IRS "hackathon" Poses Major Risks to Taxpayers

Recent reporting in WIRED indicates DOGE affiliates are planning a “hackathon” this week to develop a platform through which “anyone with access could view and possibly manipulate all IRS data in one place.” The Tax Law Center is highlighting the following major risks to all taxpayers and including links to Tax Law Center analysis where you can learn more about them.

• Taxpayer privacy violations. We have previously explained that we do not see, based on available information, how certain extraordinarily broad attempts by DOGE to access taxpayer data—such as an omnibus information sharing agreement across agencies—could conform with strict taxpayer confidentiality laws…..
• Risks to Social Security and other benefits. DOGE is reportedly seeking to enable data sharing for cross-referencing enrollment in federal benefit programs, including those that serve low-income individuals and families. Participants could face severe immediate hardship if the platform is used to enable data sharing for that purpose and, as a result of DOGE’s efforts, they are incorrectly–even inadvertently–denied benefits.
• Cybersecurity threats and large-scale data breaches. IRS data includes highly sensitive information such as taxpayer identification numbers, sources of income, and addresses. Consolidating this data in one platform increases the risk that such data could be intentionally or inadvertently exposed.
• Targeting political enemies or benefiting allies. If DOGE affiliates have access to the platform and can manipulate tax information, they could potentially trigger investigations and audits of anyone falling out of favor with DOGE, and stop valid investigations or audits of allies.
• Risks to tax filing due to the diversion of resources. An IRS employee told WIRED that the amount of technical work that would go into developing this platform “will also potentially endanger filing season next year, because obviously all these other systems they’re pulling people away from are important.”
• Using the data for personal gain, including by monetizing the information for the businesses of DOGE affiliates. Conflicts of interest related to DOGE’s work have already appeared at other agencies. Reporting also suggests that a private software company [Palantir —lambert] could be a partner in developing the platform.
• Undermining confidence in the tax system. The perception that personal information shared with the IRS is not secure or could be used by partisan actors to advance a political agenda could discourage people and businesses from filing tax returns and sharing information with the IRS. Even small decreases in voluntary compliance with federal tax obligations could generate large revenue losses. Recent reporting suggests that some Treasury and IRS officials are concerned that a substantial decline in tax revenues could already be occurring due to DOGE’s IRS-related actions.