IRS theft investigations on the rise

The IRS started almost 1,500 identity theft investigations in fiscal 2013, the agency said Tuesday, in another sign of its beefed up efforts to battle tax cheats.

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The 1,492 criminal investigations – close to 500 more than in 2012, and more than five times the number began in 2011 – came after lawmakers and watchdogs have previously criticized the IRS’s efforts to battle identity theft.

In many identity theft cases, tax cheats steal a Social Security number to file a false claim. The IRS says that recommendations for prosecution, indictments and criminal sentences have also increased dramatically in recent years, with sentences as harsh as 26 years.

John Koskinen, the newly installed IRS commissioner, said identity theft will continue to be a top priority for the agency, but also stressed that more robust funding would help the IRS in the fight.

In cases highlighted by the IRS on Tuesday, identity thieves were ordered to pay restitution ranging from more than $800,000 to some $2.8 million.