...and boom goes the dynamite. (TurboTax)

[Glassunion]

83. I agree. However, never underestemate the power of stupid...

Filing paper returns does not make you safe. It will in this particular instance protect your data, however your tax information is not 100% safe. None of our tax info is safe.

1. File a paper return
2. IRS receives your paper return
3. IRS employee keys (actually I think they scan it now) your data into their systems
4. IRS systems generate your returns, process payments, flag for audit, etc...

Now here are the risks...

Realities
A. IRS accidentally posts your SSN information on a public website
B. An IRS employee takes personal information home and puts it on their personal internet connected computer
C. The IRS receives a request from someone identifying themselves as law enforcement requesting information, however they do not validate the identity of the requester. Then when they try to go back and validate, they cannot verify who the requester was or what they were given in over 70% of the requests because they do not keep the best of records.
D. IRS employees simply maliciously use the data in identity theft crime
E. (My personal favorite), an IRS supervisor, who has the responsibilities of auditing small businesses and self-employed taxpayers. In particular they were in charge of identifying which taxpayers are to be audited, assigning the auditor, and overseeing the audit. They then run a private outside business that performs tax and accounting services for a fee, including representation of taxpayers before the IRS.