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IRS Must Address Identity Theft Backlog to Restore Trust in Tax System

Writer's picture: Capitol TimesCapitol Times

A new report from National Taxpayer Advocate Erin Collins has revealed a troubling backlog at the IRS, with 500,000 identity theft cases piling up as of April. This growing crisis has left many taxpayers without refunds and others waiting years for their cases to be resolved. Such delays undermine the integrity of the tax system and erode public trust in the IRS.



The Taxpayer Advocate Service, an independent organization within the IRS, issues annual reports to Congress, offering insights and recommendations on improving the tax agency's operations. Collins' fiscal year 2025 report highlights a disturbing trend: the average resolution time for identity theft cases now exceeds 22 months. "Delays of nearly two years make a mockery of the right to quality service in the Taxpayer Bill of Rights," Collins stated. "The IRS must prioritize assistance for these victims and fix this problem quickly."


When identity theft occurs, victims must submit an identity theft affidavit and a paper return. The IRS then freezes the taxpayer’s actual return while investigating the case. As of 2023, these cases were taking about 19 months to resolve, with a backlog of approximately 484,000 cases. The situation has only worsened, partly due to an increase in identity theft cases. Collins also noted that the IRS has been reallocating workers from these cases to other tasks, such as answering phone calls during the filing season.


While the pandemic initially exacerbated these delays, it is no longer reasonable to attribute the high resolution times to COVID-19 challenges. "The onset of the pandemic was over four years ago. It is no longer reasonable to associate the pandemic challenges with high IDTVA case resolution times," Collins emphasized. The IRS must take accountability and implement effective measures to address this backlog swiftly.


The delays not only frustrate taxpayers but also revictimize those who have already suffered from identity theft. Imagine the distress of having your identity stolen, your refund delayed, and then waiting nearly two years for the IRS to resolve the issue. This bureaucratic sluggishness is unacceptable and highlights a critical need for reform within the IRS.


The IRS has reportedly taken steps to remedy the problem, including increasing the number of employees working on these cases. However, this action alone is insufficient. The agency must streamline its processes, leverage technology to expedite case resolutions, and ensure that adequate resources are allocated to identity theft cases year-round, not just during filing season.


Moreover, the IRS should enhance its communication with affected taxpayers, providing clear timelines and regular updates on their case status. This transparency will help rebuild trust and demonstrate a commitment to addressing taxpayers' concerns promptly and effectively.


The current situation is a stark reminder of the importance of robust cybersecurity measures and efficient governmental response systems. Identity theft is a severe issue that can have long-lasting financial and emotional impacts on victims. The IRS must do more to protect taxpayers and ensure that identity theft cases are handled with the urgency and seriousness they deserve.


The IRS's growing backlog of identity theft cases is a significant concern that demands immediate attention. Delays of nearly two years for case resolutions are unacceptable and undermine public trust in the tax system. The IRS must prioritize resolving these cases, improve its processes, and ensure that victims of identity theft receive the timely assistance they need. Only then can the agency restore faith in its ability to serve and protect the American taxpayer.

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