What's worse than filing your taxes? Having an identity thief steal your return check.
Identity theft is already a serious problem—the No. 1 complaint to the Federal Trade Commission, and tax-related identity theft is a growing part of this crime spree. In 2010, about 15 percent of all identity theft complaints to the FTC dealt with tax returns. In 2013, that jumped to 43 percent.
"It's a lucrative crime and relatively easy to commit," said Adam Levin, chairman and founder of Identity Theft 911. "All you need is a Social Security number and some counterfeit documents. It's much easier than selling drugs or stealing cars and a lot less risky for the bad guys."
One way to prevent this from happening is to file early. Why? The IRS may be able to process your return before the identity thieves can.
"It really can be a race to the IRS," said Steve Toporoff, coordinator of the Identity Protection Program at the FTC. "They usually don't have access to W-2 forms, so they just make up income numbers and hope their phony return gets through the process," Toporoff explained.
If the crook is successful, your legitimate return will be kicked out and the refund denied because the IRS computers will show that you were already paid.
(Read more: Court halts robocalls aimed at senior citizens)
You will get your money—eventually, but it could be delayed for months. The IRS says a typical case can take about 180 days to resolve.
The government fights back
Identity theft is a top priority for the IRS. On its website, the agency says it's taking "new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud."
The IRS has more than 3,000 employees working on identity theft issues. More than 35,000 employees who deal with taxpayers have been trained to recognize return fraud and to help the victim when it happens.
(Read more: 4 tips for avoiding holiday-related identity theft)
The agency's criminal investigation unit has focused on finding and prosecuting the thieves who commit return fraud. In fiscal year 2013:
- The IRS started 1,492 criminal investigations related to identity theft, up 66 percent from the previous year.
- Indictments and sentencing doubled—the average prison term was more than three years.
"We applaud the IRS for taking steps to deal with this problem," said Eva Velasquez, president and CEO of the Identity Theft Resource Center, a nonprofit organization that helps victims of ID theft. "They have thwarted billions of dollars in fraud, but there are still billions of dollars being stolen and more needs to be done."