IRS warns tax return ID theft a 'growth industry'

The IRS tries very hard to send out tax refunds quickly, so it sometimes sends them to the wrong person. Criminals have figured this out, and increasingly try to jump between you and your tax refund. They do this by filing a tax return before you do. Your solution: File as early as possible. The IRS's solution? Throw 3,000 agents at the problem -- and stop sending hundreds of refund checks to the same address.

Tax refund identity theft is a big priority for the IRS, new commissioner John Koskinen told reporters this week when he was introduced. Good thing. A inspector general report last year found $4 billion in fraudulent returns were sent out last year. Some of the crimes seem like they should have been stopped easily. Some 655 tax refunds were sent to a single address in Lithuania, for example.

The IRS says tax refund ID theft is on the rise, noting that it recommended 218 cases for prosecution in 2011, but 1,257 last year. That might mean prosecution is up -- not the crime itself -- but we all know criminals are copycats, and so long as the tax refund scam works, it will attract more criminals.

At his news conference, Koskinen said the crime is still a "growth industry," but he was confident agents have it "under control," according to the Associated Press. I'd say the news is just another incentive to file early (but not often!).

For more on what the IRS is doing to combat ID theft, see the agency's release.