Agency Priority
The inspector general's report said the IRS has taken several steps to address tax-related identity theft fraud. The issue has become an agency priority, the report said, and the IRS has improved in identifying fraud patterns.
The identity theft fraud has been concentrated in Florida, said the report, which found more than $468 million in potential fraud in Tampa and $280 million in Miami.
The report recommended that the IRS should use existing federal databases to flag potential fraud. It said Congress would have to grant the agency authority for this.
The report said the IRS should limit the number of tax refunds that can be sent to a single bank account and deposit refunds only to bank accounts and debit cards in the taxpayer's name.
"Online tax cheats are swindling billions from law-abiding Americans," said Senator Bill Nelson, a Florida Democrat who requested the report, in a statement. "It's an ongoing problem, and we've got to find a fix."