IRS takes action as thieves target tax refunds

by: Scott MacFarlane Updated:

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NORTH CAROLINA - Identity thieves are targeting tax refunds and the cost of paying out those fake refunds is big -- $5 million in taxpayer money last year alone.

One man's daughter, Kaitlyn, a newborn, died four years ago this week from sudden infant death syndrome.

"We think about her every day and are never going to forget her," said Terry McClung.

McClung recently said soon after her death crooks stole Kaitlyn's Social Security number.

He warned Congress how quickly it happened and how long it took to fix.

"These people can do this and keep doing this year, after year, after year and still get away with it," said McClung.

A report just released by federal investigators is staggering 200,000 cases of ID thieves snatching tax returns in 2010 and 600,000 last year.

The problem simply exploding and government watchdogs said the IRS is too big to slow to stop it.

"If someone has trouble with a credit card their identity is stolen. It gets fixed very quickly and there is a higher level of service. That just isn't there at the IRS," said McClung.

If you get hit next year, you face a mountain of paperwork and a months-long delay in getting your refund.

Direct deposit banking and filing electronically make this scheme exponentially easier than in years past.

It makes it even easier than it was four years who when someone managed to steal a newborn's Social Security number and milk it for money.

IRS actions are being taken and 3,000 agents are deployed.