How to Identify A Fraudulent Tax Return

So I recently posted about myths associated with CPAs, the last of which I “mythbusted” by showing just how funny we accountants are.  When I wrote that, I was only considering intentional comedy by CPAs, but after a late night reading of the Journal of Accountancy last night (yes, this is how I unwind), it seems CPAs aren’t the only one with jokes. Yesterday’s news posted by the JoA included an article “IRS Chief Counsel’s Office Issues Guidance on Identity Theft Returns” that I had to double check at multiple points to make sure I hadn’t actually flipped over to The Onion.
I’m still not sure this wasn’t a parody posting.  Can somebody please confirm this for me??

Here is the first gem from our friends at the IRS. You may have been confused on what makes for a fraudulent tax return before, but they set the record straight yesterday:

“a return filed by an identity thief is not a valid return because it is not filed by the true taxpayer or with the true taxpayer’s consent and it lacks a valid signature. This is a position the Office of Chief Counsel has taken in prior guidance.

I especially love the last line referring to “prior guidance.” My one comment/question on this is what other position could could they possibly have taken under this scenario?!

The article becomes even more strange when it all but says some types of fraud are ok. I’m going to paraphrase what the official guidance says but you can check the article for yourself.  The quick summary of The IRS did not address situations where the name and/or SSN were fake/stolen but the return was otherwise correct. In these situations, the return WITH SOMEONE ELSE’S IDENTITY is an attempt to comply with federal tax law…so the fraud is ok…

To be fair, it does mention that this is often the case with undocumented workers, but I’m fairly sure that stealing identities is not part of the tax code. It seems like a dangerous game to pick and choose when fraud is acceptable.We really need to come up with a better process for undocumented workers to comply with tax law.  Any ideas on how to handle this? Is there anyway a different ID number could be used?