04/18/2008 05:12 am ET Updated May 25, 2011

Two Types Of Tax Fraud On The Rise

Thieves are increasingly obtaining fraudulent tax refunds by using the identities of lawful taxpayers, according to a government watchdog report released Wednesday.

The report, an annual document from the Treasury inspector general for tax administration, also noted a rise in the theft of taxpayer identities by people seeking to work without paying federal taxes on their wages. The Internal Revenue Service rarely prosecutes such cases, the report said.

Taxpayers who fall victim to either scheme face an uphill battle in sorting things out with the I.R.S., the report said.

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