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IRS Cracks Down on Surging ID Thefts

The Internal Revenue Service is seeing a big jump in thieves stealing Social Security numbers to fraudulently claim tax refunds, the agency said Tuesday. The IRS launched 1,492 criminal investigations into identity theft last year, a 66 percent increase from the year before. Prosecutions and indictments more than doubled. The numbers dwarf those from just two years ago.

In all, the IRS said it has flagged 14.6 million suspicious tax returns since 2011, blocking more than $50 billion in fraudulent refunds.

New IRS Commissioner John Koskinen told reporters this week that stopping identity theft was a top priority for the agency.

"The people working on that are confident that while it's a growth industry for the last two or three years that it's getting under control," Koskinen said at his introductory news conference Monday. "I would stress that it's an area that has everybody's attention."

In a common scam, thieves use stolen Social Security numbers to file tax returns early in the filing season so they can claim refunds before legitimate taxpayers file their returns. The IRS, which prides itself on issuing quick refunds, often sends out refunds before it receives documents verifying wages and other income from employers and financial institutions.

Koskinen said waiting for such documents could delay refunds for months. This year, the IRS boasts on its website that it expects to issue "more than nine out of 10 refunds in less than 21 days."

A recent inspector general's report said the IRS is stepping up efforts to fight identity theft but thieves are getting more aggressive.

-The Associated Press