Everyone knows that identity theft is a big problem in the United States.  In recent testimony before Congress the subject of stolen identity refunds was front and center.

The IRS estimates that more than 641,690 incidents of tax-related identity thefts have occurred through September of 2012.  This is an exponential increase from 2008 which only saw 47,730 incidents.

ID theft with the IRS can be particularly troublesome and it typically carries on year after year.

The IRS says that Stolen Identity Refund Fraud involves “fraudulent claims for refund in the name of a person whose personal identification information appears to have been stolen or unlawfully used.”

A video from the IRS Taxpayer Advocate Service’s Nina Olsen describes the problem and what you can do:

http://youtu.be/SZo8SR-7tvo

The government has announced in several ways that it intends to combat this abuse.  For instance, the Department of Justice  issued a directive which hopes to facilitate the prosecution of the identity thieves.

Here are some steps you can take to help remedy the problem:

1. Report the Theft to the FTC

2. File a report with local law enforcement – keep a copy of the report

3. Notify 3 major credit bureaus

5. Report the problem to the Social Security Administration

6. Contact the IRS’ Identity Protection Specialized Unit at 1-800-908-4490

7. Get help from the IRS’ Taxpayer Advocate.

In short, you must be proactive to stop the abuse.  The earlier you get to work on the problem, the faster you arrive at a solution.