A nationwide sweep to rein in identity theft and tax-refund fraud targeted 105 people in 23 states, leading to 939 criminal charges, including 58 arrests and 10 guilty pleas, according to the Internal Revenue Service.
The sweep took place last week and involved 150 visits to check-cashing facilities to ensure the businesses didn’t facilitate fraud and identity theft, the IRS said in a statement today.
Identity theft in the past year has been on the rise with thieves stealing Social Security numbers, some stored in hospital and school databases, said Steven Miller, the IRS’s deputy commissioner for services and enforcement. The stolen numbers are used to file false tax returns for refunds, he said.
“It’s not something we’re taking lightly and we’ve dramatically stepped up our efforts” to catch the thieves before the refunds are made, Miller told reporters today on a conference call.
The sweep was an attempt to show that the IRS is ready to combat fraud as the tax-filing season begins, Miller said.
In the fiscal year that ended Sept. 30, the IRS stopped 260,000 fraudulent returns related to identity theft, protecting $1.4 billion in refunds, Miller said.
The U.S. initiated 187 investigations into identity theft in 2009 compared with 224 in 2010, according to the IRS.
Senator Bill Nelson, a Florida Democrat, said at a congressional hearing last year that taxpayers whose information has been stolen enter “an extended nightmare” as they work with government agencies to solve the thefts and settle issues with banks and other bureaucracies.
Hundreds of IRS investigators conducted the crackdown with officials from the Justice Department and U.S. attorneys, the IRS said.
Also, the IRS updated its computer systems to screen out potentially fraudulent claims, which inadvertently delayed refunds for some early filers by a week, Miller said. The delays aren’t related to last week’s sweep, he said.
“We don’t anticipate further delays,” he said.
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