IRS suspends Equifax contract, cites ‘new information’

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IRS suspends Equifax contract, cites ‘new information’

The Internal Revenue Service has suspended its $7.25 million contract with Atlanta-based Equifax, the agency announced Friday.

The decision came a day after the company was forced to shut down one of its customer service web sites, a page that had been manipulated by hackers who had apparently placed malicious software on the site.

That hijacking was acknowledged by Equifax after the misuse of the site was reported by tech magazine Ars Technica.

The IRS, no-bid contract was granted to Equifax, “to provide fraud prevention and taxpayer identification services.” The deal was roundly criticized, since it came in the wake of disclosure of the breach in which hackers gained access to information about 145 million people. 

According to a statement issued by Equifax Friday afternoon the IRS had notified the company of the suspension. 

“We remain confident that we are the best party to perform the services required in this contract,” the statement said. “We are engaging IRS officials to review the facts and clarify available options.”

The IRS had awarded the contract to Equifax the same week that the company’s former chief executive was testifying before Congress about the massive data breach suffered by the company.

In a statement Friday, the IRS said the suspension was temporary. The action was taken “following new information available today,” the IRS said.

“During this suspension, the IRS will continue its review of Equifax systems and security,” the IRS said. 

The agency said it does not believe that any data shared by the IRS with Equifax had been compromised. The suspension was taken as “a precautionary step as the IRS continues its review,” the agency said.

The company said Thursday that the problems with its web site had involved a “third party” and did not give hackers to any information held by Equifax. However, the danger, experts said, was that the software tricked visitors into providing data thinking they were giving it to Equifax.

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