Based on your description, you are using one of the circuits posted at this link:http://www.ikalogic.com/ir_prox_sensors.php
Which one are you using? The low range or high range one? You are going to want to use the high range one, if you aren't already. If you are using this circuit, are you using the same values of components (outside of the op-amp; which based on the spec sheets I found, seem to be identical, just one has 4 op-amps in the package, whereas the other has only 2)? If not, can you post a schematic of what you are using with the values filled in?
Finally, can you post the schematic showing how you connected the system to the Arduino, as well as you code?