fraudulent refunds continue to be paid."
The new IRS Commissioner John Koskinen was in St Louis on Wednesday and addressed the issue, saying there has been "an explosion" in refund fraud and identity theft in the last three or four years.
"It kind of overwhelmed the IRS and state and local law enforcement in 2010, 2011. There have been a wide range of activities taken and we think we're making progress," said Commissioner Koskinen.
Koskinen said the IRS is implementing new filters to flag suspicious returns and look for multiple refunds to the same address.
He says the fraud department of the IRS, once made up of a few hundred employees, now has about 3,000 staffers working on fraud prevention and investigation. He said that's in happening even though budget cuts have lead to the IRS to trim down staff in other departments - leading to complaints about hold times when tax filers call the IRS with questions.
"This is a high enough priority. That's part of the reason we aren't answering more phone calls is because we thought we needed to get ahead of this particular problem."
The IRS is also testing a program in Washington D.C., Florida, and Georgia that involves issuing what it calls an Identify Protection PIN to tax payers. It already gives those PINS to victims of tax fraud.
The IRS is considering expanding the program and allowing anyone to opt in.
As for the Suttons, they've already filled out the forms necessary for the IRS to investigate their fraud case. The IRS told the couple it could take 180 days to complete the investigation and free up a tax refund.">