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If the IRS had wanted to prevent the leak of tax returns recently reported by Propublica, they could have done it. The methods are simple, effective and in use. They just didnt implement leak prevention methods. Why? The problem isnt money; the IRS spends billions of dollars a year on computer systems. Will this embarrassment get them to fix things? Ive read through the IRS Integrated Modernization Business Plan, the April 2019 document that describes how the IRS will spend many billions over the next 5 years to modernize their computer systems, and nowhere in the document is there a hint that theyll do anything but spend more money to implement more of the ineffective security systems they already have.

The IRS doesnt create or invent cybersecurity methods; they try to adhere to all the security regulations, follow the standards and take the advice of agencies that specialize in cybersecurity. These other agencies employ top experts who set the standards that institutions follow to protect their computer systems and confidential data. So whats going on here? Did the IRS suffer the tax data leak because they failed to implement one of these clear standards? Or is there something missing or wrong with the standards that affects the IRS and all the other organizations that are guided by them? Lets see.

Cybersecurity is a complex issue. Ive used the metaphor of a gated community to explain general computer security; while the walls and gates of a gated community tend to be secure and well-maintained, the equivalent in the computer world is a patch-work of incompatible wall sections from different manufacturers which are never built properly and often need fixes to be applied, which the computer managers too often take months to apply if they do the work at all.

Its possible that a hacker broke into the IRS. But what probably happened is that an IRS employee or contractor with legitimate access to IRS data decided to make a political statement by grabbing the files of ultra-wealthy Americans, smuggling them out of the agency and giving them to Propublica. This is known as an insider threat. Heres the shocker: modern corporate and government cybersecurity standards and regulations fail to prevent or even detect insider threats!

Insiders stealing the data of the company or agency they work for has happened many times. The famous Edward Snowden case is a classic example of an insider stealing secret information and leaking it for publication. Snowden was a contractor who worked at the super-secret NSA (National Security Agency). He saw the surveillance of citizens that was being performed by the agency and didnt think it was right, so he gathered lots computer files documenting the behavior and sent the files outside the agency for publication.

Snowden did electronically what Daniel Ellsberg did decades ago physically. Ellsberg was a military officer who had helped create reports describing in detail secret operations the US conducted during the Vietnam war. While working at the Top Secret RAND Corporation he gained access to a copy of the reports and walked out the door with them in his briefcase. He gave them to the press, where they were headlined as the Pentagon Papers.

The NSA has a positive reputation for cybersecurity. The cover story in Wired Magazine in June 2013 featured a description of a visit to NSA HQ in Fort Meade with its elaborate security measures. The strong impression given is that an organization that has so many strong walls, locks and cameras must be able to do the equivalent in the invisible world of computers. The timing of the cover story was perfect. Edward Snowden started leaking secret NSA documents in December 2012; the leaked documents were published shortly after the publication of the Wired Magazine issue praising the ultra-security of the NSA.

There are systemic issues that result in most of the successful hacks of governments and large companies which I describe here. What it comes down to is two main factors: the people in charge dont understand the world of computers; the people in charge take a slow, regulatory approach to security, while the opposition is fast and creative.

For the IRS, the data loss is similar to books being taken from a library without being checked out, and can be fixed using electronic versions of methods that librarians use: check the books anyone walks out with!

Personal tax information is valuable, like the goods sold by high-end retailers. Think about jewelry stores; nearly anyone can go in the store, but all the valuable jewels are closely watched as they are taken out of display cases, tried on and put down. You dont get away with slipping a diamond into your pocket and walking out of the store. Systems like this can be and have been implemented in the world of computers. I go into more detail here.

Going beyond basic monitoring of the behavior of computer users, its possible to translate methods that are in production today for catching credit card fraud to the problem of data leaks. Basically what you do is use machine learning to model everyones normal behavior concerning data access. When someone does something that is not normal for them, the model immediately notices and calls software to stop them and raise an alert.

In the case of the IRS the general behavior monitoring behavior could be refined, since IRS employees work on cases that have been assigned to them. The software would look at each file a user accesses and make sure that file is relevant to a case theyre working on; if not, the software would prevent access and raise an alarm. That way an errant employee who tried to pull Warren Buffets tax data who wasnt specifically assigned to the case wouldnt be allowed to do so. And the person working on Warren Buffets case wouldnt be able to access Elon Musks case.

Its less likely but possible that instead of the bad guy being an employee, it was a hacker who gained access to internal systems using methods similar to the ones that resulted in financial records of 147 million Americans being stolen from Equifax in 2017. I describe that hack here.

If the internal monitoring systems I have described were in place, it would also catch a person who had gotten into the IRS by hacking the beauty of the method is that you dont worry about who the actor is you just worry about what they do, just like in a library or jewelry store.

The cybersecurity problem isnt limited to giant government bureaucracies with outdated computer systems. Its widespread, in part because they all follow experts, standards and regulations that ignore the insider threat. I analyzed in detail the various experts who were quoted in articles published by the New York Times about the Wannacry ransomware attacks based on software that had been leaked from the NSA. I found that the experts were simply wrong about the reasons, methods and responses to the attack.

It is ironic that the same government authorities who force everyone to follow ineffective regulations they craft by the ton are spending even more money training young people in their methods. My local community college was conducting training sponsored jointly by the NSA and DHS (the Department of Homeland Security); when I looked into it I found that the experts couldnt even build functioning, secure websites with accurate information.

I sincerely hope that the ongoing flood of illegal leaks and ransomware attacks will end soon. But so long as the current batch of bureaucrats, regulators and experts are in charge of things, were likely to spend ever-increasing amounts of money on cybersecurity with ever-worsening results.

The rest is here:
Heres How The IRS Could Have Prevented The Tax Data Leak - Forbes