The IRS has been castigated for IT security flaws that leave millions of US taxpayers open to identity theft and invasions of privacy by police.

The Government Accountability Office, in a report to Congress found the IRS to have no systems in place for identifying breaches in data protection.

Nearly 40 new security problems have been found. This is in addition to 20 that have not been fixed since they were pointed out in 2002.

An example is that there are no systems barriers between tax returns and and money laundering reports.

Thus, IRS files can be searched by police investigating money laundering. Conversely, IRS staff and contractors can have access to money-laundering files, which has the potential to compromise investigations.

The IRS have said that a number of issues raised in the GAO's report have been fixed.

The report comes in the same week as data information firms, admitted covering up numerous breaches, before a Senate Committee.

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