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Stolen Tax Refunds Costing IRS Billions

(credit: KTVT/KTXA) Ginger Allen
Ginger is the Senior Investigative Reporter of the CB...
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FORT WORTH (CBS 11 NEWS) - A few clicks, hit send and you wait for that refund check. It’s easy, but maybe too easy.

“I went to file my taxes electronically and I got a message back saying someone had already done it,” says Clarity Smith.

Clarity Smith is among the tens of thousands of Americans each year who have had their tax refunds stolen.

It’s a crime that has exploded in the past few years.

“We have seen a rise in identity theft because more people are using the Internet these days and more crooks are getting on the Internet and they’re finding ways to get people’s personal information,” says Clay Sanford, media relations for the IRS.

In fact, the IRS says it has already closed 200,000 cases so far this year.

But that may just be the tip of the iceberg.

A Treasury Inspector General audit found as many $1.5 million tax returns were filed fraudulently in 2012.

“We will work with taxpayers and help them get back what is rightfully theirs,” says Sanford.

That’s good news for victims, but in essence that means the IRS is paying twice — once to crooks and then again to legitimate filers.

An estimated 21 billion tax dollars will be lost this way in the next 5 years, meaning in the end we all pay.

Plus, it may take a while for the IRS to pay you if someone else claims your refund.

On average the wait is 180 days.

That’s about how long it took for Smith to get her refund.

“It was a huge hassle. I got my IRS income refund 6 months after I filed,” says Smith.

The IRS has doubled the number of people it has working on identity theft cases.

It’s also issuing special pin numbers to people who have already been the victims of tax fraud theft.

Click here for more information about how to protect yourself.

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