Criminals Hack U.S. Tax Records; File 22,000 Fraudulent Tax Returns

Hackers posing as students applying for financial aid fraudulently obtained 8,000 tax refunds, costing the US government $30 million and exposing thousands of people to identity theft, the Internal Revenue Service announced Thursday.

FAFSA online application (Photo: US Federal Government CC0)The cyber criminals gained access to the tax records of nearly 100,000 people who used an online tool that allowed them to upload their tax information to the Free Application for Federal Student Aid (FAFSA).

The IRS took the Data Retrieval Tool offline at the peak of tax season last month, causing outrage.

IRS commissioner John Koskinen said he had told his staff that "as soon as there was any indication of criminal activity, we would have to take that application down."

Without the automatic tool students have to input information manually, a time consuming process which prevents them from accessing first come, first serve aid or deter them from applying all together.

The breadth of the breach remains unknown, but at least 14,000 fraudulent refunds were blocked by the IRS.