> Fraudulent tax refunds are a huge issues that the IRS has not kept up with. The IRS itself estimates it paid $5.2 billion to identity theives[1]. Protecting taxpayers without creating too much of a hurdle to tax paying is a very hard problem to solve.
Eliminate advance tax withholding and pay all taxes in arrears with allowance for a no-penalty payment plan for up to one year after the end of the tax year. You have significant one-time cost from shifting obligations forward, and a bit of an ongoing cost from the time value of money, but you eliminate the problem of fraudulent refunds by simply eliminating routine refunds.
Eliminate advance tax withholding and pay all taxes in arrears with allowance for a no-penalty payment plan for up to one year after the end of the tax year. You have significant one-time cost from shifting obligations forward, and a bit of an ongoing cost from the time value of money, but you eliminate the problem of fraudulent refunds by simply eliminating routine refunds.