Identity Theft of US Tax Refunds

in Business Risk

In the first six months of 2013, there were about 1.6 million identity theft victims in the United States who had their federal tax refunds stolen directly from the Internal Revenue Service. The number of victims in the first half of 2013 was more than the 1.2 million total taxpyers who had their refund stolen in all of 2012.

Although the number of total victims of ID theft is going up, the IRS reports that the amount stolen is decreasing. Based on the latest available data, the US governent lost $3.6 billion in fraudulent tax refunds in 2011, down from the $5.2 Billion in 2010.

According to an investigation, many of the stolen identifications are used in foreign countires to claim a person’s tax refund. One single addresss in Lithuania was found to have received more tax fillings than any address in the United States. The address in LIthuania received $220,489 in fraudulant IRS refunds using stolen identifites.

Source:  Patrick Temple-West, “Tax refund ID theft is growing ‘epidemic’: U.S. IRS watchdog,” Reuters, November 7, 2013.

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