Sunday, April 26, 2009
Some Americans who owe Uncle Sam will have to pay their taxes through a private contractor that previously allowed a hacker to access the personal financial data of 1.5 million people. The IRS hired RBS Worldpay to process credit card payments by taxpayers even though the company was blacklisted by credit card giant Visa because it is no longer in compliance with the Payment Card Industry (PCI) security standards, a set of guidelines designed to protect cardholder data. An RBS spokesman insisted that his company expects to be re-certified as PCI compliant in the near future.
The IRS agreement with RBS is a “zero dollar” contract. Instead of the government paying the company a specific amount, RBS will be allowed to charge taxpayers a 1.95% convenience fee on all payments. IRS officials said the company will not be allowed to process credit card payments for taxpayers until January 20, 2010, to give RBS time to demonstrate that it is once again PCI compliant and can pass an IRS security audit.
Word of the RBS contract angered leaders at the labor union representing IRS employees. The National Treasury Employees Union has urged President Barack Obama to cancel IRS private contracts, arguing that they waste taxpayer dollars and offend IRS employees who are better qualified.
RBS Worldpay is a subsidiary of The Royal Bank of Scotland Group, the fifth biggest banking group in the world.
-Noel Brinkerhoff
Union Reacts to New IRS Contract (by Ed O’Keefe, Washington Post)
IRS Awards Tax Payment Contract to RBS Worldpay (by Brian Krebs, Washington Post)
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