WASHINGTON - The Internal Revenue
Service issued $4 billion in fraudulent tax refunds last year to people using
stolen identities, with some of the money going to addresses in Bulgaria,
Lithuania and Ireland, according to a Treasury report released Thursday.
The IRS sent a total of
655 tax refunds to a single address in Lithuania, and 343 refunds went to a
lone address in Shanghai.
In the U.S., more
fraudulent returns went to Miami than any other city. Other top destinations
were Chicago, Detroit, Atlanta and Houston.
The IRS has stepped up
efforts to fight identity theft, but thieves are getting more aggressive, said
the report by J. Russell George, Treasury's inspector general for tax
administration. Last year, the IRS stopped more than $12 billion in fraudulent
refunds from going to identity thieves, compared with $8 billion the year
before.
"Identity theft
continues to be a serious problem with devastating consequences for taxpayers
and an enormous impact on tax administration," George said in a statement.
The fraud "erodes taxpayer confidence in the federal tax system."
Thieves often steal
Social Security numbers from people who don't have to file tax returns,
including the young, the old and people who have died, the report said. In
other cases, thieves use stolen Social Security numbers to file fraudulent tax
returns before the legitimate taxpayer files.
The IRS, which takes
pride in issuing quick refunds, often sends them out before employers are
required to file forms documenting wages, the report said.
"The constantly
evolving tactics used by scammers to commit identity theft continues to be one
of the biggest challenges facing the IRS, and we take this issue very
seriously," the IRS said in a statement. "The IRS has a comprehensive
and aggressive identity theft strategy that focuses on preventing refund fraud,
investigating these crimes and assisting taxpayers victimized by it."
Despite budget cuts, the
agency said, agents have resolved more than 565,000 cases of identity theft
this year, three times the number of cases resolved at the same time last year.
A separate report by
George said the number of identity theft victims is on the rise as thieves get
more aggressive.
Through June, the IRS
identified 1.6 million victims who had their identities stolen during this
year's tax filing season, the report said. That compares with 1.2 million
victims in 2012.
Many of these people
didn't realize they were victims until they submitted their returns, only to
learn from the IRS that someone else had already used their Social Security
number to file and claim a refund.
The IRS does a good job
of eventually identifying the proper owner of Social Security numbers, but the
process can be lengthy, the report said. For cases closed between August 2011
and July 2012, it took an average of 312 days to resolve the case and issue a
proper refund, the report said.
The IRS said has
resolved most of this year's identity theft cases within 120 days.
Last year, the IRS
issued 1.1 million refunds to people using stolen Social Security numbers, the
inspector general's report said. Those refunds totaled $3.6 billion.
Additionally, the IRS
issued 141,000 refunds last year to people using stolen Taxpayer Identification
Numbers, which are typically used by foreign nationals who earn money in the
U.S. Those refunds totaled $385 million, the report said.
Source: AP, November 8,
2013, printed on GOP USA gopusa.com
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