January 22, 2007 3:03 PM PST

IRS tapes missing in Kansas City

Twenty-six computer tapes containing Internal Revenue Service taxpayer data have gone missing from City Hall in Kansas City, Mo.

The tapes were originally shipped to the City Hall building in August as part of an information-sharing agreement between the IRS and the municipality of Kansas City, according to The Kansas City Star.

Officials lost track of the tapes in December. On Friday, the local newspaper revealed that the city was working with the Department of the Treasury, of which the IRS is a division, in an attempt to locate the missing tapes' whereabouts. No updates have been provided.

Officials from City Hall could not be reached for further comment.

"There really isn't any excuse at this point other than poor management," said Avivah Litan, an analyst at research firm Gartner, who suggested that internal threats should not be ruled out in the investigation. "If you want to look at some of the biggest culprits, you don't have to look very far past the federal government," she commented, adding that it's nevertheless unlikely that this will turn into a major case of data theft. "In reality, the chances of anything bad happening are probably less than 1 percent."

IRS spokesman Michael Devine declined to comment on the matter, which he said was an "ongoing investigation."

But according to Litan, situations like the missing IRS tapes may have to be tackled differently in the future, because they've become increasingly common and high profile. "It's become practically impossible to control all the sensitive information out there on us, so a more effective solution would be making the information useless to thieves if it's stolen."

According to The Kansas City Star report, there was indeed some form of protection on the tapes that required special equipment to unlock them, but the data could still potentially be stolen and misused.

"After the (Department of Veterans' Affairs) lost laptops, even though the chances of identity theft taking place with these stolen devices is very small, you would think they would put a much higher priority on encrypting tapes in portable media," Litan said.

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