Identity thieves are poised to claim $21 billion in fraudulent tax refunds over the next five years, according to a report by the inspector general who oversees the U.S. Internal Revenue Service.
The report released today documents the growth in tax fraud through identity theft and includes previously unreleased details of potentially fraudulent returns.
For example, the IRS sent more than $3.3 million in refunds to an address in Lansing, Michigan, that was listed on 2,137 separate tax returns. In at least 10 cases, the IRS sent more than 300 direct deposits of refunds totaling more than $470,000 to the same bank account.
"At a time when every dollar counts, these results are extremely troubling," said J. Russell George, the treasury inspector general for tax administration, in a statement. "Undetected tax refund fraud results in significant unintended federal outlays and has the potential to erode taxpayer confidence in our nation's system of tax administration."
The IRS has been seeking to combat identity theft for several years as it tries to keep up with evolving schemes while avoiding delays in legitimate refunds.
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