If you are a victim of tax identity theft, there is more bad news. In its most recent annual report to Congress, the Taxpayer Advocacy Service outlines troublesome trends it sees in the processing and administration of tax returns and taxpayer support. By law, the National Taxpayer Advocate’s report must identify the ten most serious problems taxpayers face with the IRS. They, then, have to make administrative and legislative recommendations to address them. Identity theft is one of the most critical IRS issues in their recent report.

IRS delays in resolving identity theft cases

Per the report, “For cases closed by the IRS’s Identity Theft Victim Assistance (IDTVA) unit in Fiscal Year 2024, the average time it took the IRS to resolve identity theft cases and issue refunds to the affected victims was almost two years.”

Talk about frustrating! It currently takes up to two years to correct a victim’s tax records and receive a refund after the ID thief has already made you a victim.

What taxpayers can do in the meantime

While the Taxpayer Advocacy Service recommends changes, it will take some time to implement by the IRS. So, what do you do in the meantime? Here are some tips:

1. File early. If you have any reason to believe your identity is compromised, file your tax return as early as possible. For example, you may be at risk if you receive notices during the year from any businesses that their records may be compromised, exposing some of your personal information.
2. Check your credit reports. Remember, each year, the three major credit agencies must provide copies of your credit report free of charge. The beginning of the year is a great time to check. If you see anything fishy, file your tax return immediately. You can order the reports at AnnualCreditReport.com.
3. Consider the IRS Identity Protection PIN program. If you are worried about IRS identity theft, sign up for a unique ID or PIN to file your federal tax return. While it can be a hassle, it will help prevent anyone else from filing using your identification.

There is still hope that the Taxpayer Advocacy report will motivate the IRS or Congress to take action to help victims receive a more timely resolution to their problems. Contact our RRBB advisors if you have any questions or need assistance.