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Elizabeth Warren joins Republican to challenge Equifax contract with IRS

“This is like a bad movie,” Senator Elizabeth Warren told reporters after a hearing with former Equifax chief executive Richard Smith Tuesday.
Susan Walsh/Associated Press
“This is like a bad movie,” Senator Elizabeth Warren told reporters after a hearing with former Equifax chief executive Richard Smith Tuesday.

WASHINGTON — The bipartisan rage against Equifax continues, and now the IRS is caught in the crossfire.

Massachusetts Senator Elizabeth Warren, a liberal, and Nebraska Senator Ben Sasse, a conservative, teamed up Wednesday night to write a letter challenging the Internal Revenue Service’s decision to grant a $7.25 million contract to Equifax to help verify taxpayers’ identities and prevent tax fraud.

The contract’s awarding came just weeks after the credit reporting company disclosed a security breach that exposed more than 145 million Americans to identity theft.

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“Rewarding a company that has exposed tens of millions of Americans’ personal data to criminals with millions of dollars in taxpayer funds to verify and validate personal tax-related data is a confusing decision,” the duo said in their letter to IRS Commissioner John Koskinen. “Right now, no businesses or consumers in Massachusetts or Nebraska would blindly trust Equifax to protect against fraud or handle sensitive personal information.”

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The IRS has struggled for years to thwart thieves who use stolen Social Security numbers and other personal information to file false tax returns and steal people’s refunds.

“This is like a bad movie,” Warren told reporters after a hearing with former Equifax chief executive Richard Smith Tuesday. “I am stunned that in the middle of this crisis the IRS would decide that it wants to trust Equifax as a business partner.”

The IRS says its contract with Equifax is short-term and was awarded because the credit reporting agency is protesting the IRS’s decision to go with another vendor for the identity-verification services. The IRS said it needed a stopgap contract with Equifax to keep services running while the dispute is resolved.

Warren and Sasse are not the only lawmakers troubled by the IRS contract.

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‘‘You realize, to many Americans right now, that [it] looks like we’re giving Lindsay Lohan the keys to the mini-bar,” Senator John Kennedy, a Republican from Louisiana, told Smith during Tuesday’s hearing.

North Dakota Senator Heidi Heitkamp, a Democrat, urged Smith, the former chief executive, to tell his former Equifax colleagues to drop their protest over the IRS contract because of the bad optics it presented for the firm. Members of the House Ways and Means Committee grilled IRS officials about the contract at a separate hearing Tuesday.

‘‘Following an internal review and an on-site visit with Equifax, the IRS believes the service Equifax provided does not pose a risk to IRS data or systems,’’ the IRS said in a statement issued after news of the contract erupted.

Victoria McGrane can be reached at victoria.mcgrane@globe.com. Follow her on Twitter @vgmac.