South Carolina Revenue Director Resigns; Over 4 Million Taxpayer Accounts Hacked

On Tuesday, South Carolina Governor Nikki Haley said that she had accepted the resignation of the Department of Revenue Director Jim Etter over a report showing huge security breach at the South Carolina tax agency. The report from computer security firm Mandiant showed that nearly 4 million taxpayer accounts had been hacked, and alleges that the state could have done more to protect vital information of residents.

The report mentioned that the breach affected people who filed their returns electronically, and a hacker was able to obtain personal information and social security numbers of 3.8 million taxpayers and 1.9 millions dependants. The hacker was also able to access the particulars of 699,900 businesses in the state.

Governor Haley blamed the situation on a combination of computers from the 1970s and a compliance system that did not mandate latest security arrangements. In other words, regardless of whoever led the agency, the breach could have happened.

However, now that the hacking has happened, she said, “We need a new set of eyes at the Department of Revenue.” Haley also made clear that Etter’s decision to resign does not indicate in any manner that he is to be blamed for the hacking.

According to the report, the state machinery made two mistakes – first, it didn’t require Social Security numbers to be encrypted, and second it did not require two different ways to verify when someone was trying to enter the system to access tax returns.

Haley admitted, “We didn’t do enough. We should go above and beyond to make sure we do.”