An eye-popping number—nearly 63,000—tax returns during the most recent tax season used Social Security numbers of somebody born before 1901. That’s a lot of people who claims to be over 113 years old, yet there are only about 40 known people worldwide who have achieved the age of 112 or older. We joke that medicine and drugs are keeping us alive at lot longer, but this is just fraud.

According to an audit by the Social Security inspector general, during tax years 2006-2011, 66,920 people filed such claims with these centenarians reporting $3.1 billion in wages, tips, and self-employment income.

Apparently, the problem is that there is no date of death on record for some 6.5 million Social Security numbers for people born before June 16, 1901. With no properly noted date of death in the agency’s system, other government agencies wouldn’t necessarily know an individual is deceased, though many forms contain date of birth and a high earner in her hundredth year might be expected to raise a flat somewhere?

The instances of fraud are incredible. Scammers opened bank accounts using the Social Security numbers of people in 1869 and 1893 making those folks as old as 146 and 122 years old. At that age would you walk out to the bank each day or just bank online? And one centenarian’s social security number appeared on 613 wage reports during the audited period. That’s a busy retirement!

CBNC reports:

The issue traces back to a larger discrepancy the audit found, that 6.5 million Social Security numbers for people born before June 16, 1901 do not have a date of death on record in the administration's "Numident" system. Without a date of death properly noted in the database, government agencies and other entities inquiring wouldn't necessarily know an individual was deceased.

"This missing death information could result in erroneous payments made by federal benefit-paying agencies that rely on the DMF [Death Master File] to detect inaccurate or unreported deaths," the audit noted. "The missing death information will also hinder private industry as well as State and local governments' ability to identify and prevent identity fraud."

… A spokesman for the Social Security Administration referred CNBC.com to the administration's response memorandum within the report, which said it prioritizes accuracy and integrity of its payment files. "The cases identified by OIG in this report are not cases where we are making improper payments," it said. "When we receive a report of death we take timely action to terminate payment."

It's true that most of those faux centenarians' wages weren't credited to their records for accruing Social Security and other benefits because the names on the earnings reports didn't match the number-holder's name. One Social Security number appeared on 613 different suspended wage reports during that six-year period.

Well at Social Security wasn’t paying benefits for people who used these numbers, but we can’t say the same for the IRS. Recently, we reported on the FBI’s investigation into breach that led to a wave in fraudulent state returns being filed using TurboTax software. And tax refund fraud is set to hit $21 billion in a few short years.

One lesson here is that federal agencies need to diligent in going after fraud. It’s possible that a few of the 113 year olds who filed tax returns are alive, but over 60,000? If that’s not a red flag, I’m not sure what would be.  Another lesson is that it is time to reform the tax code and simplify it so that something like this isn’t lost in voluminous paperwork.