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Taxpayer Advocate: Identity Theft Victims Waiting Longer for Overdue Tax Refunds

S.J. Steinhardt
Published Date:
Jun 10, 2024


Victims of identity theft have had to wait longer for tax refunds as the IRS has shifted priorities, Accounting Today reported, citing a blog post by National Taxpayer Advocate Erin Collins.

The IRS is taking about 22 months, on average, to work on ID theft victim assistance cases Collins reported. In her 2023 Annual Report to Congress, she found the agency's processing time for resolving such cases as of the end of fiscal year 2023 was 556 days, or nearly 19 months. But more recently, as of April 2024, the processing time increased to 675 days.

Taxpayers must complete and submit a Form 14039, "Identity Theft Affidavit," to initiate a claim, but it may take many years for the case to be resolved.

Collins noted that the IRS initially caused the increased processing time on ID theft cases by temporarily shutting down operations during the beginning of the pandemic.

"For the past two filing seasons, the IRS has reallocated resources, including employees who work IDTVA [Identity Theft Victim Assistance] cases, to prioritize answering phone calls to meet Treasury's goal of the IRS achieving an 85 percent level of service on its general toll-free phone lines," she wrote. "Although the IRS has met the goal the past two filing seasons, it came at the expense of tax-related identity theft victims, compromising the taxpayer rights to quality service and to pay no more than the correct amount of tax. It is time for the IRS to bring the IDTVA processing time down to its target of 120 days or fewer."

In fiscal year 2023, about 69 percent of victims had an adjusted gross income at or below 250 percent of the federal poverty level, Collins noted, and taxpayers experienced economic burden in about 57 percent of the identity theft cases received by the Taxpayer Advocate Service (TAS).

Victims also aren't protected against further tax-related ID theft while the IRS works on their cases, Collins pointed out, as the service won't automatically issue them an Identity Protection (IP) personal identification number (PIN) until it resolves their case. However, taxpayers can opt into the IP PIN program by themselves at any time, including while the IRS is working their case.

"Victims of identity theft are already experiencing a tremendous amount of stress," wrote Collins. "The IRS's long processing times for resolving these issues not only increases the anxiety, but also the consequential refund delays can deprive families of the funds they need to meet their living expenses. These processing times are far outside the processing norms and are completely unacceptable. The IRS has had years to bring these processing times down, yet they have continued to rise. The lengthy time it takes the IRS to resolve an identity theft victim's issues can also cause additional problems in later tax years, further victimizing the taxpayer. Although the IRS has begun taking steps to reduce these processing times, improvements are happening too slowly; the IRS must prioritize its efforts, assist these victims, and timely pay out the refunds to which they are entitled."

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