Sometimes the problem isn't just a delayed refund, but worse: the IRS coming after victims for money.

Jay DeVan, a Rockville accountant, says he's been working since March to clear up a case for a client whose information was used two years ago by a thief in Georgia to collect a $1,352 refund.

When the client later filed a return showing he owed taxes, the IRS assumed it was an amended return, DeVan says. The agency also concluded he must repay the $1,352 refund.

DeVan suspects the IRS sent letters to the thief's address in Georgia, so the Maryland client was unaware of any problem until the next year.

The next tax season the IRS kept the client's small refund. And then the IRS notified him that it was going to collect the rest of the unpaid taxes by seizing funds from his bank account, DeVan says.

DeVan says the IRS has been slow to respond, often failing to get back to him in the time promised.

The accountant adds that his client wants to file his 2011 return, but worries that the IRS will keep that refund, too, to cover taxes he doesn't owe.

"It's a Catch-22," DeVans says.

In testimony before Congress this month, IRS Deputy Commissioner Steven Miller said identity theft is the agency's top priority, so it has devoted more resources to catch fraudulent returns.

Last year, for instance, the agency beefed up identity theft filters to detect false returns before refunds go out, he said. As of a month ago those filters had stopped 325,000 questionable returns claiming $1.75 billion.

The IRS now uses a code to identify taxpayers who have died so their numbers cannot be used by thieves, Miller said. It has issued more than 250,000 identity protection numbers to ID theft victims to signal that they are the legitimate taxpayers when they file returns. And it will be implementing measures to resolve cases faster.

But "the IRS cannot stop all identity theft," Miller added.

Unfortunately, taxpayers have few ways to protect themselves.

You can guard your Social Security number and other personal information like they're state secrets. If a business or group asks for your Social Security number, suggest that it use a different identifier instead.

And file your return early — before a thief gets a chance to do so. But this option won't be available to taxpayers who must wait to get certain forms before filing or who have complicated returns.

eileen.ambrose@baltsun.com

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