WASHINGTON - The Internal Revenue Service does not always properly authenticate the identity of taxpayers calling its toll-free assistance lines before providing them with confidential tax account information, according to a new report publicly released today by the Treasury Inspector General for Tax Administration.

Millions of taxpayers call the IRS toll-free telephone service every year seeking answers to tax account questions. IRS employees are supposed to ask a series of questions to verify a caller's identity before answering questions about the taxpayer's account. This is done to protect the confidentiality of tax returns and return information. The information used to authenticate the taxpayer's identity, including his or her name, address, Social Security Number, date and place of birth, is considered to be Personally Identifiable Information (PII), which can be used in identity theft.

TIGTA evaluated the IRS's controls over the authentication of taxpayers who call the IRS's toll-free telephone numbers to determine whether current procedures reduce the risk of unauthorized disclosures of taxpayer PII.

Taxpayers who call the IRS-toll-free lines are at risk of having their PII inadvertently overheard and disclosed during conversations with assistors, TIGTA found. TIGTA auditors listened to a sample of audio-taped calls between IRS employees and taxpayers and were able to hear parts of assistors' conversations with other callers.

"As the telephone continues to be one of the primary tools taxpayers use to communicate with the IRS, taxpayers need to be assured that the IRS is taking every precaution to protect their personal information from inadvertent disclosure," said J. Russell George, the Treasury Inspector General for Tax Administration.

TIGTA recommended that the IRS require assistors to ask additional questions to potential-risk callers, train assistors on the importance of controlling calls, and incorporate available technology to reduce the number of times taxpayers must be authenticated. The IRS agreed with three of TIGTA's recommendations but said that requiring taxpayers who provide incorrect responses to questions regarding their address or date of birth to correctly answer additional questions was unnecessary.