IRS sets up cyber investigative team amid surge in tax fraud

The Internal Revenue Service (IRS) is creating a criminal investigative team to focus on cyber crime as fraudsters used stolen data to collect tax refunds.

The IRS is creating the new unit following an unprecedented surge in tax scams this year.

{mosads}Experts believe that a spate of health insurance and banking data breaches have given cyber criminals enough personal information on individuals to file fraudulent state and federal tax returns in their names.

Intuit, which makes the popular TurboTax filing software, alerted consumers about a surge of fraudulent filings in February.

The company denied that its own systems had been breached by hackers, suggesting instead that the fraud was related to personal data stolen in other corporate cyberattacks.

The rise in cyber crime is a challenge for the IRS, which has faced budget cuts in the last five years. Reports detailing the creation of the cyber unit said that identity-theft cases has jumped nearly fourfold since 2011.

Richard Weber, head of criminal investigation at the IRS, said individuals in Nigeria, Russia and other Easter European countries appear to be responsible for some cases of fraud.