Beware! Tax time bad enough without tax return hackers stealing identities! New identity theft scam!

In testimony before the Senate Finance Committee on April 6, IRS Commissioner John Koskinen revealed yet another security breach of government infrastructure which affects about 100,000 student FAFSA applications.

Each year, students fill out online forms to determine eligibility for financial aid via the Free Application for Federal Student Aid (FAFSA) form.  Part of that process may involve the use of a data retrieval tool that allows applicants to upload tax-return information from the IRS.  Last March, the IRS and Education Department disabled this feature after identity thieves retrieved personal information from it to file fraudulent tax returns.

In his testimony, the Commissioner said this information was used to obtain about 8,000 fraudulent refunds, totaling $30 million.  After the breach was discovered, the IRS thwarted tens of thousands of other refunds and returns.

This does not mean students will be stopped from applying for financial aid, but authorities express concern that that the unavailability of this tool will discourage “low-income students” from applying for financial aid because they must enter their family’s financial information by hand, according to Fox Business.

Lawmakers are concerned that those low-income students with non-savvy parents, or those without access to guidance counselors, are less likely to finish the forms.  Because the tax data must be hand-entered, more students may be asked to verify the information with actual documents, further frustrating the process.

The tool to expedite retrieval of tax information is expected to be available again on Oct. 1 for the 2018-19 academic year.