Stolen identity refund fraud is so rampant that J. Russell George, Treasury inspector general for tax administration, dubbed it 2013’s “No. 1 tax scam.” However, it has been going on for some time.
He reported that the IRS processed 1.5 million undetected stolen-identity returns during the 2010 tax year, 641,000 in 2011, and 1.2 million in the 2012 tax year, representing $5.2 billion in lost federal dollars.
Those committing this kind of fraud are brazen. For instance, someone filed 2,137 tax returns to the IRS in 2010 and used the same return address in Lansing, Mich. The illegal take from those returns totaled $3,316,051, according to the IRS.
That was not the only address to which hundreds of fraudulently obtained IRS refund checks were sent. Some 765 similar refunds went to the same address in Chicago (totaling $903,084), and 741 to the same address in Belle Glade, Fla. (totaling $1,004,897).
The magnitude of stolen identity fraud affecting the North Carolina Department of Revenue is unclear.