Identity theft victims are waiting almost 2 years for help from the IRS

Identity theft victims have to wait about 22 months on average to get resolution on their cases from the IRS, according to a recent blog from the National Taxpayer Advocate, an independent organization within the IRS charged with advising the agency on taxpayer issues. 

“Hundreds of thousands of taxpayers each year discover they are victims of tax-related identity theft when they electronically submit their federal income tax return and the IRS rejects their return, informing them that someone else already filed a return,” the blog states. 

After affected individuals file a tax return on paper and fill out required paperwork for identity theft, they hit those year-plus wait times, which went up by 119 days between September 2023 and April 2024, according to the blog. 

“These processing times are far outside the processing norms and are completely unacceptable,” the blog post notes, urging the IRS to get the number down to the agency target of 120 days or less. “The situation demands a more robust response from the IRS to rapidly decrease processing times and give tax-related identity theft victims the assistance and payment of the refunds they are awaiting.”

The problem stems from the IRS shuffling identity theft employees to answer the IRS’ general, toll-free phone lines in an effort to bring those wait times down, according to the Taxpayer Advocate. The IRS also had to temporarily shut down operations at the start of the pandemic.

The tax agency says that it’s working on it.

“The IRS is actively working to implement a range of improvements to provide faster service to victims of identity theft, including identifying, training and moving additional resources to work these important cases,” an IRS spokesperson told Nextgov/FCW via email, noting that “the backlog of identity theft cases remains one of the most significant ongoing service gaps.”

The agency has already tripled the closure rate of identity theft cases since 2020, they said. The taxpayer advocate blog also notes that there “appears” to be an increased number of closed cases despite the extended timelines. 

IRS Commissioner Danny Werfel spoke about the problem during a public address in March, noting that putting more IRS-related tasks online — a current goal of the agency — can free up IRS employees for more difficult problems.

“A fully digital IRS unlocks our potential to help victims speedily so that they’re not losing sleep anymore,” he said at the time.

The IRS is also planning to review the process to identify ways to improve victims’ overall experience and to bolster its prevention efforts against evolving, tax-related identity theft threats, the spokesperson said.

For now, “it takes way too long,” Werfel said. “We have to change that. We have to make it that if you are unfortunately a victim of identity theft, you can get fast resolution from the IRS.”

One of the biggest impacts for those left waiting is the associated delay of their refunds, which don’t get delivered until after the IRS resolves any identity theft issues, the taxpayer advocate says.

Nearly 70% of the taxpayers with identity theft cases had an adjusted gross income at or below 250% of the federal poverty line in fiscal 2023, the blog states, meaning the delay could cause economic harm for those who may need tax credits to pay living expenses.