data Retrieval Tool to forward taxpayer data in end-to-end encrypted form, in which case the stolen information would have appeared as complete gibberish to the identity thieves who obtained it.
Unfortunately, government officials seem to have only considered this course of action after the major cybersecurity incident that resulted from their initial oversight, at which point they took down the Data Retrieval Tool for several months to add a comparable feature.
Bringing federal technology into the 21st century while keeping it secure will by no means be a simple task. Even though its systems were not to blame for the aforementioned incident, the Education Department is an example of the challenges the government faces in this regard.
Despite a chorus of warnings, especially from Congress, the department used more than 180 different data management systems as of 2016, many of which are outdated and insecure. Maintaining nearly 140 million unique Social Security numbers of ordinary Americans, the department has nonetheless ignored many security recommendations from its own inspector general.
Moving federal systems to the cloud, as the president’s recent guidance encourages, will assist in consolidating and protecting such arrays of overlapping systems, but doing so is not without risks. Although convenient, data stored in the public cloud can be an easy target for hackers, if not properly protected.
Fortunately, a new generation of secure, easy-to-use and competitively priced end-to-end encrypted file-sharing applications is now coming to market. These cheap and effective tools can help government organizations secure the data of their citizens more effectively, while still providing easy access to appropriate stakeholders through innovative security features.
As the Data Retrieval Tool incident demonstrates, limiting access to sensitive data through well-designed security measures is critical. Using end-to-end encryption by default is one readily available way to do so, which will more effectively protect American citizens in the cyber domain.