ID Theft Brings 'Tsunami of Fraud' to IRS Phony returns are on the rise By John Johnson, Newser Staff Posted May 26, 2012 1:10 PM CDT 12 comments Comments Some people are discovering that when they file their returns with the IRS, an imposter already has beaten them to it. (Shutterstock) (Newser) – The New York Times today provides some eye-popping numbers on the relatively new crime of identity-theft tax fraud. The IRS stopped 700,000 fake returns in 2010, at least 1.3 million last year, and twice that many so far this year with only 30% of returns reviewed. But the agency also has missed its share, paying out billions in phony returns—and then paying out the legitimate returns later. The scheme is relatively easy to pull off: Criminals get their hands on someone's Social Security number, file an electronic return before the real person does, and receive the money in a hard-to-track debit card from a bank or tax software firm. "This is like a tsunami of fraud," says a federal attorney in Florida, which has been especially hard hit given its heavy concentration of seniors. The crime is so lucrative that it's causing some criminals who once relied on guns to put them away in place of laptops, according to the Times story. And not just seniors are vulnerable: At least two dozen police officers in Tampa fell victim, including one who specialized in identity theft.