The Internal Revenue Service doesnt know precisely how many identity thieves are filing fake tax

returns. Nevertheless, the agency risks issuing roughly $26 bill ion dollars in fraudulent tax refunds. The IRS received 2.2 million fake taxation assessments in 2011 and found that 94 0,000 of the returns, with $6.5 billion dollars in associated fraudulent deducti ons, were connected to identity fraud, according to J. Russell George, head of t he Treasury Inspector General for Tax Administration (TIGTA). George told judici ary that the IRS cannot conclusively say how many identity thieves are filing fr audulent returns on a yearly basis. An analysis by TIGTA revealed that the IRS is failing to detect other instances of fraud-related ID theft. The watchdog found about 1.5 million additional undet ected tax returns that are potentially fake, with refunds surpassing $5.2 billio n dollars. This means that the IRS could be doling out $26 billion dollars of ta xpayer money to thieves. George expressed his concerns today before subcommittees of the House Ways and M eans Committee that maintains oversight of the IRS and Social Security. The IRS announced plans this year to crack down on suspected identity theft as p art of broader attempts to prevent tax fraud. The agency also claims to be stepp ing up internal reviews to identify fake tax statements before issuing refunds, according to George. New screening procedures flag possibly fraudulent returns f or closer perusal, and once a taxpayers identity has been confirmed, the tax retu rn is processed and a refund is given. If a taxpayers identity cant be confirmed, the IRS is claiming to suspend issuing any repayments. On account of its new program, the IRS asserted it had stopped $1.3 billion in p otentially fake returns as of mid-April, George asserted. The findings to be shared with Congress on today are part of a new TIGTA report on customer service at the IRS. In its report, the watchdog faults the IRS for f ailing to quickly help ID theft victims who regularly wait more than a year for their cases to be solved. According to TIGTA, an individual who tries to electronically file a tax return in February might discover that an ID thief has filed a return in their name and already received their refund. Over the course of several months, TIGTA said it is common for the taxpayer to try and contact the IRS many times. Once an agenc y official acknowledges the crime and starts an inquiry, it may take up to a yea r for the taxpayers case to be settled. This is just plain wrong, Representative Sam Johnson said at Tuesdays hearing. A lot of the delay is due to budget cuts, according to Representative Xavier Bec erra, who said at Tuesdays hearing the IRS budget this year is $305 million less than what it had in 2011. The cuts mean there are five thousand fewer workers pr ocessing returns and helping taxpayers. I think we want to figure out a way to do better in times to come but there is no easy answer now on the horizon, Becerra said.