MINNEAPOLIS (WCCO) — The Internal Revenue Service says nearly two million people were victims of tax-related identify theft last year.

More than 13,000 of those victims were Minnesotans. To deter criminals, Senator Amy Klobuchar has introduced legislation to increase penalties for people who use stolen identities.

She also wants to create a new office within the IRS to speed up resolving such cases.

“The big question is where did they get it from? That’s what bothers you the most,” Bob Zagarus said.

Last year, Bob Zagaras and his wife were notified that their identity had been stolen. WCCO’s Rachel Slavik tells us what happened when they got a letter from the IRS.

As co-owner of Bergstrom Jewelers, Bob Zagaras is very aware of security in his store. So when he got a letter at home from the IRS asking to verify his ID before getting a refund, it caught his attention.

“Problem was we did not file our income taxes at that point, so we knew something was up,” Zagaras said.

Indeed, Bob and his wife had gotten their identifications stolen.

“Had to go to website, fill out forms, said I didn’t file taxes so this is fraudulent,” he said.

After the IRS itself was hacked in 2015, the agency started a more rigorous authentication process before sending out refunds. But budget cuts, combined with increased fraud, is making it difficult for the agency to keep up.

“It’s happening really widespread,” Janet Weivoda said.

Janet Weivoda is a CPA and an enrolled agent with the IRS.

“IRS will never call you. IRS will never email you. The IRS will send a letter and if the issue is not dealt with, it will come by certified letter,” Weivoda said.

She advises clients to be careful with emails and phone calls. Most of them are scams, attempting to get your information.

And once scammers have it — you can no longer e-file. And you must get a code from the IRS to file every year.

“It is more work. You have to go through that whole process. You’re always going to have to prove who you are,” Weivoda said.

Bob says he feels protected because he pays about $20 a month for a service called ID Shield.

“If you think it’s not going to happen to you, you’re crazy. It can happen to you, it can happen to anybody,” Zagaras said.

The service Bob pays for is basically insurance against identity theft. If you have the time, there are things you can do yourself for free instead of paying a company.