Up to 1,500 staff at the Department for Work and Pensions (DWP) had their identities stolen in a tax fraud.
Staff have had their identities stolen
Details of staff, including national insurance numbers, have been used to make fake tax credit claims.
The online tax credit application system has been suspended since last week because of the fraud.
BBC News reported in October that organised gangs have targeted the online tax credit system because they see it as an easy target.
The fact that staff identities had been stolen by tax credit fraudsters came to light when the online application system was shut down last week, but the full scale of the identity theft was unknown until now.
Benefit workers at the Milton Street office in Glasgow have borne the brunt of the fraud, with a reported 800 staff affected.
But a HM Revenue and Customs (HMRC) spokesman said this figure was "purely speculative."
"We take fraud very seriously and are investigating. The online tax credit system will remain suspended until we have concluded our investigation," he added.
Tax credit applications in person, by post or over the phone are still being accepted.
BBC News learned in October of widespread fraud by organised crime, with multiple online applications being made from internet cafes using false identities.
The fraudsters then disappear before repayment can be demanded - leaving honest claimants to suffer the cost of overpayment recoveries.
The problems with fraud in the tax credit system are thought to result from the system's design, described by some fraud experts as "low-hanging fruit" for scammers.
In the past, most checks into error or fraud have been applied after an application is made, in order to claw back overpayment after the fact.