Investigators say the Internal Revenue Service may have delivered more than $5 billion in refund checks to identity thieves who filed fraudulent tax returns for 2011.
They estimate that another $21 billion could make its way to ID thieves' pockets over the next five years.
The Treasury Department's inspector general for tax administration says the IRS is detecting far fewer fraudulent tax refund claims than actually occur. Thieves assume the identity of a dead person, child or someone else who normally wouldn't file a tax return.
For example, investigators found one single address in Michigan that was used to file 2,137 separate tax returns seeking a total of more $3.3 million in refunds. In other cases, hundreds of refunds were deposited into the same bank account.
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