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Identity Thieves May Have Hacked Files of Up to 100,000 Financial Aid Applicants

Internal Revenue Service Commissioner John Koskinen said Thursday the information of up to 100,000 taxpayers may have been stolen in a security breach of an online tool used to apply for federal student aid.

Testifying before the Senate Finance Committee, Koskinen said the IRS identified suspicious activity in the files of people who were using a “data retrieval tool” as they filled out the Free Application for Federal Student Aid. FAFSA is the form the government and colleges use to determine financial aid for millions of students.

The web-based IRS data tool lets people upload tax-return information, but the IRS and Education Department disabled it in March after identity thieves tried to use personal information from it to file fraudulent tax returns. Koskinen told lawmakers that about 8,000 fraudulent refunds were issued, totaling $30 million. The IRS prevented another 14,000 illegal refunds from going out the door and halted action on 52,000 other returns.