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Tax refunds scam costs IRS, taxpayers as much as $2B

The Form 1040, U.S. Individual Income Tax Return, is shown.

March 30, 2012 12:00:00 AM PDT
A tax scam involving stolen identities may have cost the Internal Revenue Service and U.S. taxpayers as much as $2 billion.

The criminals filed fake tax returns using Social Security numbers belonging to Puerto Rican citizens who don't pay federal income taxes. Because of that, they aren't likely to be on the radar of the IRS.

Prosecutors said that in some cases, U.S. mail carriers were paid to intercept refund checks. The scam has apparently been going on for years.