WASHINGTON (AP) — The Internal Revenue Service issued $4billion in fraudulent tax refunds last
year to people using stolenidentities, 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.Inthe U.S., more
fraudulent returns went to Miami than any other city.Other top destinations were Chicago, Detroit,
Atlanta and Houston.TheIRS has stepped up efforts to fight identity theft, but thieves aregetting more
aggressive, said the report by J. Russell George,Treasury’s inspector general for tax administration.
Last year, the IRSstopped more than $12 billion in fraudulent refunds from going toidentity thieves,
compared with $8 billion the year before."Identitytheft continues to be a serious problem with
devastating consequencesfor taxpayers and an enormous impact on tax administration," George saidin
a statement. The fraud "erodes taxpayer confidence in the federaltax system."Thieves often
steal Social Security numbers frompeople who don’t have to file tax returns, including the young, the
oldand people who have died, the report said. In other cases, thieves usestolen Social Security numbers
to file fraudulent tax returns before thelegitimate taxpayer files.The IRS, which takes pride in
issuingquick refunds, often sends them out before employers are required tofile forms documenting wages,
the report said."The constantlyevolving tactics used by scammers to commit identity theft continues
tobe one of the biggest challenges facing the IRS, and we take this issuevery seriously," the IRS
said in a statement. "The IRS has acomprehensive and aggressive identity theft strategy that
focuses onpreventing refund fraud, investigating these crimes and assistingtaxpayers victimized by
it."Despite budget cuts, the agency said,agents have resolved more than 565,000 cases of identity
theft thisyear, three times the number of cases resolved at the same time lastyear.A separate report by
George said the number of identity theft victims is on the rise as thieves get more
aggressive.ThroughJune, the IRS identified 1.6 million victims who had their identitiesstolen during
this year’s tax filing season, the report said. Thatcompares with 1.2 million victims in 2012.Many of
these peopledidn’t realize they were victims until they submitted their returns,only to learn from the
IRS that someone else had already used theirSocial Security number to file and claim a refund.The IRS
does agood job of eventually identifying the proper owner of Social Securitynumbers, but the process can
be lengthy, the report said. For casesclosed between August 2011 and July 2012, it took an average of
312 daysto 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.Lastyear, the IRS issued 1.1 million refunds to people
using stolen SocialSecurity numbers, the inspector general’s report said. Those refundstotaled $3.6
billion.Additionally, the IRS issued 141,000 refundslast year to people using stolen Taxpayer
Identification Numbers, whichare typically used by foreign nationals who earn money in the U.S.Those
refunds totaled $385 million, the report said.___Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatapCopyright
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