IRS says identity thieves targeting tax refunds

by: Robin Taylor Updated:

PITTSBURGH - The IRS is sounding an alarm about a hot new crime that's hard to stop. Identity thieves are targeting tax returns, stealing refunds and leaving the real taxpayer wondering why their check hasn't come in yet. Target 11 Consumer Investigator Robin Taylor uncovers the scheme.

It's the height of tax season. The IRS is processing tens of thousands of returns a day, but some of those returns are fraudulent, because crooks have found a clever way to cash in.

They use fake W-2s and fake Social Security cards to commit this brazen new form of fraud. The IRS says often the Social Security numbers are stolen. Then, the thieves file an online tax return using the taxpayer's name and a fictitious income.

Then they get the IRS to issue the refund on a debit card. Real taxpayers don't see a dime.

"The IRS is concerned about it. That's why we put so many resources into this issue," said Terry Lemons, an IRS spokesman.

It's gotten so bad that the number of dodgy tax returns pulled for suspected identity theft topped a quarter million last year That is more than 5-fold increase from the year before.

The IRS is calling it a hot new crime trend that's not easy to stop.

"It's very difficult for us when a tax return comes in, on the surface, to determine whether or not there's identity theft involved," said Lemons.

The IRS is ratcheting up electronic filters to spot questionable returns. They're also hiring more people and training 35,000 employees to spot identity theft, but that won't stop everyone.

"You'll always have crooks," said Margaret Huckstep, a tax preparer who has seen her share of shenanigans over 30 years.

The IRS says victims of identity theft, who are entitled to a refund, will get it as quickly as possible.

For more information on tax fraud and identity theft visit the IRS' website.