In addition, the Treasury's Inspector General for Tax Administration reports found 10 bank accounts received 23,560 tax refunds totaling more than $16 million -- including: 2,706 tax refunds issued to a single account totaling $7.3 million.

The report was sent to the IRS on July 16, and released more than three weeks later.

Congressional lawmakers are demanding answers by the end of the month.

Rep. Charles Boustany, R-La., told IRS Commissioner Douglas H. Shulman in a letter that IRS employees "are discouraged from flagging potentially fraudulent ITIN applications."  

Boustany, chairman of a House Ways and Means Committee's oversight subcommittee, also suggested the IRS has a training problem - failing to prioritize fraud prevention.

The IRS issued a statement in response to the report that said in part the agency has recognized issues with the ITIN process and that top officials are have "moved quickly and aggressively to address issues that were identified."