IRS Taxpayer Advocate office head Nina Olson told Congress this year that identity theft has become a leading concern for taxpayers. There were 20,782 identity theft complaints involving tax returns in 2007, USA Today reported.

"People create a phony business, phony children, phony working hours and other details to get a very nice refund," says Eduardo Leiseca, a Miami tax agent.

It is reported that some thieves steal identities to cover up criminal pasts or their status as illegal immigrants in order to help them seek employment.

"We've taken steps to ensure that our workforce … understands that when they're dealing with a victim, it's imperative that they provide the assistance that that victim needs, on the first call, and not 10 calls later," said Linda Stiff, IRS services and enforcement deputy commissioner.