The Internal Revenue Service is cracking down on fraudsters as tax return seasons begins. The agency has stepped up efforts to prevent identity theft, and caught 260,000 bad returns last year, up from 50,000 in 2010, and prevented a total of $1.4 billion in bad refunds being sent out, Reuters reports. New screening measures have been put in place and hundreds of check-cashing operations are being audited.
"ID theft is a growing problem all across the country, and we’ve come to find out that the tax system isn’t immune,” an IRS spokeswoman tells the Los Angeles Times. “They’ve figured out that just like they can steal credit card numbers, they can file false refunds." Some 105 people were arrested last week in a nationwide sweep by the IRS and Justice Department, including three JPMorgan Chase bankers who took kickbacks from a tax scam involving the stolen identities of Puerto Ricans, officials said. (Read more tax refunds stories.)