Equifax, the consumer credit reporting agency that is under fire after it was effectively targeted by hackers, was awarded a $7.25 million federal contract with the Internal Revenue Service last week.
The IRS awarded Equifax the contract to confirm taxpayer identities and prevent fraud, according to Politico. The contract award itself requires Equifax to "verify taxpayer identity" and "assist in ongoing identity verification and validations" at the bureau.
The decision has been controversial.
"In the wake of one of the most massive data breaches in a decade, it’s irresponsible for the IRS to turn over millions in taxpayer dollars to a company that has yet to offer a succinct answer on how at least 145 million Americans had personally identifiable information exposed," said Senate Finance Committee Chairman Orrin Hatch of Utah in a statement to Politico.
The IRS defended its decision in a statement, saying, "The service Equifax provided does not pose a risk to IRS data or systems."
This story has come out at a time that has brimmed with bad PR for Equifax. On Monday Equifax admitted that hackers had stolen the data from 2.5 million more people than they initially estimated, raising the total number of victims in the United States from 143 million to 145.5 million. Former Equifax CEO Richard F. Smith told Congress on Tuesday that the hacking had been made possible because of a mistake by a single employee in Equifax's technology department. On previous occasions, Equifax had blamed an unpatched software flaw for the security breach, but Smith's testimony on Tuesday added the claim that there was also "human error" at play.
Smith resigned last week due to the controversy over the company's role in creating conditions that allowed the hacking to happen.
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