IRS announces enforcement effort to deal with growing taxpayer refund fraud

CLEVELAND - While many taxpayers are preparing to file this year's return, some northeast Ohio residents are still waiting for last year's refund. The IRS hasn't mailed out some refunds because those taxpayers are victims of identity theft. Thursday, the IRS announced new steps to deal with this growing problem.

IRS related identity theft increased 62 percent in 2012 leaving the government struggling to keep up with the growing problem.

Thomas McIntosh works hard for his money and expected the IRS would refund his overpayment soon after he filed his taxes in 2012. Ten months later, he has nothing.

"I know if we owed them money they'd be knocking on our door," Thomas McIntosh said.

McIntosh has been on the phone trying to get answers. All he knows is that it appears someone else used his identity to file a tax return.

"To me it's hopeless. You can't get a good answer from them," McIntosh explained.

Denise Lynch feels hopeless, too. She is her daughter's power of attorney and filed her return last April.

"They did receive my paper return, but two weeks later they had someone filing online to get her refund. They said that was a red flag and that's why they are not giving the return until they do an investigation," Lynch explained.

IRS increasing its enforcement actions
The IRS tripled its criminal investigations last year to 900. That's a small number when you consider there were 642,000 incidents of ID theft.

The IRS notes that it takes many hours to investigate these cases, and the time spent investigating increased 129 percent last year.

Already this year, there is proof the IRS is stepping up its caseload with 542 investigations in just January. The IRS worked with several agencies including State Attorney's Offices to target thieves in January.  In the nationwide effort, 389 people in 32 states and Puerto Rico, and included indictments, arrests, and search warrants involving potentially thousands of identities.

The IRS only has the resources to investigate the most serious cases, and admits it generally doesn't know who filed the fake return leaving victims to wonder.

"I'm hesitant to file now. I'll be honest with you. If i file I feel the same thing will happen to me. I'd like to have this resolved before I push ahead," McIntosh said.

Congressional leaders are a helpful resource
Your Congressman is your best bet to getting IRS fraud resolved. They can get the answers you need.

We contacted Sen. Sherrod Brown for both consumers. Within weeks, Lynch got her daughter's refund.

"My daughter is a single mom, and she works hard for her money. She doesn't make a whole lot and this is important to her.," Lynch explained.

Brown's office is still working with McIntosh to get him his money.

Sherrod Brown called this problem an epidemic.

The IRS now has 3,000 people working on this problem., and this year there are a number of new screening filters in place so the IRS can spot fraudulent returns before giving the thieves your money.

Watch this story during Live On Five on NewsChannel5 Thursday.

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