|IRS Loses More Computers,
Jeopardizes Taxpayer Info
|8/15. The Treasury
Inspector General for Tax Administration (TIGTA) completed
an audit report that found that the Internal Revenue Service (IRS)
cannot physically locate many of its computers, and that it
cannot ensure that taxpayer e-file data was removed from the
lost computers. This is the latest in a string of reports
documenting loss of computers by federal agencies.
Sen. Charles Grassley
(R-IA) wrote a letter
to Office of
Management and Budget (OMB) Director Mitch
Daniels on August 15 to state that "the federal
government has discovered core competency of losing
This audit report focuses only on the IRS's Volunteer Income
Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE)
Sen. Grassley also wrote a letter
to IRS Commissioner Charles Rossotti on August 15 regarding
this loss of computers. He wrote that "the report
reveals, among other things, that IRS 1) cannot physically
account for computers provided to volunteers and 2) did not
ensure that taxpayer e-file data was removed from volunteer
computers at the end of the 2001 filing season."
Sen. Grassley added that "TIGTA's conclusions are
disturbing, to say the least. From my read of the audit
report, it appears that IRS neither knows how many computers
in total it loaned to VITA and TCE volunteers nor the
disposition of the computers it does know it loaned to the
same volunteers. As far as I can tell, potentially thousands
of computers in the VITA/TCE program are unaccounted
Sen. Grassley is the ranking Republican on the Senate Finance
Committee, which oversees the Treasury Department and its
components, which include the IRS and the Customs Service. He
is also a senior member of the Senate Judiciary
Committee, which oversees the Department of Justice (DOJ)
and its components, including the Federal Bureau of Investigation
Grassley (picture at right) also wrote in his letter to Mitch
Daniels that "In recent days we have seen Inspectors
Generals' reports of the Federal Bureau of Investigation (FBI)
and Customs Service having thousands of computers that are
lost, stolen or missing. Earlier in the summer we learned in
another Inspector General report that the Internal Revenue
Service (IRS) had approximately 2,300 computers that were lost
or stolen. I'm worried that just as dryers have the knack of
making socks disappear the federal government has discovered a
core competency of losing computers."
He also addressed the latest report regarding losses at the
IRS's VITA/TCE programs. He wrote that "this report
states that the situation is so poor that the IRS does not
even know how many computers are missing".
He also stated that the report concludes that the IRS does not
know how many taxpayer returns have been compromised. He wrote
that "it is particularly disturbing that sensitive
taxpayer information that was on these computers was not
adequately protected. Again, the situation is so bad that
TIGTA cannot even determine the number of the 1.1 million tax
returns prepared under VITA/TCE in Filing Season 2001 that may
be in jeopardy".
Sen. Grassley added that "Information on tax forms is
regarded as a prime target for identity thieves, including
names, social security numbers, income, employment and bank
Sen. Grassley has been pressuring the agencies that his
Committees oversee to report and remedy rampant computer
losses. He has previously addressed computer losses at the
DOJ, FBI, Customs Service, and IRS.
The Treasury Inspector
General for Tax Administration (TIGTA) released a report
on November 29, 2001, titled "Management Advisory Report:
Review of Lost or Stolen Sensitive Items of Inventory at the
Internal Revenue Service". This report stated that
"For the past 3 years, the IRS reported approximately
2,300 missing computers".
See also, letter
of January 7, 2002, from Sen.
Charles Grassley (R-IA) to Mitch Daniels, and story titled
"Sen. Grassley Condemns IRS for 2,300 Missing
Computers" in TLJ
Daily E-Mail Alert No. 342, January 9, 2002.
See also, TLJ story titled "Customs
Service Loses 2,251 Computers", August 8, 2002, and
TLJ story titled "FBI
Loses 317 Laptops", August 5, 2002.
Withholds Report on Network Security Weaknesses at IRS
|8/15. The Treasury
Inspector General for Tax Administration (TIGTA)
completed, but did not release to the public, an audit report
titled "Persistent Security Weaknesses at Internet
Connections Can Be Traced to a Lack of Policies and
The TIGTA stated that it has "has designated this report
as Limited Official Use (LOU) ... Because this document has
been designated LOU, it may only be made available to those
officials who have a need to know the information contained
within this report in the performance of their official
duties. This report must be safeguarded and protected from
unauthorized disclosure ..."
The report is dated August 2002. It is Reference Number:
2002-20-145. See, TIGTA
|Bush Addresses Homeland
|8/15. President Bush gave a speech
at Mt. Rushmore, South Dakota, in which he addressed, among
other things, legislation to create a new Department of
Homeland Security. The House passed the bill before leaving
for the August recess. The Senate recessed without taking
He said that "I called upon Congress to join me in the
creation of a Department of Homeland Security. And we're
making some progress on the Department of Homeland Security.
But I'm a little worried about some of the noise I hear. I
don't want our hands tied so we cannot do the number one job
you expect, which is to protect the homeland."
He continued that "I need to be able to ship resources
without a time consuming approval process. If you're trying to
defend the homeland, if you need to act quickly in response to
a threat, we need to be able to move resources. We're not
trying to do away with congressional authority. We're trying
to have the capacity to respond to the needs of the American
people. Unfortunately, the bill in the Senate right now won't
let me do that."
|Federal Circuit Opinions
|8/13. The U.S.
Court of Appeals (FedCir) issued its opinion in Abbott
Laboratories v. TorPharm, a patent infringement
case involving TorPharm's attempt to introduce a generic
version of Abbott's Depakote, an anticonvulsant medication
used to treat epilepsy, migraine headaches and bipolar
disorder. The Appeals Court affirmed the District Court's
rulings on validity and enforceability of the patent in suit,
but vacated the grant of summary judgment of infringement, and
8/14. The U.S.
Court of Appeals (FedCir) issued its opinion in Bayer
v. Carlsbad Technology, a patent case involving
antibiotic ciprofloxacin. The Appeals Court affirmed the
District Court holding regarding the expiration date of the
patent at issue.
8/15. The U.S.
Court of Appeals (FedCir) issued its opinion in Bionx
Implants v. Linvatec, a patent infringement
case involving a surgical fastener that is used to repair
tears in the meniscus of the knee. The Appeals Court vacated
and remanded the District Court's summary judgment of
|IRS Seeks John Doe
Summonses for Credit Card Records
|8/15. The Department of
Justice (DOJ) and Treasury
Department announced that the DOJ filed a petition in U.S.
District Court (SDFl) seeking "approval to serve a John
Doe summons on MasterCard for records on transactions using
credit cards issued by banks in over 30 tax haven countries
for 1999-2001." See, Treasury
The DOJ stated in a release
that "The petition filed today seeks records relating to
the years 1999, 2000 and 2001, of cards issued by banks in
more than 30 countries. The 30 countries include
Liechtenstein, Switzerland and numerous Caribbean nations,
such as Belize, Bermuda, and St. Kitts and Nevis. Recently, a
federal court in San Francisco authorized the IRS to serve a
summons on Visa International for records of cards issued by
banks in those same 30 countries."
|Wednesday, August 21
|Deadline for those persons requesting to testify at the Federal Election Commission's (FEC)
August 28-29 hearing to submit comments to the FEC regarding
its second Notice
of Proposed Rulemaking (NPRM) [67 pages in MS Word]
regarding the Bipartisan Campaign Reform Act of 2002 (BCRA),
the recently enacted campaign finance reform legislation. This
NPRM pertains to "electioneering communications".
The proposed rules would exempt webcasts. See also, FEC release.
|Thursday, August 22
|RESCHEDULED FOR SEPTEMBER 5.
|10:00 AM - 12:00 NOON. The Federal Communications Commission's
(FCC) Advisory Committee for the 2003 World Radiocommunication
Conference (WRC-03 Advisory Committee) will hold a meeting.
in Federal Register, July 19, 2002, Vol. 67, No. 139, at Page
47549. See, notice
in Federal Register, August 2, 2002, Vol. 67, No. 149, at
Pages 50437 - 50438, rescheduling the meeting.
|People and Appointments
|8/15. Federal Bureau of
Investigation (FBI) Director Robert Mueller appointed Bruce
Gebhardt as Deputy Director of the FBI, the second highest
ranking position in the FBI. Gebhardt is currently the
Executive Assistant Director for Criminal Investigations, with
oversight for all criminal and cyber investigations. See, FBI
8/15. Dale Watson, Executive Assistant Director for
Counterterrorism / Counterintelligence at the Federal
Bureau of Investigation (FBI), will retire. See, DOJ
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