Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

Trump’s Tax Return has already been hacked and so has yours

President Donald J. Trump’s federal tax returns are already in the hands of hackers, an expert investigator has concluded. The same expert thinks everybody else’s tax return is just as vulnerable as Trump’s.

“Considering Trump’s risk profile, the determination of his detractors, and the current state of cybersecurity, it’s almost inconceivable his tax returns haven’t been hacked—successfully—by someone with more experience and expertise,” John Powers wrote in a November 12, 2017, op-ed piece for Wired. Powers is the president of the Hudson Intelligence, which specializes in complex fraud and financial investigations.

Powers thinks Trump’s tax returns have probably been stolen from the IRS, or from accountants, lawyers, bankers, business partners, and others that do business with the president. Powers thinks that there is a simple reason why Trump’s returns have not been made public – there is nothing there.

His theory is that the returns show no wrongdoing or nothing illegal. That means reporters, foreign leaders, political opponents, and others have probably seen the returns and dismissed them as a waste of time.

The Entire U.S. Tax System is vulnerable to Hacking

What is truly frightening is what else Powers is saying; the entire tax system is vulnerable to hacking. Any American that files a federal return might have his or her data stolen.


There is a simple method of mitigating this threat; the federal government could shift to a return-free income tax system. Under that system the IRS would simply send everybody a tax bill, and people would either pay the bill or file for a refund. Only those with disputes would file returns.

That would not eliminate the threat of hacking but it would greatly reduce it, because less information would be stored at the IRS. Hackers would have less reason to target the IRS. More importantly in a return-free system, persons worried about security can pay their taxes with a money order, cryptocurrency, a onetime credit card payment, or some other hard to trace method.

Under the present system people have to send a vast amount of data to IRS; which makes it more vulnerable to hackers. Building such a system on the Ethereum blockchain; which would facilitate fast payment by hard to trace cryptocurrency, can further increase security.

Unfortunately, such common-sense solutions are unlikely from the federal government. That means the vast majority of Americans will be required to make themselves vulnerable to data theft by federal law every April.

Contractors at the Internal Revenue Service (IRS) include Equifax (NYSE: EFX) – the poster child for corporate hacking victims. The biggest threat to the security of average Americans is their own government. Perhaps it would be a good thing if Trump’s returns were made public that might spur real tax reform or at least a debate about it.